The opinion of the court was delivered by: Judge Algenon L. Marbley
This matter comes before the Court on the Motion for Class Certification by Plaintiff, Kermit D. Bridges ("Bridges" or "Plaintiff").*fn1 Pursuant to Rule 23 of the Federal Rules of Civil Procedure, Plaintiff seeks to certify a class defined as: the Plan, and all Participants in the Plan for who individual accounts the Plan purchased and/or held shares of the AEP Stock Fund at any time from December 9, 1998 to December 31, 2002, inclusive (the "Class")
Plaintiff also seeks an order certifying him as the Class Representative and an order designating both Schatz & Nobel, P.C., and Stull, Stull & Brody, as Class Counsel. For the reasons set forth herein, Plaintiff's Motion is DENIED.
This is an action filed under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132, et. seq. Bridges brings suit on behalf of all other persons similarly situated (the "Participants"), who participated in the American Electric Power System Retirement Savings Plan (together with its predecessors,*fn2 the "Plan"). Plaintiff seeks Plan-wide relief on behalf of the Plan, and on behalf of a class of all Participants in the Plan for whose individual accounts the Plan purchased and/or held shares of the AEP Stock Fund ("Fund") from December 9, 1998 to the present (the "Class").*fn3
The Plan is a "defined contribution" or "individual account" Plan ("EIAP") within the meaning of ERISA § 3(34), 29 U.S.C. § 1102(34), in that it provides for individual accounts for each Participant and for benefits based on the amount contributed to each Participant's account. Complaint ¶ 22. The Plan is also a "401(k)" voluntary contribution plan, whereby each Participant directs the Plan: (1) to purchase investments from among the various investment options offered by the Plan; and (2) to allocate those investments to his or her individual account. Complaint ¶ 23. During the Class Period, the Plan provided several investment options to Participants, including the Fund. Id. ¶ 24. The Plan also provides that AEP will make matching contributions in an amount equal to 6% of each Participant's regular compensation. Id. AEP's matching contributions were invested solely in the Fund until March 1, 2002, at which point the company allocated them according to each Participant's individual investment choices. Id. ¶ 25.
Defendants are: (1) AEP, a corporation headquartered in Columbus, Ohio; (2) AEPSC, a wholly-owned subsidiary of AEP, also headquartered in Columbus, Ohio, and the alleged sponsor and named fiduciary of the Plan; and (3) Draper and Shockley (together, the "Director Defendants"), two directors of AEP, who allegedly also serve as the principal officers and directors of AEPSC (collectively, with AEP and AEPSC, the "Defendants"). Plaintiffs bring this action pursuant to § 502(a)(2) of ERISA, 29 U.S.C. § 1132(a)(2).*fn4
Generally, Plaintiff alleges that Defendants breached their fiduciary duties to the Plan and the Participants, as set forth in ERISA § 404, 29 U.S.C. § 1104, and the Department of Labor ("DOL") Regulations, 29 C.F.R. § 2550. Specifically, Plaintiff makes two independent claims:
1) Defendants breached their fiduciary duties by offering the Fund as one of the investment options of the Plan and permitting the Plan to purchase and hold shares in the Fund when it was imprudent to do so; and
2) Defendants breached their fiduciary duties by negligently making misrepresentations and negligently failing to disclose material information that was necessary for the Participants to make informed decisions concerning Plan assets and the appropriateness of investing in the Fund.
Plaintiff claims that as a result of these breaches, Participants have suffered substantial losses; namely, the Fund lost a substantial portion of its value since the beginning of the Class Period, and the Plan, and by extension, the Participants were deprived of the value of prudent investment alternatives. As a result, Plaintiff requests the following: (1) actual damages "in the amount of any losses the Plan suffered to be allocated among the Participants' individual accounts in proportion to the accounts' losses"; (2) equitable relief; (3) costs pursuant to 29 U.S.C. § 1132(g); (4) attorneys fees pursuant to 29 U.S.C. § 1132(g) and the common fund doctrine; and (5) "[s]uch other relief as the Court may deem equitable and just." See Complaint at 31-32 ("Prayer for Relief").
Bridges is a resident of the State of West Virginia who worked for AEP for over thirty years before retiring in 1992. Complaint ¶ 8. Bridges was a Participant in the Plan within the meaning of ERISA § 3(7), 20 U.S.C. § 1002(7) throughout the period of his employment. Bridges Dep. at 12. In 2002, Bridges read about a possible class action suit involving Plan holders, and, shortly thereafter, he contacted proposed Class Counsel, Stull, Stull & Brody. Id. at 74:21-75:1. Bridges was listed as a named plaintiff in the Complaint, which was filed in 2003. Complaint ¶ 8. In 2004, Bridges fully divested himself of his Plan holdings. Id. at 54:18-55:7.
Three different ERISA actions were filed in this Court and the Southern District of New York, beginning in December of 2002. On December 29, 2002, the New York case was transferred to this Court, and on July 8, 2003, this Court issued an Order consolidating the cases and appointing lead plaintiff and lead counsel. Plaintiff then filed the Consolidated Amended Complaint on July 23, 2003, and the Amended Complaint on September 8, 2003 (collectively the "Complaint"). Defendants filed their Motion to Dismiss on November 10, 2003, to which Plaintiff responded.
In their Opposition, Defendants argued that Plaintiff had to, but failed to, comply with Rule 23.1 of the Federal Rules of Civil Procedure. This prompted Plaintiff to file a Motion to Strike, or in the alternative, for Leave to File a Response to Defendants' new argument. By Order of April 15, 2004, the Court granted Plaintiff leave and accepted the response attached to Plaintiff's Motion to Strike. On August 10, 2004, this Court denied Defendants' Motion to Dismiss in its entirety. Further, on March 10, 2005, this Court denied Defendants' Motion to Modify the Court's August 10, 2004 Order to Certify under 28 U.S.C. § 1292(b) for Interlocutory Appeal. On October 31, 2005, Plaintiff filed the motion currently at issue. The matter has been fully briefed, and the Court held a class certification hearing on June 27, 2006.
A. Standing as a Jurisdictional ...