United States District Court, W.D. Missouri, Western Division
STEVE WILDMAN and JON BORCHERDING, Individually and as representatives of a class of similarly situated persons, and ON BEHALF OF THE AMERICAN CENTURY RETIREMENT PLAN, Plaintiffs,
AMERICAN CENTURY SERVICES, LLC, et al., Defendants.
ORDER GRANTING PLAINTIFFS' MOTION FOR CLASS
KAYS, CHIEF JUDGE.
putative class action involves claims for breach of fiduciary
duty brought pursuant to the Employee Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C. §
1001, et seq. Plaintiffs Steve Wildman
(“Wildman”) and Jon Borcherding
(“Borcherding”) bring this suit on their own
behalf and on the behalf of a proposed class claiming
Defendants breached their fiduciary duties and engaged in
before the Court are Plaintiffs' Motion for Class
Certification (Doc. 62), Defendants' Motion to Strike
Plaintiffs' Reply (Doc. 79),  Plaintiffs' Notices of
Supplemental Authority (Docs. 88, 105, 109, 111, 115, 152)
and Defendants' Responses to Plaintiffs' Notice of
Supplemental Authority (Docs. 90, 107, 110, 112, 116). For
the following reasons, Plaintiffs' motion for class
certification is GRANTED. Defendants' motion to strike
Plaintiffs' reply brief is DENIED.
American Century Companies, Inc. (“American
Century”) makes the American Century Retirement Plan
(the “Plan”) available to its eligible employees
and the employees of its affiliates. The Plan is a defined
contribution 401(k) plan that allows participants to contribute
a percentage of their pre-tax earnings and invest those
contributions among different investment options.
Wildman and Borcherding are former American Century
employees. Wildman has participated in the Plan from 2005 to
the present day. Borcherding participated in the Plan from
1996 until 2012. Plaintiffs assert approximately 2, 000 to 2,
500 people participated in the Plan from June 30, 2010, to
the present day.
American Century Retirement Plan Retirement Committee (the
“Committee”) is responsible for selecting,
retaining, and reviewing the investment options in the Plan
and overseeing the Plan's investment and administrative
expenses. Until 2016, the investment options were generally
limited to American Century mutual funds, American Century
collective investment trusts, and shares of American Century
common stock. The Plan also offers a self-directed brokerage
account that allows participants to invest in stocks, bonds,
and mutual funds not affiliated with American Century.
filed this ERISA lawsuit on June 30, 2016. In their Amended
Complaint, Plaintiffs assert five counts pursuant to 29
U.S.C. § 1132(a)(2) and (3) on behalf of the Plan. Count
I asserts Defendants breached their duties of loyalty and
prudence in violation of 29 U.S.C. § 1104(a)(1)(A)-(B).
Count II alleges Defendants failed to monitor the Committee
and Committee members. Counts III and IV allege Defendants
engaged in prohibited transactions in violation of 29 U.S.C.
§ 1106(a)(1) and (b). Count V is a claim for other
equitable relief based on ill-gotten proceeds recoverable
under 29 U.S.C. § 1132(a)(3).
allege Defendants breached their fiduciary duties to the
Plan, causing the Plan to suffer losses. Specifically,
Plaintiffs believe Defendants selected and retained
proprietary funds, despite their high cost and poor
performance, in order to further the self-interest of
American Century. Plaintiffs also allege Defendants acted
disloyally by not capturing revenue-sharing payments and by
failing to promptly convert certain funds' shares to a
lower-cost share class. In addition, Plaintiffs contend
Defendants caused the Plan to pay unreasonable record-keeping
fees because they failed to negotiate the existing contract
or put the service up for competitive bidding.
propose defining the class as,
All participants and beneficiaries of the American Century
Retirement Plan at the time on or after June 30, 2010,
excluding Defendants, employees with responsibility for the
Plan's investment or administrative functions, and
members of the American Century Services, LLC Board of
Mot at 8 (Doc. 65).
February 27, 2017, the Court granted in part, Defendants'
Motion for Summary Judgment because Wildman and
Borcherding's claims were partially barred by a release
they signed when they were laid off from American Century.
The Court found the release of claims was valid as to
Borcherding's claims that arose on or before July 19,
2012, but not Wildman's.
rule of Civil Procedure 23 governs class certification. A
party seeking class certification must satisfy all of the
requirements of Rule 23(a) and at least one of the
requirements of Rule 23(b). Id. The requirements
under Rule 23(a) are satisfied when “(1) the class is
so numerous that joinder of all members is impracticable; (2)
there are questions of law or fact common to the class; (3)
the claims or defenses of the representative parties are
typical of the claims or defenses of the class; and (4) the
representative parties will fairly and adequately protect the
interests of the class.” Fed.R.Civ.P. 23(a). These
requirements are typically summarized as numerosity,
commonality, typicality, and adequacy. In re Constar
Int'l Inc. Sec. Litig., 585 F.3d 774, 780 (3d Cir.
pursue certification under Rule 23(b)(1). Under this rule,
a party seeking class certification must satisfy the court
that “prosecuting separate actions by or against
individual class members would create a risk of”
(A) inconsistent or varying adjudications with respect to
individual class members that would establish incompatible
standards of conduct for the party opposing the class; or
(B) adjudications with respect to individual class members
that, as a practical matter, would be dispositive of the
interest of the other members not parties to the individual
adjudications or would substantially impair or impede their
ability to protect their interests.
Civ. P. 23(b)(1).
Court has broad discretion to determine whether class
certification is appropriate. Shapiro, 626 F.2d at
71. The court must engage in “a rigorous
analysis” to ensure the requirements of Rule 23 are
met. Wal-Mart Store, Inc. v. Dukes, 564 U.S. 338,
351 (2011). Plaintiffs bear the burden of demonstrating that
the proposed class meets Rule 23 requirements. See
Coleman v. Watt, 40 F.3d 255, 258 (8th Cir. 1994).
considering whether class certification is appropriate, the
Court does not address the merits of the parties' claims
and defenses, but does probe behind the pleadings and look to
what the parties must prove. Gen. Tel. Co. v.
Falcon, 457 U.S. 147, 160-61 (1982); Elizabeth M. v.
Montenez, 458 F.3d 779, 786 (8th Cir. 2006). “In
conducting this preliminary inquiry, however, the court must
look only so far as to determine whether, given the factual
setting of the case, if the plaintiff's general
allegations are ...