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Krikorian v. Great-West Life & Annuity Insurance Co.

United States District Court, D. Colorado

September 13, 2018

WAHAN KRIKORIAN, On Behalf of the TPS Parking Management, LLC 401k Plan and On Behalf of All Other Similarly Situated Employee Benefit Plans, Plaintiff,
v.
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY, GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK, GREAT-WEST TRUST COMPANY, LLC, and ADVISED ASSETS GROUP, LLC, collectively d/b/a EMPOWER RETIREMENT, Defendants.

          ORDER CONCERNING MOTION TO STRIKE & MOTION FOR CLASS CERTIFICATION

          ROBERT E. BLACKBURN UNITED STATES DISTRICT JUDGE

         This matter is before me on the following: (1');">1) Defendants' Motion To Strike Expanded Class Definition Contained in Plaintiff's Renewed Motion for Class Certification [#1');">166][1');">1" name="FN1');">1" id= "FN1');">1">1');">1] filed December 8, 201');">17; and (2) the Plaintiff's [Corrected] Renewed Motion for Class Certification and Supporting Memorandum of Law [#1');">170-1');">1] filed December 21');">1, 201');">17. Concomitant responses [1');">159 & #1');">172] and replies [#1');">171');">1 & #1');">179] were filed. I grant the motion to strike in part and deny the motion for class certification.

         I. MOTION TO STRIKE

         The defendants, Great-West Life & Annuity Insurance Company and related entities, provide administration and other services to 401');">1(k) retirement plans. Like the parties, I refer to the defendants collectively as Empower Retirement. The plaintiff, Wahan Krikorian, is a participant in a 401');">1(k) retirement plan, the TPS Parking Management, LLC 401');">1(k) Plan (TPS Plan). Empower Retirement provides services to the TPS Plan. Empower Retirement charges the TPS Plan for the services provided by Empower Retirement.

         Mr. Krikorian alleges that the TPS Plan and Empower Retirement, in its relationship with the TPS Plan, are controlled by the Employee Retirement Income and Security Act (ERISA). 29 U.S.C. §§ 1');">1001');">1 - 1');">1461');">1. He alleges that Empower Retirement acts as an ERISA fiduciary in relationship to the TPS Plan. Empower Retirement invests contributions made to the TPS Plan in various mutual funds. Often, Empower Retirement receives revenue sharing payments (RSPs) from mutual funds into which Empower Retirement invests retirement contributions. An ERISA fiduciary may not accept RSPs unless (1');">1) the service provider offsets any revenue sharing payment received by the service provider, on a dollar-for-dollar basis, against the fees owed by the plan to the service provider; and (2) the decision to invest in revenue sharing mutual funds is made by a plan fiduciary or participant other than the service provider which receives the revenue sharing fee. Mr. Krikorian alleges that Empower Retirement does not consistently offset revenue sharing payments it receives, on a dollar-for-dollar basis, against fees owed to Empower Retirement by the TPS Plan. He seeks, inter alia, an injunction prohibiting Empower Retirement from retaining improperly RSPs, restitution of all RSPs retained improperly by Empower Retirement, and compensatory damages. Complaint [#1');">1], ¶ 1');">12.

         In his complaint [#1');">1], Mr. Krikorian details and defines the term “Group Contracts.” Complaint [#1');">1], ¶¶ 1');">18, 32-35, 39, 41');">1, 46, 48, 56, 58-60, 62, 69, 72. According to the complaint, Group Contracts define the relationship between the TPS Plan and Empower Retirement. The Group Contracts give Empower Retirement the authority to manage the assets of the TPS Plan, Mr. Krikorian alleges. Complaint [#1');">1], ¶¶ 32-35. This Group Contract authority, Mr. Krikorian alleges, is used by Empower Retirement to generate RSPs. Complaint, ¶¶ 52-53. According to Mr. Krikorian, Empower Retirement routinely and improperly retains some of these RSPs.

         In his complaint, Mr. Krikorian proposes to pursue his claims against Empower Retirement on behalf of the TPS Plan and on behalf of a Fed.R.Civ.P. Rule 23 class defined as

All employee pension benefit plans covered by the Employee Retirement Income Security Act of 1');">1974 subject to Internal Revenue Code §§ 401');">1(a) or 401');">1(k) with which Empower Retirement has maintained a contractual relationship based on a group annuity contract or a group funding agreement.

Complaint [#1');">1], ¶ 93. This class is limited to plaintiff plans working with Empower Retirement under Group Contracts.

         In his first motion for class certification [#35] and in his present motion for class certification [#1');">170-1');">1], Mr. Krikorian proposes a different class definition:

All employee pension benefit plans covered by the Employee Retirement Income Security Act of 1');">1974 subject to Internal Revenue Code §§ 401');">1(a) or 401');">1(k) in [Empower Retirement's] Core Market (i.e., plans with $50 million or less in assets).

Motion for class certification [#1');">170-1');">1], p. 4. The parties agree that this class definition includes pension benefit plans that have a relationship with Empower Retirement based on a Group Contract structure, as described in the complaint, and plans that work with Empower Retirement under a different contractual structure, a net asset value (NAV) structure.

         Empower Retirement objects to this amended class definition because the definition includes pension benefit plans that work with Empower Retirement under a NAV structure. As Empower Retirement notes, none of the allegations in the complaint describes pension benefit plans that work with Empower Retirement under a NAV contract structure, as opposed to a Group Contract structure. Empower Retirement contends the plaintiff, by seeking to expand the scop of the class definition, is seeking to amend the nature of his claims and the scope of the proposed plaintiff class without amending his complaint. If the plaintiff is permitted to amend the class definition to cover plans operating under a NAV structure, Empower Retirement asserts, then the basis for the claims of the plaintiff and the scope of the proposed class will be expanded beyond the plaintiffs described in the complaint and the claims alleged in the complaint.

         Empower Retirement says it has proceeded through discovery and other aspects of this case with a focus on plans with Group Contracts. As a result, Empower Retirement says it will be prejudiced if the nature of the plans included in the proposed plaintiff class is expanded to include plans operating under a NAV structure. Empower Retirement says the class definition in the complaint includes about 1');">10, 000 ...


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