On May 29, 2013, the parties in Abbott v. Lockheed Martin Corporation had their oral argument before the 7th Circuit Court of Appeals. As a refresher, this case is on an interlocutory Rule 23(f) appeal after the district court partially granted class certification and partially denied it. This means that its an appeal in the middle of the case, rather than at the end of the case, specifically geared toward appealing decisions granting or denying class certification. If you are interested in reading (or re-reading) the district court’s order being appealed, it is available here. Previously, the district court had granted class certification a first time, but that was vacated by the 7th Circuit in light of their opinion in Spano v. Boeing. So this is the second time this case has been appealed under Rule 23(f) to the 7th Circuit.
For those interested in listening, here is a link to the 7th Circuit’s website which has audio of the oral arguments. Caution: it is about 30 minutes long but for those who are interested in this topic, it’s one of the more interesting oral arguments I have listened to or attended.
I will state this very important warning from reading too much into what was actually said at oral argument. Oral arguments are not always what they seem. Nothing is final until a written opinion is published and the mandate has issued. Judges tend to hold their cards very tightly. That being said, however, my very mini-summary is that Circuit Judge Wood, who previously wrote the opinion in Spano, as well as both opinions in Hecker v. Deere, seemed to demonstrate more sympathy towards the arguments of the plaintiffs than of the defendants. Of the many issues discussed, two seem most important to me for this case and others. First, Judge Wood seemed comfortable with the idea that an imprudent management claim for just one investment fund is the type of case that could arguably move forward as a class action because if each participant in a plan had to bring individual claims, the possibility of differing results would be a problem. Second, Judge Wood suggested that including a benchmark to compare the investment fund against so that a class could be defined seemed reasonable because granting class certification is entirely a tentative ruling under the class action rules. Said another way, the judge can always change his or her order after a merits trial. Importantly, the district court rejected plaintiffs’ proposed class definition for their claim alleging the plan’s stable value fund was imprudently managed as compared to the returns of the Hueler FirstSource Index, because they hadn’t yet proved that the Hueler FirstSource Index was a prudent alternative. Judge Wood seemed to suggest that having to determine the actual prudent benchmark at the class certification stage was putting too much of the merits-cart before the class certification-horse. (my joke, not hers)
My ultimate conclusion, however, is that I am not going to read any tea leaves and will instead wait for the published opinion. Of course, you will get it here first, so stay tuned.
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