Monteiro v. The Children's Hospital Corporation

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

)

ADILSON MONTEIRO, KAREN GINSBURG, )

JASON LUTAN, and BRIAN MINSK, individually )

and as representatives of a class of similarly )

situated persons, on behalf of the Children’s )

Hospital Corporation Tax-Deferred Annuity Plan, )

)

Plaintiffs, )

)

v. ) No. 1:22-cv-10069-JEK

)

THE CHILDREN’S HOSPITAL CORPORATION, )

THE BOARD OF DIRECTORS OF THE )

CHILDREN’S HOSPITAL CORPORATION, )

THE CHILDREN’S HOSPITAL CORPORATION )

RETIREMENT COMMITTEE, and )

DOES NO. 1-20, )

)

Defendants. )

)

MEMORANDUM AND ORDER ON PLAINTIFFS’ MOTION FOR

PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

KOBICK, J.

Plaintiffs Adilson Monteiro, Karen Ginsburg, Jason Lutan, and Brian Minsk filed this

putative class action in January 2022, alleging that the defendants—The Children’s Hospital

Corporation, its Board of Directors, its Retirement Committee, and unknown Does—breached

certain fiduciary duties owed to the Children’s Hospital Corporation Tax-Deferred Annuity Plan

(the “Plan”) under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001,

et. seq. The complaint alleges that the defendants retained imprudent investments and permitted

the Plan to pay excessive recordkeeping fees after failing to properly monitor those investments

and fees. Following extensive discovery, the parties engaged in private mediation and agreed upon

settlement terms. Pending before the Court is the plaintiffs’ unopposed motion for preliminary

approval of a class action settlement. For the reasons to be explained, the motion will be granted.

BACKGROUND

The plaintiffs initiated this ERISA action in January 2022. ECF 1. The complaint alleges

that the defendants breached their fiduciary duties to maintain prudent investments and defray the

Plan’s expenses, in violation of 29 U.S.C. §§ 1109(a) and 1132 (Count I); violated 29 U.S.C.

§ 1109(a) by failing to monitor the Plan’s investments and fees (Count II); and, alternatively, are

liable for knowing breach of trust if they are not deemed fiduciaries under ERISA (Count III). Id.

¶¶ 105-21. The Court denied the defendants’ motion to dismiss the complaint in March 2023 and

their motion to certify interlocutory appeal in July 2023. ECF 56, 66. In October 2024, after

engaging in extensive discovery, the parties moved for, and the Court granted, a stay of this case

pending private mediation. ECF 87, 88. Following a successful mediation in February 2025, the

parties executed a settlement agreement in April 2025. ECF 91; ECF 96-1, ¶ 8; ECF 96-2.

DISCUSSION

I. Preliminary Class Certification.

To obtain class certification, the plaintiffs must establish the four threshold elements of

Federal Rule of Civil Procedure 23(a): numerosity, commonality, typicality, and adequacy of

representation. Smilow v. Sw. Bell Mobile Sys., Inc., 323 F.3d 32, 38 (1st Cir. 2003). They must

also demonstrate, as relevant here, Rule 23(b)(1)’s additional prerequisite that “prosecuting

separate actions by or against individual class members would create a risk of . . . adjudications

with respect to individual class members that, as a practical matter, would be dispositive of the

interests of the other members not parties to the individual adjudications or would substantially

impair or impede their ability to protect their interests.” Fed. R. Civ. P. 23(b)(1)(B).

For purposes of settlement, the plaintiffs have sufficiently satisfied the requirements of

Rules 23(a) and 23(b)(1)(B) to certify, as agreed by the parties, a class comprising “all persons

who participated in the Plan at any time during the Class Period, including any Beneficiary of a

deceased Person who participated in the Plan at any time during the Class Period, and any Alternate

Payee of a Person subject to a [Qualified Domestic Relations Order] who participated in the Plan

at any time during the Class Period.” ECF 96-2, at 7, § 1.46. The proposed class excludes the

defendants and their beneficiaries. Id. The “Class Period” is defined as “the period from January

18, 2016, through the date the Preliminary Approval Order is entered by the Court.” Id. at 3, § 1.13.

The plaintiffs have established that preliminary class certification is warranted. First, “the

class is so numerous that joinder of all members is impracticable,” Fed. R. Civ. P. 23(a)(1), because

it consists of over 20,000 participants, ECF 96-1, ¶ 4. See García-Rubiera v. Calderón, 570 F.3d

443, 460 (1st Cir. 2009) (identifying “the low threshold for numerosity” as more than forty

members (citation omitted)).

Second, “there are questions of law or fact common to the class.” Fed. R. Civ. P. 23(a)(2).

“A question is common if it is ‘capable of classwide resolution—which means that determination

of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in

one stroke.’” Parent/Pro. Advoc. League v. City of Springfield, Massachusetts, 934 F.3d 13, 28

(1st Cir. 2019) (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011)). The

commonality requirement is met here because many questions of law or fact exist that are common

to the plaintiffs and the proposed class, “including whether defendants were fiduciaries; whether

defendants breached their duties to the Plan . . . ; and whether the Plan suffered losses as a result

of defendants’ breaches.” In re Schering Plough Corp. ERISA Litig., 589 F.3d 585, 597 (3d Cir.

2009); see ECF 96, at 9 (listing additional common questions at issue).

Third, “the claims or defenses of the representative parties are typical of the claims or

defenses of the class,” Fed. R. Civ. P. 23(a)(3), because the plaintiffs’ claims concerning the

defendants’ management and administration of the Plan “‘aris[e] from the same event or practice

or course of conduct that gives rise to the claims of other class members, and . . . are based on the

same legal theory.’” García-Rubiera, 570 F.3d at 460 (citation omitted); see Hochstadt v. Bos. Sci.

Corp., 708 F. Supp. 2d 95, 103 (D. Mass. 2010) (finding typicality where plaintiff’s ERISA claims

were “based on the same basic legal theory as the claims of all other class members”).

Fourth, “the representative parties will fairly and adequately protect the interests of the

class,” Fed. R. Civ. P. 23(a)(4), because the plaintiffs’ interests “will not conflict with the interests

of any of the class members” and their chosen counsel are “qualified, experienced and able to

vigorously conduct the proposed litigation,” Andrews v. Bechtel Power Corp., 780 F.2d 124, 130

(1st Cir. 1985). The plaintiffs are pursuing claims on behalf of the Plan and thus share the same

interests as the class members in establishing that the defendants are liable for breaching their

fiduciary duties under the Plan and recovering damages for those breaches. ECF 96-1, ¶ 3. And

given their extensive experience litigating ERISA cases, the plaintiffs’ attorneys are able to

“properly and vigorously” represent the class. Andrews, 780 F.2d at 130; ECF 96-1, ¶¶ 5-6, 10.

Finally, separate lawsuits by “individual members of the class would have the practical if

not technical effect of concluding the interests of the other members as well, or of impairing the

ability of the others to protect their own interests.” Ortiz v. Fibreboard Corp., 527 U.S. 815, 833

(1999) (quotation marks omitted). “Classic” actions under Rule 23(b)(1)(B) include cases like this

one “charging ‘a breach of trust by an indenture trustee or other fiduciary similarly affecting the

members of a large class’ of beneficiaries.” Id. at 833-34 (quoting Fed. R. Civ. P. 23 1996 Advisory

Comm. Notes). The plaintiffs allege that the defendants breached their fiduciary duties and

affected a class of over 20,000 beneficiaries. Rule 23(b)(1)(B) is, accordingly, satisfied. See

Bowers v. Russell, No. 22-cv-10457-PBS, 2025 WL 342077, at *8 (D. Mass. Jan. 30, 2025) (Rule

23(b)(1) met where defendants allegedly “breached their fiduciary duties and affected a class of

394 beneficiaries”).

II. Preliminary Approval of Settlement.

Federal Rule of Civil Procedure 23(e) permits courts to “approve a class-action settlement

only if that settlement is ‘fair, reasonable, and adequate.’” Cohen v. Brown Univ., 16 F.4th 935,

943 (1st Cir. 2021) (quoting Fed. R. Civ. P. 23(e)(2)). While “approval or rejection of a class-

action settlement is entrusted to the district court’s informed discretion,” id. at 944, courts must

evaluate certain “procedural” and “substantive” factors, Murray v. Grocery Delivery E-Servs. USA

Inc., 55 F.4th 340, 345 (1st Cir. 2022). The procedural factors require consideration of whether

“the class representatives and class counsel have adequately represented the class” and “the

proposal was negotiated at arm’s length.” Fed. R. Civ. P. 23(e)(2)(A)-(B). The substantive factors

address whether “the relief provided for the class is adequate” and “the proposal treats class

members equitably relative to each other.” Fed. R. Civ. P. 23(e)(2)(C)-(D).

The parties’ settlement agreement is preliminarily approved pursuant to Rule 23(e) because

all four factors are met. First, the plaintiffs and their counsel have adequately represented the class.

Fed. R. Civ. P. 23(e)(2)(A). The “adequate representation inquiry serves to uncover conflicts of

interest between named parties and the class they seek to represent.” Murray, 55 F.4th at 345

(quotation marks omitted). As explained, the plaintiffs’ interests do not conflict with those of the

class because they, like other Plan participants, seek relief from the defendants’ allegedly

imprudent conduct in managing and administering the Plan. Their counsel have likewise

represented the class “competently and vigorously and without conflicts of interest.” In re Pharm.

Indus. Average Wholesale Price Litig., 588 F.3d 24, 36 n.12 (1st Cir. 2009). Given “the nature and

amount of discovery” conducted, counsel appear to have “an adequate information base” to justify

settling. Fed. R. Civ. P. 23(e)(2)(A)-(B) 2018 Comm. Notes. Indeed, counsel—who have extensive

experience litigating ERISA disputes—reviewed “thousands of relevant documents and

communications” before deciding to settle. ECF 96-1, ¶¶ 5-10.

Second, the parties negotiated the proposed settlement at arm’s length. Fed. R. Civ. P.

23(e)(2)(B). This factor considers whether settlement negotiations “were conducted in a manner

that would protect and further the class interests.” Fed. R. Civ. P. 23(e)(2)(A)-(B) 2018 Comm.

Notes. The record reflects that, over the course of this litigation, the parties conducted

comprehensive discovery and engaged in substantive negotiations before participating in a private

mediation and agreeing to settle. ECF 96-1, ¶¶ 7-8. The proposed settlement is, therefore, the

product of arm’s length negotiations without any collusion between the parties. See Nat’l Ass’n of

Deaf v. Mass. Inst. of Tech., No. 15-cv-30024-KAR, 2020 WL 1495903, at *4 (D. Mass. Mar. 27,

2020). And because “the parties negotiated at arm’s length and conducted sufficient discovery, the

district court must presume the settlement is reasonable.” In re Pharm. Indus., 588 F.3d at 32-33.

Third, the proposed settlement provides adequate relief to the class, especially when

compared to the costs, risks, and delays associated with continued litigation. Fed. R. Civ. P.

23(e)(2)(C). Rule 23 requires “balancing the advantages and disadvantages of the proposed

settlement as against the consequences of going to trial or other possible but perhaps unattainable

variations on the proffered settlement.” Nat’l Ass’n of Chain Drug Stores v. New Eng. Carpenters

Health Benefits Fund, 582 F.3d 30, 44 (1st Cir. 2009). After reviewing thousands of documents,

the plaintiffs’ counsel determined that the settlement was fair and reasonable based on “the merits

of the claims asserted, the strength of Defendants’ defenses, and the values of theoretical outcomes

of the case.” ECF 96-1, ¶¶ 7-9. Given the uncertainties of trial and the costs of litigation, the Court

agrees with the parties that the proposed settlement of $3 million is a reasonable amount. ECF 96-

2, at 4, 14, §§ 1.26, 4.4-4.5.

Fourth, the proposed settlement treats class members equitably. Fed. R. Civ. P. 23(e)(2)(D).

“Matters of concern could include whether the apportionment of relief among class members takes

appropriate account of differences among their claims.” Fed. R. Civ. P. 23(e)(2)(C)-(D) 2018

Comm. Notes. Under this agreement, each class member’s allocation will be proportionate to their

investment in the Plan. ECF 96-2, Ex. B, at 2-4, § 1.5; see ECF 96-2, at 16-17, § 5.3. Since “this

allocation of settlement dollars approximates the proportion of damages suffered by each”

member, the agreement appropriately treats all class members equitably. Mongue v. Wheatleigh

Corp., No. 18-cv-30095-KAR, 2023 WL 5435918, at *9 (D. Mass. Aug. 23, 2023).

III. Approval of Settlement Notice.

Federal Rule of Civil Procedure 23(e) requires that notice be provided “in a reasonable

manner to all class members who would be bound by the [settlement] proposal.” Fed. R. Civ. P.

23(e)(1)(B). Rule 23(c) similarly demands “the best notice that is practicable under the

circumstances, including individual notice to all members who can be identified through

reasonable effort.” Fed. R. Civ. P. 23(c)(2)(B). As the First Circuit has observed, the notice

requirement “is rooted in due process” and designed “‘to ensure that the plaintiff class receives

notice of the action well before the merits of the case are adjudicated.’” Brown v. Colegio de

Abogados de Puerto Rico, 613 F.3d 44, 51 (1st Cir. 2010) (citation omitted). At a minimum, the

“notice must clearly and concisely” describe to class members “(i) the nature of the action; (ii) the

definition of the class certified; (iii) the class claims, issues, or defenses; (iv) that a class member

may enter an appearance through an attorney if the member so desires; (v) that the court will

exclude from the class any member who requests exclusion; (vi) the time and manner for

requesting exclusion; and (vii) the binding effect of a class judgment on members under Rule

23(c)(3).” Fed. R. Civ. P. 23(c)(2)(B). Rule 23(c) also expressly permits notice by “United States

mail, electronic means, or other appropriate means.” Id.

The parties’ proposed notice and plan for issuing such notice satisfy the requirements of

Rule 23 and due process. The notice properly provides information about, among other items, the

claims in this action; the settlement agreement; class members’ rights to participate in, or object

to, the settlement; and the timing of the final approval hearing. See ECF 96-2, Ex. A. The

settlement agreement also calls for delivery of the notice by email or first-class U.S. mail to class

members’ last known addresses. ECF 96-2, at 9, 20, §§ 2.2.4, 8.2; see ECF 96 at 18; Loestrin 24

Fe Antitrust Litig., No. 13-MD-2472-S-PAS, 2020 WL 5203323, at *2 (D.R.I. Sept. 1, 2020)

(permitting notice by first class mail and email); Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173

(1974) (“Individual notice must be sent to all class members whose names and addresses may be

ascertained through reasonable effort.”).

IV. Appointment of Class Counsel, Class Representatives, and Settlement Administrator.

Federal Rule of Civil Procedure 23(g) “requires district courts to appoint class counsel and

governs how courts should choose counsel.” In re Pharm. Indus., 588 F.3d at 41. It states that

courts “must consider (i) the work counsel has done in identifying or investigating potential claims

in the action; (ii) counsel’s experience in handling class actions, other complex litigation, and the

types of claims asserted in the action; (iii) counsel’s knowledge of the applicable law; and (iv) the

resources that counsel will commit to representing the class.” Fed. R. Civ. P. 23(g)(1)(A). Rule

23(g) also provides that “counsel must fairly and adequately represent the interests of the class,”

and that courts may appoint such counsel “only if the applicant is adequate under Rule 23(g)(1)

and (4).” Fed. R. Civ. P. 23(g)(2), (4). Miller Shah LLP and Capozzi Adler, P.C. are appointed as

interim class counsel because, as discussed, they are experienced and have adequately and fairly

represented the class. See ECF 96-1, ¶¶ 5-6. They are thus responsible for ensuring, among other

things, that the notice process articulated in the settlement agreement is followed. See ECF 96-2,

at 10-11, §§ 2.3-2.4.

In addition, the plaintiffs are appointed as class representatives because they too have fairly

and adequately represented the interests of the proposed class. See Fed. R. Civ. P. 23(a)(4),

(e)(2)(A). The parties also “wish to . . . use . . . [a] professional claims administrato[r],” Strategic

Claims Services. Fed. R. Civ. P. 23(c)(2) 2018 Comm. Notes; see ECF 96-2, at 7, § 1.43. Strategic

Claims Services is, therefore, appointed as settlement administrator to carry out the notice plan

and administer the settlement process. See ECF 96-2, at 10-11, 13-18, §§ 2.3-2.4, 4-6.

V. Scheduling of Final Approval Hearing.

Federal Rule of Civil Procedure 23(e) states, in relevant part, that courts may approve a

settlement proposal “only after a hearing.” Fed. R. Civ. P. 23(e)(2). A final approval hearing will

accordingly be held on September 29, 2025 at 2:30 p.m. Eastern Time in Courtroom 3 of the John

Joseph Moakley Courthouse located at 1 Courthouse Way in Boston, Massachusetts.

CONCLUSION AND ORDER

For the foregoing reasons, the plaintiffs’ unopposed motion for preliminary approval of a

class action settlement, ECF 95, is GRANTED. The Court will issue a separate order generally

adopting the plaintiffs’ proposed order, which summarizes these findings, authorizes

dissemination of the class notice, and details the schedule moving forward, including for the final

approval hearing.

SO ORDERED.

/s/ Julia E. Kobick

JULIA E. KOBICK

Dated: May 12, 2025 UNITED STATES DISTRICT JUDGE