United States District Court, S.D. Illinois
August 16, 2005.
KATHI COOPER, BETH HARRINGTON, and MATTHEW HILLESHEIM, Individually and on Behalf of All Those Similarly Situated, Plaintiffs,
THE IBM PERSONAL PENSION PLAN and IBM CORPORATION, Defendants.
The opinion of the court was delivered by: G. PATRICK MURPHY, Chief Judge, District
MEMORANDUM AND ORDER
Pursuant to this Court's Order dated July 31, 2003 (see Doc.
193), and the Class Action Settlement Agreement with Respect to
Subclasses 1 and 2 ("Settlement Agreement"), the Court finds as
1. This action satisfies the requirements of Rule 23 for the
reasons set forth in its prior certification order (see Doc.
70). The members of Subclasses 1 and 2 ("the Class") have at all
times been adequately represented by the Class Representatives
and Class Counsel.
2. The Notice approved by the Court was sent by first class
mail, postage prepaid, to the last known address of each
individual identified as a potential Class Member. In addition,
follow-up efforts were made to provide the Notice to individuals
whose original Notice was returned as undeliverable, and the
Notice was posted on a website. The Notice adequately described
the relevant and necessary terms of the proposed Settlement
Agreement. In the Matter of VMS Ltd. Partnership Sec. Litig.,
26 F.3d 50, 51-52 (7th Cir. 1994); In the Matter of VMS
Ltd., Partnership Sec. Litig., No. 89-C-9448, 1992 WL 203832, at
*4 (N.D. Ill. Aug. 13, 1992); Torrisi v. Tucson Elec. Power
Co., 8 F.3d 1370 (9th Cir. 1993).
3. The Notice provided to the Class fully complied with Rule
23, was the best notice practicable, satisfied all constitutional due process
requirements, and provides the Court with jurisdiction over the
Class Members. Eisen v. Carlisle and Jacquelin, 417 U.S. 156,
177-78 (1974); Phillips Petroleum v. Shutts, 472 U.S. 797
4. This Court has subject matter jurisdiction over this action
pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1367.
5. The Court has considered and applied the factors set forth
in Armstrong v. Board of School Directors of the City of
Milwaukee, 616 F.2d 305, 312 (7th Cir. 1980), overruled on
other grounds, Felzen v. Andreas, 134 F.3d 873 (7th Cir.
1998), for evaluating the settlement and has concluded that the
settlement is fair, reasonable, and adequate with respect to the
members of Subclasses 1 and 2. Armstrong, 616 F.2d at 312.
6. For the reasons stated in the Court's Order dated July 31,
2003, the Court concludes that the cash balance formula set forth
in Article 11 of the Plan Document ("Cash Balance Formula")
violates ERISA § 204(b)(1)(H). Therefore, the Clerk is directed
to enter judgment for the members of Subclasses 1 and 2 on their
claim that the Cash Balance Formula violates § 204(b)(1)(H) and
further enter judgment that these Class Members are entitled to
relief for the violation as provided in the Settlement Agreement.
7. For the reasons stated in the Court's Order dated July 31,
2003, with respect to the Cash Balance Formula, the Court
concludes that the alternative formula for calculating an
eligible employee's opening cash balance account set forth in
Article 17.5(b)(1)(B) of the Plan Document ("Always Cash Balance
Formula") violated ERISA § 204(b)(1)(H). The Clerk is directed to
enter judgment for the members of Subclasses 1 and 2 on their
claim that the Always Cash Balance Formula violates §
204(b)(1)(H) and further enter judgment that these Class Members
are entitled to relief for the violation as provided in the
8. Apart from the Cash Balance Claim and the Always Cash
Balance Claim as defined in the Settlement Agreement, all other claims asserted by Plaintiffs in
this action are DISMISSED with prejudice pursuant to the terms
of the Settlement Agreement and in exchange for the consideration
9. This Court retains jurisdiction over the interpretation,
implementation, and enforcement of the Settlement Agreement, as
well as any and all matters arising out of, or related to, the
interpretation, implementation, and enforcement of the settlement
or the Settlement Agreement. Without regard to the previous
sentence, however, any court may dismiss a Released Claim if such
a claim is asserted in such a court.
10. By separate Order, the Court has awarded attorneys' fees
and costs. Any attorneys' fees and costs awarded by the Court
will be paid by the Plan as an administrative cost of the Plan in
accordance with (and to the extent provided in) the Settlement
Agreement. Incentive awards approved by the Court will be paid by
Class Counsel from their fees. Any other fees or costs incurred
by a party will be paid by such party.
IT IS SO ORDERED.
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