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Nauman v. Abbott Laboratories

April 3, 2007


The opinion of the court was delivered by: Judge Robert W. Gettleman


Plaintiffs Myla Nauman, Jane Roller and Michael Loughery, on behalf of themselves and all others similarly situated, brought a three count putative class action complaint against defendants Abbott Laboratories and Hospira, Inc., alleging violations of § 510 of ERISA, 29 U.S.C. § 1140. Count I, brought against Abbott, plaintiffs' former employer, alleges that Abbott terminated plaintiffs' employment by "spinning-off" the division for which they worked, with the specific intent to interfere with plaintiffs' attainment or receipt of benefits under the various Abbott Benefit Plans. Count II, also brought against Abbott, alleges that Abbott adopted a no-hire policy, under which it refused to rehire employees terminated as part of the spin-off for a period of two years, effectively eliminating any rights plaintiffs could have retained under the Abbott Benefit Plans. Count III, directed against Hospira, the new company spun-off from Abbott, alleges that Hospira by agreement with Abbott adopted a no-hire policy under which it refused to hire any employees who chose to first retire from Abbott and collect retirement benefits prior to seeking employment with Hospira. On December 30, 2005, the court certified a class as to Counts I and II against Abbott and a subclass under Count III. Nauman v. Abbott Laboratories, 2005 WL 3601696 (N.D. Ill. 2005). Plaintiffs then moved to amend the complaint to add Count IV, a breach of fiduciary duty claim against both defendants. On August 14, 2006, the court denied Abbott's motion to dismiss Count IV, but dismissed the count as to Hospira. Plaintiffs have now moved to certify Count IV as a class action against Abbott. They seek to certify the same class already certified for Counts I and II. For the reasons discussed below, that motion is granted.


Fed. R. Civ. P. 23, which governs class actions, requires a two-step analysis to determine if claim certification is appropriate. First, plaintiff must satisfy all four requirements of Rule 23(a): (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation. These elements are prerequisites for certification, and failure to meet any one of them precludes certification of a class. Second, the action must also satisfy one of the conditions of Rule 23(b). Joncek v. Local 14 Int. Teamsters Health and Welfare Fund, 1999 WL 755051 at*2 (N.D. Ill. 1999) (and cases cited therein).

In Count IV plaintiffs allege that Abbott was acting as an ERISA fiduciary when it exercised discretionary authority to communicate with plaintiff and other Abbott employees about their benefits upon termination with Abbott, and the future of the benefits if plaintiffs accepted employment with Hospira. Specifically, plaintiffs allege that on August 22, 2003, the Abbott Plan participants were told that "compensation and benefits for employees of the new company will remain the same through the end of 2004. For 2005 and beyond, the new company's management team and board of directors will access current and future management needs, and make appropriate decisions for you and the company." Similar statements were made in an August 22, 2003, telephone conference with 600 Abbott employees. According to plaintiffs, these statements were not true when made because Abbott omitted disclosure that both Abbott and the new Hospira company management team already knew and had already decided that the new company's benefits would be reduced for 2005 and beyond.

Rule 23(a) Elements


Rule 23(a)(1) requires that the proposed class be "so numerous that joinder of all members is impracticable." This court has already ruled that the proposed class satisfied the numerosity requirement, see Abbott, 2005 WL 3601696.

Commonality and Typicality

Commonality generally requires the presence of questions of law or fact common to the class. The rule does not mandate absolute commonality; a common nucleus of operative fact is usually enough to satisfy the requirement. Joncek, 1999 WL 755051 at *4. Typicality is satisfied if a plaintiffs' claim arises from the same event or practice or course of conduct that gives rise to the claim of the other class members, and if the claims are based on the same legal theory. Id. Because commonality and typicality are closely related, a finding of one often results in a finding of the other. Id.

Plaintiffs assert that there are a number of common class-wide questions, including:

(1) whether Abbott was acting in a fiduciary capacity when it failed to disclose accurate information to Plan participants about benefits at the new company; whether Abbott's communications to the class, or lack thereof, constituted a breach of its fiduciary duty;

(3) whether an to what extent the class was harmed by ...

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