Opinion ID: 47919
Heading Depth: 2
Heading Rank: 3

Heading: Participant Releases.

Text: 40 While conceding that ordinarily the fact that up to nine thousand potential class members have signed releases of claims against EDS would defeat typicality and preclude class certification, the district court found a distinction here for two reasons. First, the court determined that the releases (which are otherwise quite broad, discharging all claims or demands against EDS) authorize the instant suit as one for benefits. 25 Appellants contend, with some force, that this exception only permits suits under ERISA § 502(a)(1)(B) to recover specific benefits owed a participant under the terms of an employee plan. As the Supreme Court explained in Russell, ERISA § 502(a)(1)(B) allows a beneficiary to recover plan benefits, whereas § 502(a)(2) allows recovery that inures to the benefit of the plan as a remedy for breach of fiduciary duties. Russell, 473 U.S. at 146-47, 105 S.Ct. at 3093; see also Rhorer v. Raytheon Eng'rs & Constructors, Inc., 181 F.3d 634, 639 (5th Cir.1999) (noting the numerous differences between causes of action under §§ 502(a)(1)(B) and 502(a)(2)). On the other hand, a release does not ordinarily preclude claims based on subsequent conduct. The enforceability of the releases presents difficult questions. 41 Additionally, the district court refused to consider individual releases pertinent to the maintenance of a derivative suit on behalf of the Plan. For the reasons stated in regard to the § 404(c) defense, however, this conclusion is untenable. The impact of the releases should not have been excluded from the district court's certification analysis. 42 Without commenting further on the enforceability of the releases or application of the benefits exception, we note that holders of releases could become a subclass if a class action is otherwise deemed appropriate. Contrary to the dissent, we are not holding that the releases foreclose any § 502(a)(2) suit on behalf of the Plan or foreclose any class certification. We do stress, however, that the status of perhaps nine thousand claimants is not a trifle — either to the Appellants or the claimants themselves. The district court must consider the releases more thoroughly on remand. 26 43