Court Opinion

ID: 6345822
Source: CourtListenerOpinion
Date Created: 2022-06-01 19:00:28.038121+00
Date Added: 2024-06-11T09:15:06.379857
License: Public Domain

PRECEDENTIAL

        UNITED STATES COURT OF APPEALS
             FOR THE THIRD CIRCUIT

                       ___________

                       No. 21-2014
                      ____________

    MARY K. BOLEY; KANDIE SUTTER; PHYLLIS
JOHNSON, Individually and as representatives of a class of
similarly situated persons, on behalf of the Universal Health
           Services, Inc. Retirement Savings Plan

                             v.

UNIVERSAL HEALTH SERVICES, INC.; UNIVERSAL
INC.; THE UHS RETIREMENT PLANS INVESTMENT
            COMMITTEE; DOES 1-10,
        Whose Names Are Currently Unknown

   Universal Health Services, Inc. and Health Universal
    Health Services, Inc. Retirement Plans Investment
                       Committee,
                                                Appellants
              _______________________

     On Appeal from the United States District Court
        for the Eastern District of Pennsylvania
            D.C. Civil Action No. 2-20-cv-02644
        (District Judge: Honorable Mark A. Kearney)
                      ______________

                  Argued: February 11, 2022

    Before: GREENAWAY, JR., SCIRICA and COWEN1,
                   Circuit Judges.

                     (Filed: June 1, 2022)

Deborah S. Davidson
Morgan Lewis & Bockius
110 North Wacker Drive
Suite 2800
Chicago, IL 60606

Michael E. Kenneally [ARGUED]
Morgan Lewis & Bockius
1111 Pennsylvania Avenue, N.W.
Suite 800 North
Washington, DC 20004

Matthew D. Klayman
Brian T. Ortelere
Morgan Lewis & Bockius

1
 The Honorable Robert E. Cowen assumed inactive status on
April 1, 2022 after the argument and conference in this case,
but before the filing of the opinion. This opinion is filed by a
quorum of the panel pursuant to 28 U.S.C. § 46(d) and Third
Circuit I.O.P. Chapter 12.

                               2
1701 Market Street
Philadelphia, PA 19103

Sean K. McMahan
Morgan Lewis & Bockius
1717 Main Street
Suite 3200
Dallas, TX 75201

      Counsel for Appellants

John M. Masslon, II
Washington Legal Foundation
2009 Massachusetts Avenue, N.W.
Washington, DC 20036

      Counsel for Amicus Appellant

Alec Berin
James C. Shah
Miller Shah
1845 Walnut Street
Suite 806
Philadelphia, PA 19103

James E. Miller [ARGUED]
Miller Shah
65 Main Street
Chester, CT 06412

Mark K. Gyandoh
Gabrielle P. Kelerchian
Capozzi Adler

                               3
312 Old Lancaster Road
Merion Station, PA 19066

Donald R. Reavey
Capozzi Adler
2933 North Front Street
Harrisburg, PA 17110

       Counsel for Appellees

                     _________________

                 OPINION OF THE COURT
                    _________________

SCIRICA, Circuit Judge

        In this interlocutory appeal, fiduciaries of a retirement
plan appeal the District Court’s certification of a class of
participants who allege the fiduciaries breached their duty
under the Employee Retirement Income Security Act of 1974
(“ERISA”). At issue in this case is whether the typicality
requirement of Federal Rule of Civil Procedure 23(a) is
satisfied when the class representatives did not invest in each
of a defined contribution retirement plan’s available
investment options.

       We will affirm. Because the class representatives allege
actions or a course of conduct by ERISA fiduciaries that
affected multiple funds in the same way, their claims are
typical of those of the class.

                               4
         I. FACTS AND PROCEDURAL HISTORY

       Universal Health Services, Inc. sponsors the Universal
Health Services, Inc., Retirement Savings Plan (the “Plan”), a
defined contribution retirement plan,2 in which qualified
employees can participate and invest a portion of their
paycheck in selected investment options.          The Plan’s
investment options and administrative arrangements are
chosen and ratified by the UHS Retirement Plans Investment
Committee (the “Committee”). The Committee is appointed
and overseen by Universal. Both Universal and the Committee

2
  ERISA covers two types of retirement plans: defined benefit
plans and defined contribution plans. A defined benefit plan
“generally promises the participant a fixed level of retirement
income, which is typically based on the employee’s years of
service and compensation.” LaRue v. DeWolff, Boberg &
Assocs., Inc., 552 U.S. 248, 250 n.1 (2008); see 29 U.S.C.
§ 1002(35). The promised payments are made to participants
from the plan’s “general pool of assets.” Hughes Aircraft Co.
v. Jacobson, 525 U.S. 432, 439 (1999). A defined contribution
plan, in contrast, “promises the participant the value of an
individual account at retirement, which is largely a function of
the amounts contributed to that account and the investment
performance of those contributions.” LaRue, 552 U.S. at 250
n.1. In a defined contribution plan, “all of the plan’s money is
allocable to plan participants,” and the “vested benefits are the
contents of [each participant’s] account: contributions (from
both the participant and employer) plus investment gains
minus investment losses and any allocable expenses.” Graden
v. Conexant Sys. Inc., 496 F.3d 291, 297, 301 (3d Cir. 2007).

                               5
serve as the Plan’s fiduciaries and administrators (collectively,
“Universal").

       Since 2014, the Plan’s available investment options
consisted of thirty-seven funds, including mutual funds and a
collective investment trust. As with most investment funds,
the Plan funds charge participants annual management fees.
The Plan also charges participants an annual recordkeeping
and administrative fee. Each year, every investor in the Plan
would pay the annual recordkeeping and administrative fee,
plus the additional fees associated with whichever investment
fund or funds in which he or she chose to invest.

        Among the investment options is the Fidelity Freedom
Fund suite, consisting of thirteen target date funds. Target date
funds are managed funds that shift in investment strategy as a
target retirement year approaches. The Fidelity Freedom Fund
suite was designated as the Plan’s Qualified Default
Investment Alternative, meaning Universal would
automatically invest Plan participants’ money in one of the
thirteen Fidelity Freedom Funds if no other investment
selection was made.

        The class representatives are three current and former
participants in the Plan (the “Named Plaintiffs”). Between
them, the Named Plaintiffs invested in seven of the Plan’s
thirty-seven investment options. They were also charged the
Plan’s annual fee for recordkeeping and administrative
services.
        The Named Plaintiffs, on behalf of themselves and all
other Plan participants, sued Universal under 29 U.S.C.

                               6
§ 1132(a)(2)3 and 29 U.S.C. § 1109.4 The Named Plaintiffs
allege Universal breached its fiduciary duty by including the
Fidelity Freedom Fund suite in the plan, charging excessive
recordkeeping and administrative fees, and employing a
flawed process for selecting and monitoring the Plan’s
investment options, resulting in the selection of expensive
investment options instead of readily-available lower-cost
alternatives.   The Named Plaintiffs also allege certain
Universal defendants breached their fiduciary duty by failing
to monitor the Committee appointed to manage the Plan.

       Universal moved for partial dismissal of the Named
Plaintiffs’ claims, contending the Named Plaintiffs lacked
constitutional standing to pursue claims relating to funds in

3
 An ERISA civil action may be brought “by the Secretary, or
by a participant, beneficiary or fiduciary for appropriate relief
under section 1109 of this title.” 29 U.S.C. § 1132(a)(2).
4
 The relevant provisions under ERISA regarding liability for
breach of fiduciary duty are set out in 29 U.S.C. § 1109(a):
       Any person who is a fiduciary with respect to a
       plan who breaches any of the responsibilities,
       obligations, or duties imposed upon fiduciaries
       by this subchapter shall be personally liable to
       make good to such plan any losses to the plan
       resulting from each such breach, and to restore to
       such plan any profits of such fiduciary which
       have been made through use of assets of the plan
       by the fiduciary, and shall be subject to such
       other equitable or remedial relief as the court
       may deem appropriate, including removal of
       such fiduciary.

                               7
which they did not personally invest. The District Court denied
Universal’s motion, holding the Named Plaintiffs had standing
to pursue all their claims because they alleged concrete injuries
resulting from Universal’s Plan-wide misconduct. Boley v.
Universal Health Servs., Inc., 498 F. Supp. 3d 715, 719 (E.D.
Pa. 2020). Accordingly, the Named Plaintiffs were permitted
to bring their claims as alleged, because “claims relating to
allegedly imprudent decision-making processes injure all plan
participants.” Id. at 723.

       The Named Plaintiffs then moved to certify a class
under Rule 23(b)(1), comprising all current and former Plan
participants (the “Class”). In opposition, Universal argued that
because the Named Plaintiffs did not invest in thirty of the
Plan’s funds, they lack standing to bring claims relating to
these funds, making these claims atypical to those of the Class.
Universal also argued the Named Plaintiffs’ claims were
atypical because the Named Plaintiffs lacked incentive to
demonstrate reasonable alternatives to the thirty funds in which
they did not invest.5

        The District Court rejected Universal’s argument and
certified a class composed of all participants in the Plan from

5
  Universal also argued that Named Plaintiffs’ claims were
atypical in the Class because of individualized defenses under
ERISA § 404(c) and potentially differing limitations periods.
But the District Court found there were no individualized
defenses and no differing limitations periods. Defendants
opted not to appeal that aspect of the District Court’s decision.

                               8
June 5, 2014, to the present.6 Boley v. Universal Health Servs.,
Inc., 337 F.R.D. 626 (E.D. Pa. 2021). It emphasized “[t]he
focus of the Participants’ claims is on [Universal’s] conduct as
to all Plan participants rather than about the individual
investment choices made by Participants and putative Class
members.” Id. at 636. Referencing its earlier decision denying
Universal’s partial motion to dismiss for lack of standing, the
District Court reiterated its view that the Named Plaintiffs
challenged Universal’s Plan-wide conduct. For this reason, the
District Court held the Named Plaintiffs’ claims were typical

6
 The District Court certified this class under Rule 23(b)(1).
Fed. R. Civ. P. 23(b)(1) provides that a class action may be
maintained if:
       prosecuting separate actions by or against
       individual class members would create a risk of
       (A) inconsistent or varying adjudications with
       respect to individual class members that would
       establish incompatible standards of conduct for
       the party opposing the class; or (B) 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.
The District Court held certification was proper under both
Rule 23(b)(1)(A) and Rule 23(b)(1)(B). 337 F.R.D. at 638–39.
Universal does not challenge that certification was proper
under either Rule 23(b)(1)(A) or (b)(1)(B). It only challenges
that the general requirement of typicality under Rule 23(a) was
satisfied.

                               9
of claims regarding the funds in which the Named Plaintiffs
did not invest. Universal petitioned for leave to appeal the
class certification decision on an interlocutory basis under Fed.
R. Civ. P. 23(f). We granted Universal’s petition for an
interlocutory appeal.

                      II. JURISDICTION

        The District Court had statutory federal-question
jurisdiction over this ERISA lawsuit under 28 U.S.C. § 1331.
We have jurisdiction over this interlocutory appeal of a class
certification decision under 28 U.S.C. § 1292(e). See also Fed.
R. Civ. P. 23(f).

       Universal does not challenge our statutory jurisdiction
over this suit but, as part of its typicality argument, challenges
the Named Plaintiffs’ standing under Article III. Specifically,
for purposes of this appeal, Universal characterizes the Named
Plaintiffs’ lack of standing as destroying typicality. But a lack
of standing would present a more fundamental problem for the
Named Plaintiffs because a lack of standing necessitates
dismissal of claims, whether brought in a class action or in any
other kind of suit. Because “our continuing obligation to
assure that we have jurisdiction requires that we raise the issue
of standing sua sponte,” Wayne Land & Mineral Grp. v. Del.
River Basin Comm’n, 959 F.3d 569, 574 (3d Cir. 2020)
(cleaned up) (quoting Seneca Res. Corp. v. Twp. of Highland,

                               10
863 F.3d 245, 252 (3d Cir. 2017)), we will address the Named
Plaintiffs’ standing directly, as a question of jurisdiction.7

        To establish standing, a plaintiff must show “(i) that he
suffered an injury in fact that is concrete, particularized, and
actual or imminent; (ii) that the injury was likely caused by the
defendant; and (iii) that the injury would likely be redressed by
judicial relief.” TransUnion LLC v. Ramirez, 141 S. Ct. 2190,
2203 (2021) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555,
560–61 (1992)). “[S]tanding is not dispensed in gross,” and “a
plaintiff must demonstrate standing for each claim he seeks to
press and for each form of relief that is sought.” Town of
Chester v. Laroe Ests., Inc., 137 S. Ct. 1645, 1650 (2017)
(citation omitted). Review of a party’s standing to sue is de
novo. Free Speech Coal., Inc. v. Att’y Gen., 974 F.3d 408, 419
(3d Cir. 2020).

       To determine whether the Named Plaintiffs have
standing, we first look to the Complaint. Count I claims a
breach of fiduciary duty and Count II claims a failure to
monitor fiduciaries. For Count I, the Named Plaintiffs allege
three specific breaches of fiduciary duty: first, Universal’s
alleged imprudence in offering the excessively expensive
Fidelity Freedom Fund suite to Plan participants; second,
Universal’s alleged failure to monitor and reduce the

7
  Because we address standing sua sponte, it is immaterial that
we only certified Universal’s petition to appeal the District
Court’s order pertaining to class certification, not the earlier
order pertaining to standing. Moreover, we are satisfied the
standing arguments were fully briefed by the parties, albeit in
the context of typicality and class certification, rather than
jurisdiction.

                               11
excessively high recordkeeping and administrative fees for the
Plan; and third, Universal’s alleged lack of a “prudent
investment evaluation process,” App. 59, ¶47, which resulted
in the Plan offering a menu of excessively expensive
investments.

        Taking these claims out of order, Universal concedes
the Named Plaintiffs have standing for the second claim
challenging the recordkeeping and administrative costs. We
agree.      The challenged conduct—charging each Plan
participant a flat annual recordkeeping and administrative
fee—affected all Plan participants in the same way. This
allegedly excessive annual fee would represent a concrete and
personal injury to a plaintiff regardless of the funds in which
he or she invested. It is immaterial to our standing analysis that
each plaintiff’s actual recovery would be personal to his or her
individual account, or that, due to the effects of compounding
interest, a flat annual fee represents a higher ultimate cost for a
plaintiff further from retirement than one close to retirement.

       For the alleged imprudent selection of the Fidelity
Freedom Fund suite, the Named Plaintiffs similarly have a
concrete injury flowing from the challenged conduct. The
Named Plaintiffs each invested in at least one of the Fidelity
Freedom Funds.        Importantly, the Named Plaintiffs’
allegations in the Complaint are that all of the funds in the suite
were imprudent for the same reasons—they were all
excessively expensive funds, because they invested in high fee
actively managed funds rather than low-cost index funds. If
the Named Plaintiffs’ allegations are true, each class
representative suffered a concrete injury traceable to
Universal’s imprudent choice to include the Fidelity Freedom
Fund suite in the Plan, rather than a suite consisting of target

                                12
date funds that invested in less expensive index funds. The
Named Plaintiffs have standing to bring this claim.

        The standing analysis for the final claim under Count I
is also similar. For this claim, the Named Plaintiffs allege
Universal “lack[ed] a prudent investment evaluation process”
when choosing and evaluating investments offered to Plan
participants. App. 59, ¶ 47. The Named Plaintiffs contend this
failure resulted in an excessively expensive investment menu.
Universal allegedly failed to “consider ways in which to lessen
the fee burden” on Plan participants, App. 57–58, ¶ 45, leading
to the Plan paying total investment management fees nearly
double those paid by comparable Plans. Because each class
representative invested in at least one fund with allegedly
excessive fees, the Named Plaintiffs adequately alleged they
suffered injury from Universal’s imprudent investment
evaluation process, and, accordingly, have standing to bring
this claim.

       For Count II, the Named Plaintiffs allege a failure to
monitor the performance of the Committee and its appointed
members, resulting in “imprudent, excessively costly, and
poorly performing” investments. App. 68, ¶ 80(c). This Count
incorporates the factual allegations supporting the three claims
in Count I, and, accordingly, relates to Universal’s conduct
regarding the administration of the Plan as a whole, not specific
funds. For this reason, Count II, like the claims in Count I,
alleges conduct by Universal that led to concrete injuries to all
of the Named Plaintiffs. Accordingly, the Named Plaintiffs
have standing to bring this claim as well.

       Since the Named Plaintiffs allege concrete injuries
traceable to the challenged decisions and courses of conduct of

                               13
the defendants, they have met the requirements for standing.
Article III does not prevent the Named Plaintiffs from
representing parties who invested in funds that were allegedly
imprudent due to the same decisions or courses of conduct. In
Sweda v. University of Pennsylvania we held that participants
in a defined contribution ERISA plan have standing to bring
claims alleging the fiduciary’s “process of selecting and
managing options must have been flawed” even though the
class representatives did not invest in every fund. 923 F.3d
320, 331 (3d Cir. 2019). We noted in Sweda that the class
representatives alleged they had invested in some of the
underperforming funds, and “[t]his allegation links the named
plaintiffs with the underperforming investment options and is
sufficient to show individual injuries.” Id. at 334 n.10; see also
Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 593 (8th Cir.
2009) (noting that as long as the named plaintiffs have alleged
individualized injuries with respect to all of their claims, they
“may proceed under § 1132(a)(2) on behalf of the plan or other
participants” even if relief “sweeps beyond [their] own
injur[ies]”).

        Universal asks us to reach the opposite conclusion,
contending the Named Plaintiffs’ allegations are really thirty-
seven separate claims challenging thirty-seven separate
investment options included in the Plan.            Universal
characterizes the Named Plaintiffs’ claims as mere “artful
pleading” and the District Court’s holding that the Named
Plaintiffs had standing as “exalting form over substance.”
Appellants’ Br. 40. But the Named Plaintiffs do not allege
thirty-seven individual breaches of fiduciary duty, but rather
several broader failures by Universal affecting multiple funds
in the same way. The District Court’s conclusion that the
Named Plaintiffs “do not pursue such piecemeal claims,” 498

                               14
F. Supp. 3d at 724, addressed the substance of the Named
Plaintiffs’ allegations. The decision to offer the suite of
Fidelity Freedom Funds was, in effect, one decision that led to
thirteen allegedly imprudent funds being included in the Plan;
the alleged failure to continuously evaluate management fees
affected all funds in the Plan in the same way; and the alleged
failure to monitor appointees resulted in high fees across the
Plan menu. To establish standing, class representatives need
only show a constitutionally adequate injury flowing from
those decisions or failures. The Named Plaintiffs allege such
an injury for each claim.

       Universal suggests this straightforward standing inquiry
should be adjusted in light of the Supreme Court’s decision in
Thole v. U.S. Bank N.A., 140 S. Ct. 1615 (2020). True, Thole
held that, in the absence of a personal loss to a plaintiff’s
account, an abstract breach of fiduciary duty or a diminishment
in a plan’s assets is insufficient to confer standing. See id. at
1619–20. But the Named Plaintiffs here have alleged the kind
of concrete, personalized injuries traceable to the challenged
conduct by defendants that Thole requires.

       Since the Named Plaintiffs each had a concrete and
personalized stake in each claim alleged in the complaint, they
may proceed under Article III. As the District Court properly
recognized, Universal’s concerns regarding the representation
of absent class members might implicate class certification or
damages but are distinct from the requirements of Article III.

                III. CLASS CERTIFICATION

      We review a district court’s certification of a class for
abuse of discretion. Newton v. Merrill Lynch, Pierce, Fenner

                               15
& Smith, Inc., 259 F.3d 154, 165 (3d Cir. 2001). A district
court abuses its discretion if its decision granting or denying
class certification “rests upon a clearly erroneous finding of
fact, an errant conclusion of law or an improper application of
law to fact.” In re Hydrogen Peroxide Antitrust Litig., 552
F.3d 305, 312 (3d Cir. 2008) (quoting Newton, 259 F.3d at
165).

        In this appeal, Universal contends class certification
was improper because the class failed to satisfy the Rule
23(a)(3) requirement that the class representative’s claims be
“typical of the claims . . . of the class.” Fed. R. Civ. P. 23(a)(3).
The requirement of typicality is imposed to prevent
certification when “the legal theories of the named plaintiffs
potentially conflict with those of the [class] absentees.”
Georgine v. Amchem Prods., Inc., 83 F.3d 610, 631 (3d Cir.
1996); see also Beck v. Maximus, Inc., 457 F.3d 291, 296 (3d
Cir. 2006) (noting the Supreme Court’s statement that
typicality and adequacy of representation “‘tend to merge’
because both look to potential conflicts” (alteration omitted)
(quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 626
n.20 (1997))). To avoid conflict, typicality seeks to ensure “the
interests of the class and the class representatives are aligned
‘so that the latter will work to benefit the entire class through
the pursuit of their own goals.’” Newton, 259 F.3d at 182–83
(quoting Barnes v. Am. Tobacco Co., 161 F.3d 127, 141 (3d
Cir. 1998)). In evaluating typicality, we focus on whether the
class representatives’ legal theory and claim, or the individual
circumstances on which those theories and claims are based,
are different from those of the class. In re Schering Plough
Corp. ERISA Litig., 589 F.3d 585, 597–98 (3d Cir. 2009).
        Here, the Named Plaintiffs allege Universal breached its
fiduciary duty under ERISA by failing to properly manage

                                 16
these investment options. But because the Named Plaintiffs
did not invest in all thirty-seven of the challenged funds,
Universal contends Plaintiffs’ claims are not typical of the
class. According to Universal, in the context of a defined
contribution plan under ERISA, named class representatives’
claims are not typical of the class unless the named
representatives invested in each of the challenged funds,
because, otherwise, the representatives would lack an incentive
to litigate on behalf of the class.

        Universal points out that to recover under ERISA, a
plaintiff must show both an inadequate fiduciary process and
the objective imprudence of offering each challenged fund.
See Renfro v. Unisys Corp., 671 F.3d 314, 322 (3d Cir. 2011).
Because the Named Plaintiffs did not invest in all the Plan’s
funds, Universal contends the Named Plaintiffs have no
incentive to focus their litigation efforts on the objective
imprudence of offering the funds in which they did not invest.
After all, any recovery stemming from those funds will not be
allocated to the Named Plaintiffs’ accounts. See Graden v.
Conexant Sys. Inc., 496 F.3d 291, 296 n.6 (3d Cir. 2007)
(explaining that any recovery under ERISA goes solely to the
participants who invested in the imprudent fund). This lack of
incentive, Universal insists, precludes a finding that the Named
Plaintiffs’ claims are typical of those of the class.

       We do not find Universal’s incentive argument
persuasive. The Named Plaintiffs have alleged that Universal
employed a flawed fund selection process resulting in a menu
of excessively expensive funds. They have also alleged
Universal failed to monitor expense ratios and consider
possible ways to lessen fees charged to participants. These
claims are the same for participants across all the Plan’s thirty-

                               17
seven funds. Each participant’s potential recovery, regardless
of the fund in which he or she invested, is under the same legal
theory—Universal’s breach of its fiduciary duty under ERISA
in managing the Plan’s investment options. Likewise, each
participant who was charged excessive fees when investing in
any of the Plan’s funds can trace his or her injury to the same
practice—Universal’s alleged failure to properly consider
expense ratios when selecting and updating the Plan’s
investment options.

       The same is true for the Named Plaintiffs’ allegations
that Universal imprudently offered a suite of Fidelity Freedom
target date funds with high expense ratios and aggressive
equity allocation as the Plan’s default investment option.
Although the Named Plaintiffs have only invested in three of
the suite’s thirteen target date funds, Universal’s decision to
add and retain the Fidelity Freedom suite is the cause of injury
for each participant across all thirteen funds. Accordingly, the
Named Plaintiffs’ claims relating to the funds in which they
invested are typical of the claims relating to the funds in which
they did not.

       This is not to say there are no factual differences
between any of the individual thirty-seven funds. Universal’s
alleged breach may have resulted in some funds charging
participants significantly higher fees than others. But these
differences relate to degree of injury and level of recovery. So
long as the alleged cause of the injury remains the same across
all funds, “even relatively pronounced factual differences will
generally not preclude a finding of typicality.” In re Prudential
Ins. Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d 283,
311 (3d Cir. 2016) (quoting Baby Neal v. Casey, 43 F.3d 48,
58 (3d Cir. 1994)). Indeed, “[o]ur jurisprudence ‘assures that

                               18
a claim framed as a violative practice can support a class action
embracing a variety of injuries so long as those injuries can all
be linked to the practice.’” Newton, 259 F.3d at 184 (quoting
Baby Neal, 43 F.3d 48, 63 (3d Cir. 1998)).

        Typicality does not require the class representatives’
claims be coterminous with those of the class. See Newton,
259 F.3d at 185 (“The inability of a class representative to
prove every other class members’ [sic] claim does not
necessarily result in failure of the typicality requirement.”).
We have held that typicality may be satisfied even if the class
representative must introduce additional evidence to support
the claims of absent class members. See Baby Neal, 43 F.3d at
58 (holding that a class representative suffering one specific
injury from the practice can represent a class suffering other
injuries so long as all the injuries are shown to result from the
practice). Here, the Named Plaintiffs’ interests are sufficiently
aligned with those of the class because the common allegation
for each class member—Universal’s alleged imprudence in
managing the Plan’s funds—is “comparably central to the
claims of the named plaintiffs as to the claims of the
absentees.” Baby Neal, 43 F.3d at 57; see also Newton, 259
F.3d at 185 (holding that typicality was satisfied because the
claims of each class member rested on a securities violation
resulting from a uniform course of conduct even though each
class member may be required to offer individual proof of
damages). For these reasons, typicality is satisfied even though
additional fund-specific proof of objective imprudence may be
required to support the claims of some class members.

       The cases Universal cites do not contradict this
typicality inquiry. Universal points to Schering Plough, our
most recent evaluation of typicality in the context of an ERISA

                               19
challenge to a defined contribution plan, in which we explained
that plaintiffs who lack a “monetary stake in the outcome” do
not have interests sufficiently aligned with those of the class.
589 F.3d at 600. The obvious difference between this case and
Schering Plough is that the Named Plaintiffs here have a
monetary stake in the outcome of the case. Unlike the class
representative in Schering Plough who was potentially subject
to a unique defense that precluded her from recovering
damages, see 589 F.3d at 600, the Named Plaintiffs here are
not subject to any unique defenses. The Named Plaintiffs
invested in seven of the Plan’s funds and, like other class
members, have a monetary stake in proving Universal’s
alleged imprudence.

        Universal also relies on Spano v. Boeing Co., 633 F.3d
574 (7th Cir. 2011), another ERISA challenge, in which the
Seventh Circuit, purporting to draw support from Schering
Plough, held typicality was lacking because the possibility that
only some of the funds were imprudent created a potential lack
of “congruence” between the claims of the class representative
and those of absent class members who invested in other funds.
Id. at 586. Specifically, Universal relies on Spano’s per se rule
that a “a class representative in a defined-contribution case
would at a minimum need to have invested in the same funds
as the class members.” Id.

       We find Universal’s reliance on Spano misplaced
because that decision was guided by concerns of potential
conflicts between the class representative and the class that are
not present here. As described by the Seventh Circuit in Abbott
v. Lockheed Martin Corp., the class in Spano covered all past
and future participants in the defined contribution plan even
though the allegations only concerned four specific funds. 725

                               20
F.3d 803, 813 (7th Cir. 2013). Moreover, the claims relating
to those four funds involved “somewhat vague” allegations
objecting to the inclusion of the funds and also alleging
misrepresentation and excessive risk. Id. It was this
“combination of exceedingly broad class definitions and
murky claims” that made it difficult for the Court in Spano to
assess whether “intra-class conflict of the sort that defeats both
the typicality and adequacy-of-representation requirements of
Rule 23(a) was all but inevitable.” Id. (characterizing Spano
as a “warning[] that plaintiffs and courts must take care to
avoid certifying classes in which a significant portion of the
class may have interests adverse to that of the class
representative”).

        Unlike Spano, there are no present concerns of intra-
class conflict in this case. In the context of ERISA, as in other
contexts, the potential for intra-class conflict depends on the
type of claim and the contours of the class. See Abbott, 725
F.3d at 813 (noting that class treatment in an ERISA case
“depends on the claims for which certification is sought”). As
stated, the Named Plaintiffs here allege Universal offered an
unnecessarily high-cost suite of actively managed target date
funds and lacked a prudent investment evaluation process
resulting in needlessly high expense ratios across the Plan. The
nature of these claims makes intra-class conflicts unlikely—it
is difficult to imagine class members who have benefited from,
or are content to pay, pointless fees. Cf. Abbott, 725 F.3d at
814 (explaining that it was “unlikely that the sorts of conflicts
that concerned us in Spano will arise” because no investor
would have benefited from a fund alleged to have been “so
low-risk that its growth was insufficient for a retirement
asset”). We are satisfied that the Named Plaintiffs’ interests
are sufficiently aligned with those of the class, and any concern

                               21
for conflicts is speculative. This is sufficient to pass the “low
threshold” that is typicality. Newton, 259 F.3d at 183.

        Certainly, there may be some situations where typicality
for an ERISA class would not be satisfied unless the class
representative invested in each of the challenged funds. But
that is not the case here. And because we think the typicality
inquiry is best served done on a case-by-case basis, we decline
to adopt a per se rule as to whether a class representative must
have invested in each of the challenged funds.

        We recognize that allowing class representatives to
bring claims relating to funds in which they did not invest may
result in some inefficiency at the damages stage. But these
concerns do not bar certification of this (b)(1) class. Rather,
they more closely resemble concerns that might relate to the
predominance and superiority requirements for (b)(3) classes
than they do the typicality requirement of Rule 23(a).8 See

8
  A baseline concern for efficiency is also incorporated into the
Rule 23(a) requirements and is accordingly present when
certifying mandatory classes under (b)(1) or (b)(2). See, e.g.,
Newton, 259 F.3d at 182 (“The significance of commonality is
self-evident: it provides the necessary glue among class
members to make adjudicating the case as a class
worthwhile.”); Baby Neal, 43 F.3d at 64 ( “[I]t is true that
commonality, typicality, and the Rule 23(b)(2) general
applicability requirements all manifest a concern about judicial
efficiency and manageability . . . .”).       But the specific,
heightened efficiency concerns of predominance and
superiority are only applicable to (b)(3) classes where the
justification for class treatment is weaker because individual
litigation may be a meaningful alternative to class litigation.

                               22
Newton, 259 F.3d at 184 (“[W]hether the class representatives’
claims prove the claims of the entire class highlights important
issues of individual reliance and damages that are more
properly considered and relevant under the predominance and
superiority analysis.”).

        Indeed, we have held that ERISA “breach of fiduciary
duty claims brought under § 502(a)(2) are paradigmatic
examples of claims appropriate for certification as a Rule
23(b)(1) class.” Schering Plough, 589 F.3d at 604. Consistent
with the basic principles underlying Rule 23(b)(1),
certification of an ERISA class as a (b)(1) class is not
dependent on the degree of individual proof that will be
required for individual plaintiffs to recover, but rather on the
recognition that deciding one plaintiff’s claim might mean
other plaintiffs might be unable to bring their own claims
separately. Id. (holding “it is simply not relevant to the Rule
23(b)(1)(B) inquiry” that plaintiffs’ claims “present individual
issues”).    Accordingly, Universal’s concerns about the
individualized proof that will be required for plaintiffs to
recover are not a reason here to prevent certification of a (b)(1)
ERISA class that meets the requirements of Rule 23(a).

                        CONCLUSION

       For these reasons, we will affirm the judgment of the
District Court.

See Amchem, 521 U.S. at 615 (noting that the predominance
and superiority requirements for (b)(3) classes were drafted to
be “[s]ensitive to the competing tugs of individual autonomy
for those who might prefer to go it alone or in a smaller unit,
on the one hand, and systemic efficiency on the other”).

                               23