Acosta et al v. Board of Trustees of UNITE HERE Health et al

Filing 224

MEMORANDUM Opinion and Order: Signed by the Honorable Rebecca R. Pallmeyer on 3/31/2025. Mailed notice. (cp, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JOSE LUIS ACOSTA, MARIA BUENROSTRO,)
ARMANDO GARCIA, MARIA SANCHEZ,
)
and GLYNNDANA SHEVLIN,
)
)
Plaintiffs,
)
)
v.
)
)
BOARD OF TRUSTEES OF UNITE HERE
)
HEALTH and DOES 1 through 10, inclusive, )
)
Defendants.
)

No.

22 C 01458

Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER
Jose Luis Acosta, Armando Garcia, Maria Sanchez, Glynndana Shevlin, and Maria
Buenrostro (“Named Plaintiffs”) move to certify a class of current and former plan participants of
UNITE HERE Health (“UHH”), an ERISA-covered healthcare plan. The Named Plaintiffs allege
that the Board of Trustees of UHH (“Defendant”) breached its fiduciary duties by taking on
exorbitant administrative costs and distributing costs disproportionately among “Plan Units.” They
seek relief under ERISA §§ 409, 502(a)(2), 502(a)(3), codified at 29 U.S.C. §§ 1109, 1132(a)(2),
and 1132(a)(3), respectively. The proposed class includes “at least” 7,513 individuals who were
members of two allegedly overcharged Units between March 2016 and present. For the reasons
stated below, Plaintiffs motion for certification is granted in part.
BACKGROUND
I.

Factual Background
The facts underlying this action are set out in two prior opinions ruling on Defendant’s

motions to dismiss. See Acosta v. Bd. of Trs. of UNITE HERE Health, No. 22 C 1458, 2023 WL
2744556, at *1–2 (N.D. Ill. Mar. 31, 2023) (Leinenweber, J.); Acosta v. Bd. of Trs. of UNITE HERE
Health, No. 22 C 1458, 2024 WL 3888862, at *1–2 (N.D. Ill. Aug. 21, 2024).

The court,

nonetheless, summarizes the facts relevant to the parties’ arguments for and against certification.

A.

UHH’s Structure and Cost Allocation

UHH is a Taft-Hartley multiemployer trust fund providing healthcare coverage to
approximately 110,000 employees working for hundreds of employers nationwide. (Am. Compl.
[46] ¶¶ 1–2.)

Given the discrepancies in cost and coverage needs across geography and

industries, UHH divides its coverage into “Plan Units,” which function as independent, selfsustaining benefit programs with different benefit options and independent operating budgets.
(Simon Decl. [84-3] ¶ 4.) The Plan Units are divided in different ways, some by geography (e.g.
Boston Plan, Detroit Plan), some by industry (e.g. Food Service Plan, Chicago Hotels/Casinos
Plan). (See generally UHH 2022-23 Dashboard [78-18] at UHH040200.) The health plans offered
in each Plan Unit fall into three categories: fully-insured plans, self-insured plans, and partiallyinsured plans. (Am. Compl. ¶¶ 46–49); see also Acosta, 2023 WL 2744556, at *2. In fully-insured
plans, benefits claims are paid through third-party insurance, and UHH funds are used to pay the
insurance premiums. (Id.) In self-insured plans, UHH funds are used to directly pay for the cost
of benefits, without the use of third-party insurance. (Id.) Partially-insured plans are hybrid plans
in which some benefits are fully-insured and others are self-insured by UHH. (Id.)
Three Plan Units are relevant to the claims in this case: Unit 178, Unit 278, and Unit 150.
Plan Unit 178 covers employers in Los Angeles County, California. (Id. ¶ 109.) Plan Unit 278
covers employers in Orange County and Long Beach, California. (Id. ¶ 126.) Both Unit 178 and
Unit 278, for all relevant times, have been fully-insured plans with respect to medical, vision, and
life insurance benefits. (Id. ¶¶ 110, 127.) Until June 1, 2021, participants of Units 178 and 278
could obtain self-insured dental care through the UHH-operated Los Angeles Dental Center. (Id.)
Since June 1, 2021, dental benefits have been fully-insured as well for both plans. (Id.) Unit 150,
also known as the “Las Vegas Plan” or the “Culinary Health Plan,” covers employers in Las Vegas,
Nevada. (Id. ¶ 89.) Unit 150 is a partially insured plan—UHH operates a medical clinic called the
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“Culinary Health Center,” where Unit 150 participants can exclusively obtain primary, pediatric,
dental, and vision care free of charge. (Id. ¶ 90–94.) In addition to contributing funds to UHH for
the payment of benefits to plan-members, each Plan Unit must also contribute funds for the
payment of UHH’s administrative expenses. The amount that each Unit must pay towards
administrative expenses is calculated at two stages: first, the allocation of projected administrative
expenses when UHH generates minimum contribution rates employers must contribute to the
fund, and, second, when UHH actually allocates expenses by using contributions to pay off
administrative expenses at the end of the fiscal year.
1.

Projection of Administrative Expenses

UHH is funded almost exclusively by the periodic contributions paid into it by participant
employers and employees. (See Pls. Mem. [78-1] at 3, O’Donnell Decl. [78-2] ¶ 53.) Employers
contribute to the fund at rates set by collective bargaining with the employee unions. (See
Minimum Standards [78-6] at UHH0406694–96.) But while the precise contributions made by
employers to UHH are set by collective bargaining, there is a floor: UHH sets a minimum threshold
(also known as a “target contribution rate” or “published rate”) that each employer must contribute
to cover the cost of benefits, maintain a surplus, and account for administrative expenses. (See
id. at UHH0406696; see also Simon Dep. Tr. [78-37] at 56:15–57:2.) In bargaining with the union,
an employer may agree to contribute more than the minimum threshold set by UHH but may not
contribute less than the target rate without UHH’s permission. (See Simon Decl. [84-3] ¶ 17,
Minimum Standards at UHH056696.) Alternatively, some employers come to “bucket allocation”
agreements through collective bargaining. In bucket allocations, in contrast to the previously
described “published-rate” agreements, an employer does not agree to pay a specific rate in
contributions to UHH, but instead agrees to provide a pool of funds to the union and leaves it to
the union’s discretion to divide the available funds for payment of healthcare costs (i.e.
contributions to UHH), wages, pension funds, and other benefits. (Simon Decl. ¶ 16.) In the
bucket-allocation scenario, UHH does not create a minimum requirement, but provides a target
3

rate as a recommendation to the union to maintain the self-sufficiency of the fund; the union has
the final say on how much to contribute. Simon Dep. Tr. at 191:24–192:5.)
In calculating target employer contribution rates, Units 178 and 278 are treated differently
than other Plan Units; they are subdivided further into “employer categories,” for which UHH’s
underwriters develop different target contribution rates as if each category were a Plan Unit itself.
(See Simon Decl. ¶ 10.) 1 For each employer category, UHH’s chief underwriter Robert Simon
explains, UHH underwriters determine the target employer contribution rate using a six-step
process: (1) UHH projects the medical cost per employee per month (“PEPM medical cost”) at
the employer-category level; (2) UHH projects other costs (including life, dental, and vision
insurance benefits) at the employer-category level, combining with the PEPM medical cost to
project an aggregate “PEPM benefits cost”; (3) administrative expenses and necessary reserve
maintenance 2 are then estimated as a percentage of benefits cost, and the PEPM benefits cost
is multiplied by these administrative expense and necessary reserve “factors,” to determine a
“composite target PEPM rate”; (4) UHH then multiplies the composite target PEPM rate by the
projected number of eligible employees (on annual basis), generating a “target annual dollar
amount” for each category; (5) UHH then subtracts any amounts the union has agreed to
contribute (“employee contributions”) and investment income and divides the resulting number by
the total annual expected work hours, producing a targeted hourly employer contribution rate for
This subdivision (unique to Units 178 and 278) predates the Units’ participation in
UHH. Unit 178 was previously the free-standing Los Angeles Hotel-Restaurant Employer Union
Welfare Fund, and Unit 278 was the former UNITE HERE Long Beach and Orange County Health
Benefit Fund; both merged into UHH in 2012. (Simon Decl. ¶ 5.) Prior to the merger, the funds
were divided into employer categories because of “varying eligibility rules” across different kinds
of employers. (Id. ¶ 10.) Since 2016, Unit 178 has been divided into three employer categories
(LA hotels, LA cafeterias, LA event centers) and Unit 278 has been divided into four categories
(OC hotels, OC cafeterias, OC event centers, and OC restaurants). (Id.)
1

“Necessary reserve maintenance” refers to the charge incorporated into the target
employer contribution rate intended to maintain the fund’s “reserve”—a surplus of funds set aside
to cover, in the event of an emergency, six months of UHH’s liabilities and payment obligations.
(See Simons Dep. Tr. at 189:3–23; 2020 Reserve Policy [78-36] at UHH051965.)
2

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each employer category. (Id. ¶ 12.) UHH’s process for developing target rates yields a different
target contribution rate for each employer, dependent on the employer’s category within Units 178
and 278.
As described above, administrative expenses enter UHH’s calculation of target
contribution rates at step three; administrative expenses are estimated as a “factor” or percentage
of total benefit costs. The calculation of the factor itself is standardized. The administrative
expense factor (i.e. the specific percentage), unlike the PEPM benefit costs, is not calculated at
the employer-category level, but is consistent across all employer-categories within Units 178 and
278; indeed, UHH uses the same factor for Unit 178 and Unit 278 plans. (See Simon Dep. Tr. at
50:18–51:4.) Importantly, the administrative expense factor covers not only Unit-specific costs
but also administrative expenses for the fund as a whole. (See id. at 51:5–14.) UHH has
decreased the factor for Units 178 and 278 in recent years from 7.5% to 6.5% as administrative
expenses have become a smaller percentage of the fund’s overall costs. (Id.) Additionally, UHH
ascribes a discounted administrative expense factor to Units 178 and 278 (relative to other Units)
because they are fully-insured plans—meaning that UHH has fewer administrative costs in
providing benefits than UHH has in providing benefits to other, partially-insured Units. (Id. at
51:20–52:12.) See also Acosta, 2024 WL 28888862, at *2 (explaining how fully-insured plans
have fewer administrative costs than partially-insured plans).
2.

Actual Allocation of Administrative Expenses

The projection of administrative expenses performed by UHH’s underwriters is unrelated
to the method used by UHH’s finance department for allocating actual administrative expenses
among Plan Units at the end of the fiscal year. (See Simon Dep. Tr. at 49:10–50:1.) At this stage,
UHH has a pool of funds from each Plan Unit that the Unit has contributed during the year, and
UHH must determine how much to take from each Unit’s pool to pay for shared administrative
expenses. UHH does so pursuant to a written administrative expense allocation policy adopted
by the Board of Trustees on September 28, 1988. (See Stipulations [78-4] ¶¶ 27.1, 28; see also
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Allocation Policy [78-19].)

The Allocation Policy document establishes that the “common

denominator on which to base the allocation of expenses is total contributions handled in any
given time period.” (Allocation Policy at UHH063820.) In other words, the proportion that a Unit’s
contributions make of the total contributions to UHH in a given year is the proportion of
administrative expenses that their funds will be used to pay for—if Unit A’s contributions make up
10 % of the total contributions to UHH, UHH will draw from Unit A’s pool of contributions to pay
for 10 % of the administrative expenses; or, in UHH’s terms, UHH will “allocate” 10 % of the
administrative expenses to Unit A.

(Id.; see, e.g., March 31, 2000 Expense Allocation

Presentation [78-22] at UHH045836.) According to this scheme, each Plan Unit’s contributions
will be used to pay for an amount of administrative costs roughly proportional to the Unit’s size (in
terms of contributions) in the fund.
But there is a caveat to this “proportional” distribution of administrative expenses: UHH’s
Allocation Policy also gives discounts to specific Units in allocating expenses, including a 33.3%
weighting 3 to contributions from Unit 150 (then called “APBA”) for administrative expenses relating
to Executive and Accounting Staff because “[UHH staff members] expend some effort for the [Unit
150] but, because their efforts are less, we believe a special [lower rate] is warranted.” (Allocation
Policy at UHH63820.) 4 The discounting of Unit 150’s contributions has a significant impact on
This 33.3% weighting works in the following manner: say Unit 150 contributes 60%
of the total contributions received by UHH in a given year; under the terms of the Allocation Policy
(without a discount) UHH will draw from Unit 150’s funds to pay for 60% of the shared
administrative expenses. But with the 33.3% percent weighting, UHH treats Unit 150 as having
contributed only 20% (60% divided by three) of the total contributions to the fund, and allocations
20% instead of 60% of the administrative costs to Unit 150. Importantly, this results in every other
Plan Unit paying more in administrative funds: without the discount, only 40% of the administrative
expenses were distributed among the funds of other Units; after the discount, 80% of the
administrative expenses are paid by the other Units.
3

UHH’s policy documents have not been consistent on this justification. A 1994
document summarizing UHH’s allocation policy, for example, explains that the Las Vegas Unit’s
contributions to the fund are weighted at 33.3% because “these Funds contribute such a[]
disproportionate amount and should not be allocated such a high percentage expenses.” (1994
Administrative Expense Memorandum [78-20] at UHH045785.) In 2009, UHH’s Executive
4

6

the administrative expense borne by other Plan Units, as Unit 150 is by far the largest unit in the
fund—in fiscal year 2022–23, Unit 150’s contributions to the fund were roughly equivalent to the
contributions of all other Units put together. (See UHH 2022–23 Dashboard at UHH040201–02
(comparing Unit 150 contributions and expenses to “All Non-Culinary Plans,” i.e. all other units).)
Indeed, the claims in this action arise from the effects of this discounting: because Unit 150’s
administrative expense burden is greatly reduced, every other unit (including Units 178 and 278)
must pick up the slack and pay an amount of administrative expenses disproportionate to their
relative size (in terms of contributions) in the fund.
The basic methodology of shared expense allocation appears to have remained consistent
since 1988: shared administrative expenses (namely executive and accounting staff expenses)
are divided amongst the Plan Units according to the contributions from each Unit, and the Las
Vegas (150) Plan Unit’s contributions are weighted at a third. (See 2021 Allocation Report [7824] at UHH045363.) An analysis performed on UHH’s financial dashboards—annual reports
showing the contributions and administrative expenses allocated to each Plan Unit—since 2016
show that the methodology results in assessing Unit 150 between $529.36 and $805.84 per
participant in administrative expenses. (O’Connell Decl. [78-2] ¶¶ 55–56; see also Pl.’s Expenses
Analysis [78-38] at PTF07494–95.) Over the same period, Units 178 and 278 (treated as one
entity in UHH’s dashboards) have been assessed between $1,014.82 and $2,152.80 per
participant in administrative expenses. (Id.)
B.

Defendant’s Alleged Breaches

Named Plaintiffs claim that Defendant breached its fiduciary duties of loyalty and prudence
by failing “to ensure that plan expenses are allocated among participants in a manner reasonably
related to the services furnished to individual participants.” (See Am. Compl. ¶ 182.) In short,
Plaintiffs allege that, as a result of two unjustified decisions, UHH charged the participants of Units
Committee described the reasons behind UHH’s allocation methodology as “lost in the mists of
time.” (November 19, 2019 UHH Executive Committee Minutes [78-7] at UHH046017.)
7

178 and 278 administrative expenses in excess of the value of the benefits they received. (See
generally id. ¶¶ 180–93.)
First, Plaintiffs claim that Defendant’s internal allocation of administrative expenses
between Plan Units was not reasonably related to the value of services, resulting in fully-insured
Units like 178 and 278 paying more in administrative expenses (per participant) than the partiallyinsured Unit 150 despite receiving a lower standard of healthcare benefits. (Id. ¶ 185.) Between
fiscal years 2016 and 2023, Units 178 and 278 paid at least 80% (and as much as 100%) more
in administrative expenses per participant than Unit 150. (See O’Donnell Decl. ¶¶ 56–57.)
Second, UHH’s cost-allocation method aside, Plaintiffs also allege that UHH took on
exorbitant fund-wide administrative costs when compared to reasonably analogous multiemployer
healthcare funds. (See Am. Compl. ¶¶ 187–93.) Using data available from the Department of
Labor, 5 Plaintiffs compared UHH’s total administrative expenses with the reported expenses of
other self-insured and partially self-insured healthcare funds having at least 20,000 participants
between April 2016 and 2023 (the most recent data available). (See O’Donnell Decl. ¶ 62–73.)
From this comparison, Plaintiffs assert that UHH took on $72,836,445.10 more in administrative
expenses than the average, comparable self-insured plan, and $235,845,102.96 more in
administrative expenses than the average partially self-insured plan. (Id. ¶¶ 74–75.) Combined
with Defendant’s disproportionate allocation of administrative expenses among Plan Units,
Plaintiffs claim that they were assessed an unreasonably large slice of an unreasonably large pie.

ERISA requires that ERISA-covered health and welfare plans file an annual report
with the Department of Labor and Internal Revenue Service. 29 U.S.C. § 1021. The Department
of Labor’s regulations further require that plans with more than 100 participants satisfy this
reporting requirement through Form 5500, which requires that a plan administer provide
information on the total number of active participants at the beginning and end of fiscal year, the
types of benefits provided by the plan, the plan’s yearly administrative expenses, the plan’s
assets, and much more. 29 C.F.R. § 2520.103-1; (see generally Am. Compl. ¶¶ 137–39.) The
Department of Labor then compiles the forms and makes them searchable on its website. See
DOL Form 5500 Search. https://www.efast.dol.gov/5500Search/ (last accessed January 30,
2025.)
5

8

Plaintiffs further allege that Defendant’s breach of its fiduciary duties resulted in lost wages
and benefits on the part of plan participants. Specifically, Plaintiffs allege that because Units 178
and 278 were charged for exorbitant expenses, the target contribution rates for Unit 178 and 278
employers were inflated to subsidize expenses properly attributable to Unit 150 and Defendant’s
overspending. (See Am. Compl. ¶¶ 197–98.) Had the target contribution rate been reasonably
related to the healthcare benefits received by Unit 178 and 278 participants, Plaintiffs claim, the
dollars spent on administrative expenses could have been spent (either by the employer in a
published-rate allocation, or by the union in a bucket allocation) towards wages or other benefits.
(Id. ¶ 8); see also Acosta, 2023 WL 2744556, at *3–4 (finding that Plaintiffs had standing to bring
ERISA claim by tying Defendant’s alleged breach to lost wages).
C.

The Named Plaintiffs

The five named plaintiffs in this action are current or former participants of Units 178 and
278 who allege they were subject to exorbitant administrative expenses described above.
Relevant to the court’s determination of Named Plaintiffs’ suitability as representatives of the
proposed class is their precise relationship to the fund and their participation in the litigation of
their claims so far.
1.

Named Plaintiffs’ Relation to Fund

Plaintiff Acosta has been a bartender for the Manhattan Beach Wesdrift Hotel since 1987
and was a participant in UHH Plan Unit 178 from approximately 2012 to 2022. (Am. Compl. ¶ 12.)
Plaintiff Garcia works as a Senior Lead Steward for Westin Bonaventure Hotel & Suites in Los
Angeles, California, and was a participant in UHH between 2012 and November 1, 2020. (Id.
¶ 13.) Since November 1, 2020, he has received benefits through a multiemployer plan called
the Santa Monica UNITE HERE Health Benefit Trust Fund (hereinafter “Santa Monica Fund”).
(Id.) Plaintiff Sanchez works as a banquet server for Aramark Sports, LLC, a position she has
held since 1986, and was a participant in UHH Plan Unit 278 from approximately 2012 to 2022.
(Id. ¶ 14.) Plaintiff Shevlin has been employed by Walt Disney Parks and Resorts since 1988,
9

currently working as a Food and Beverage Concierge. (Id. ¶ 15.) She was a participant in UHH
Plan Unit 278 from at least 2012 until October 1, 2021; thereafter, she received benefits through
the Santa Monica Fund. (Id.) Plaintiff Buenrostro has been employed by the Los Angeles
Convention Center since 2000, where she currently works as a banquet server. (Id. ¶ 16.) She
has been a participant in Plan Unit 178 from at least 2012 to present. (Id.) All named Plaintiffs
reside in and around Los Angeles or Orange County, California, 6 and all are represented by
UNITE HERE Local 11 (“Local 11”) in collective bargaining with their respective employers. (See
id. ¶¶ 12–16.)
2.

Plaintiffs’ Participation in the Litigation

Each of the Named Plaintiffs has responded to UHH’s interrogatories and requests for
documents, and each claims to understand the responsibilities of serving as class
representatives, including reviewing documents and monitoring the case. (See Acosta Decl. [7857] ¶ 9, Buenrostro Decl. [78-58] ¶ 11, Garcia Decl. [78-59] ¶ 10, Sanchez Decl. [78-60] ¶ 10,
Shevlin Decl. [78-61] ¶ 10. Their deposition testimony was less confident, however. (See Acosta
Dep. Tr. [82-2], Buenrostro Dep. Tr. [82-3], Garcia Dep. Tr. [82-4], Sanchez Dep. Tr. [82-5],
Shevlin Dep. Tr. [82-6].) Acosta, for example, testified that he did not know what a class
representative is, did not understand the responsibilities of serving as a class representative, and
had not been monitoring the litigation. (Acosta Dep Tr. at 104:7–105:1.) Buenrostro, similarly,
did not know what a class representative meant, and was unaware that she was representing
others in the litigation. (See Buenrostro Dep. Tr. at 135:15–136:12.) Garcia was aware of his
role as a class representative (Garcia Dep. Tr. at 64:5–14), but did not recall reviewing any
documents (including the original and amended complaints) and was unaware of any pending
motions.

(See id. at 59:16–60:3; 63:12–15.)

Sanchez testified that her role as class

This case finds itself in this court by way of the UHH Trust Agreement, which
requires litigation against the Board to be filed in the Northern District of Illinois. (UHH Trust
Agreement [78-5] at UHH046766.)
6

10

representative meant that she “represent[s] herself,” adding that she has obligations to other class
members to “be[] here” and “[s]ay[] the truth,” and has not monitored the litigation. (Sanchez Dep.
at 117:6–15.) Shevlin’s testimony was more satisfying; she demonstrated an understanding of
the role of class representative in her deposition, and affirmed that she had reviewed the amended
complaint. (See Shevlin Dep. Tr. at 112:1–9; 118:6-22.) The Named Plaintiffs all did demonstrate
general knowledge of the claims at issue, reasonably describing the claims as involving unfair
cost allocation between UHH Plan Units. (See Acosta Dep. Tr. at 61:20–62:1 (“My understanding
is that Local 11 pays much more than other locals, and we get less benefits.”); Buenrostro Dep.
Tr. at 136:13–20; Garcia Dep. Tr. at 119:4–19; Sanchez Dep. Tr. at 100:11–22; Pls.’ Excerpts of
Shevlin Dep. Tr. [90-7] at 92:20–93:9.)
II.

Procedural History
Plaintiffs filed their original complaint [1] on March 21, 2022, and, following Judge

Leinenweber’s partial grant [31] of Defendant’s first motion to dismiss [19], filed a first amended
complaint [46] on October 3, 2023. Defendant’s motion to dismiss that amended complaint [49],
was denied [120].
On April 16, 2024, Plaintiffs moved for class certification [76]. They define the proposed
class as including “[a]ll current and former participants in UNITE HERE Health Plan Unit 178 or
Plan Unit 278, who are or were participants in such Plan Units at any point from March 21, 2016,
through the date of judgment in this action.” (Pls.’ Mot [76] at 2.) The motion is now fully briefed.

11

LEGAL STANDARDS
“To be certified, a proposed class must satisfy the requirements of Federal Rule of Civil
Procedure 23(a), as well as one of the three alternatives in Rule 23(b).” Messner v. Northshore
Univ. HealthSystem, 669 F.3d 802, 811 (7th Cir. 2012). Rule 23(a) requires a showing of
numerosity, commonality, typicality, and adequacy of representation. Id. Rule 23(b) describes
three “types” of actions that are appropriate for class certification: where prosecution of separate
actions by individual class members would create a risk of inconsistent adjudications (b(1)(A)) or
dispose of the interests of other class members (b(1)(B)); where the party opposing the class has
acted on grounds that apply generally to the class, and the relief sought is purely injunctive (b(2));
and where the court finds that common questions of law or fact predominate over questions
affecting individual class members (b(3)). See FED. R. CIV. P. 23(b).
“Plaintiffs bear the burden of demonstrating that they meet Rule 23's certification
requirements by a preponderance of the evidence.” Jacks v. DirectSat USA, LLC, 118 F.4th 888,
895 (7th Cir. 2024). In evaluating Plaintiff’s motion, the court need not assume the truth of
Plaintiff’s assertions and is free to “receive evidence and resolve factual disputes as necessary
to decide whether certification is appropriate.” Arwa Chiropractic, P.C. v. Med-Care Diabetic &
Med. Supplies, Inc., 322 F.R.D. 458, 463 (N.D. Ill. 2017) (citing Messner, 669 F.3d at 811). “A
class may only be certified if the trial court is satisfied, after a rigorous analysis, that the
prerequisites for class certification have been met.” Jacks, 118 F.4th at 895 (quoting Bell v. PNC
Bank, Nat’l Ass’n, 800 F.3d 360, 373 (7th Cir. 2015)). As the Seventh Circuit recently reaffirmed
in Jacks, “[m]erits questions may be considered to the extent—but only to the extent—that they
are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied.”
Id. (quoting Bell, 800 F.3d at 376).

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DISCUSSION
I.

Rule 23(a) Requirements
A.

Numerosity

A class may only be certified under Rule 23(a)(1) if “the class is so numerous that joinder
of all members is impracticable.” FED. R. CIV. P. 23(a)(1). “[A] forty-member class is often
regarded as sufficient to meet the numerosity requirement.” Anderson v. Weinert Enters., Inc.,
986 F.3d 773, 777 (7th Cir. 2021) (quoting Orr v. Shicker, 953 F.3d 490, 498 (7th Cir. 2020)).
Here, Plaintiffs propose a class of all individuals who were or are participants of Unit 178
and 278 at any time between March 16, 2016, and the conclusion of this action. They assert that
the putative class consists of at least 7,513 individuals. (Pls.’ Mem. at 8–9.) Plaintiffs arrive at
this number by looking to UHH’s financial dashboards between 2016 and 2023, which detail the
number of participants in Units 178 and 278 for each relevant year. (See O’Donnell Decl. ¶ 51.)
Those dashboards show that the number of Unit 178 and 278 (combined) participants peaked
(within the 2016–2023 period) at the end of the 2019–20 fiscal year (March 2020) with 7,513
participants.

(See UHH 2019-20 Dashboard [78-15] at UHH040147.)

It is reasonable to

conclude, based on this data, that the proposed class will include at least as many individuals as
were Unit 178 and 278 plan participants in March 2020, or 7,513 individuals. This meets Rule
23(a)(1)’s numerosity requirement, and Defendant does not argue otherwise.
B.

Commonality

Rule 23(a)(2) requires a showing that “there are questions of law or fact common to the
class.” FED. R. CIV. P. 23(a)(2). “A court need find only a single common question of law or fact,
but it needs to identify more than the fact that everyone suffered as a result of a violation of the
same provision of law.” Orr, 953 F.3d at 498 (citing Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338,
350 (2011)). The “key to commonality” is “the capacity of a class-wide proceeding to generate
common answers apt to drive the resolution of the litigation.” Id. at 498–99 (quoting Wal-Mart,
564 U.S. at 350). “Where the same conduct or practice by the same defendant gives rise to the
13

same kind of claims from all class members, there is a common question.” Suchanek v. Sturm
Foods, Inc., 764 F.3d 750, 756 (7th Cir. 2014).
Plaintiffs assert that there are a number of questions common to the class, including: (1)
whether Defendant breached its fiduciary duties in granting a discount to Unit 150 for
administrative fees, tending to increase the share of administrative expenses allocated to
Plaintiffs’ Units; (2) whether Defendant breached its fiduciary duties by adopting a policy of
allocating administrative expenses based on contributions; (3) whether UHH’s allocation policies
in fact resulted Units 178 and 278’s bearing a disproportionate share of the financial burden of
paying administrative expenses; and (4) whether UHH’s overall administrative expenses where
unreasonably high, constituting a breach of Defendant’s fiduciary duties. (Pls.’ Mem. at 10.)
Defendant counters that such questions are not common to all class members, as “UHH
determines each employer’s recommended contribution rate through a complex process that
estimates administrative expenses as a percentage of the cost of health benefits.” (Opp. [84] at
3.)

Defendant argues that “determining whether UHH charged too much in administrative

expenses will require analysis of the UHH underwriters’ projected benefit costs for each year for
numerous separate employers or employer groups.” (Id.) But Defendant confuses “whether” with
“how much.” It is true that, in absolute terms, the amount of projected administrative expenses
assigned to each employer is a function of the cost of the benefits, calculated at the employer
category level. See supra pp. 4–5. But the administrative expense factor, which functionally
determines how much administrative expense is allocated to each employer, is not set at the
employer category level; it is set at the Unit level with no distinction between Unit 178 and Unit
278. See id. Whether the shared administrative expense factor set for Units 178 and 278
between March 2016 and present was inflated due to unfair allocation or exorbitant spending is a
question common to all members of the purported class.
Moreover, as Plaintiffs observe, “commonality is quite likely to be satisfied” for fiduciary
breach claims brought under ERISA § 502(a)(2). (Pls.’ Mem. at 9 (quoting In re Schering Plough
14

Corp. ERISA Litig., 589 F.3d 585, 599 n. 11 (3d Cir. 2009).) This is because § 502(a)(2) claims
challenge the Defendant’s actions in managing the plan, which generally consist of standardized
conduct with respect to the various plan members. See, e.g., Brieger v. Tellabs, Inc., 245 F.R.D.
345, 349 (N.D. Ill. 2007) (finding commonality where “defendants' actions and decisions pertaining
to the Plan amount to a common course of conduct vis-à-vis the putative class”). This case is no
exception; 7 Plaintiffs’ claims arise from Defendant’s conduct in managing the fund in ways that
affect all class members similarly. Plaintiffs claim that UHH shifted administrative costs from Unit
150 to other Units and took on more administrative costs than other multiemployer health
insurance plans, as reported by the Department of Labor. Whether this conduct was reasonably
justified or constituted a breach of Defendant’s fiduciary duty are questions that are necessary to
resolving each class member’s potential claim and does not turn on individual facts or
circumstances.
C.

Typicality

Rule 23(a)(3) requires that “claims or defenses of the representative parties are typical of
the claims or defenses of the class.” FED. R. CIV. P. 23(a)(3). “A plaintiff's claim is typical if it
arises from the same event or practice or course of conduct that gives rise to the claims of other
class members and his or her claims are based on the same legal theory.” Keele v. Wexler, 149
F.3d 589, 595 (7th Cir. 1998).

“[T]he requirement is meant to ensure that the named

representative's claims have the same essential characteristics as the claims of the class at
large,” and “some factual variations may not defeat typicality.” Oshana v. Coca–Cola Co., 472
Defendant suggests that the general rule finding commonality in ERISA cases
does not apply here because Plaintiffs’ claims are not typical ERISA claims: in addition to seeking
injunctive relief on behalf of the fund, Plaintiffs seek monetary relief from the fund instead of for
the fund. (Opp. at 2.) It is true that the nature of restitution sought by Plaintiffs is not the typical
§ 502(a)(2) claim—indeed, the kinds of monetary compensation they seek (individualized and out
of the fund) are only available under § 502(a)(3), not § 502(a)(2). See Kenseth v. Dean Health
Plan, Inc., 722 F.3d 869, 880 (7th Cir. 2013). But the general logic of the ERISA cases cited by
Plaintiff applies just as easily to § 502(a)(3) claims; regardless of the relief sought, each class
member’s claims turn on the propriety of Defendant’s course of conduct in making decisions for
the plan as a whole.
7

15

F.3d 506, 514 (7th Cir. 2006) (quotations omitted). While the inquiry is similar to the commonality
inquiry under Rule 23(a)(2), “the commonality inquiry focuses on what characteristics are shared
among the whole class while the typicality inquiry focuses on the desired attributes of the class
representative.” Howard v. Cook Cnty. Sheriff's Off., 989 F.3d 587, 606 (7th Cir. 2021). “[T]he
typicality requirement is liberally construed.” Dennis v. Greatland Home Health Servs., Inc., 591
F. Supp. 3d 320, 328 (N.D. Ill. 2022).
Plaintiffs argue that their claims are typical of the putative class because they arise from
the same actions taken by UHH in projecting and allocating administrative expenses. (Pls.’ Mem.
at 10–11.) They note that “Defendant’s allocation policy does not distinguish between participants
within Plan Units 178 and 278 in any way,” thus “[i]f the allocation scheme is unlawful, it follows
that it had a common effect on all participants in the Plan Units.” (Id.)
Defendant does not contest that claims of the Named Plaintiffs arise from the same
conduct that gives rise to all claims in the putative class. Instead, Defendant raises a scattershot
of arguments against typicality, none of which are persuasive. First, the Board argues that
because of the “complex examination of numerous projections used to estimate target rates for
individual employers of categories of employers,” Plaintiffs cannot show that “the claim of a UHH
participant who works for one employer is typical of the claim of a participant who works for a
different employer.” (Opp. at 5–6.) But Defendant overstates the complexity of UHH’s projection
of administrative expenses. As discussed above, while UHH’s process for arriving at a target
contribution rate for each employer is “complex” in an arithmetic sense, it treats administrative
expenses simply: there is one factor used across all employers in Units 178 and 278. Claims
brought by the Named Plaintiffs are typical of those of all Unit 178 and 278 participants.
Defendant also challenges typicality on the basis that four of the five Named Plaintiffs are
former participants in UHH who do not share an interest in pursuing the prospective relief available
to current participants (Id. at 6.) But Defendant cites no authority for the position that each Named
Plaintiff must be eligible for the identical relief due to all other members of a putative class. On
16

the contrary, courts routinely certify class actions for prospective relief in ERISA cases where a
named plaintiff is a former participant in the plan at issue. See, e.g., Brieger v. Tellabs, Inc., 245
F.R.D. at 350 (finding typicality of named plaintiffs including former participants for injunctive
relief); George v. Kraft Foods Glob., Inc., 251 F.R.D. 338, 345–46 (N.D. Ill. 2008) (same); Smith
v. Aon Corp., 238 F.R.D. 609, 615–16 (N.D. Ill. 2006) (finding former plan participants have
standing to pursue prospective relief on behalf of class). What matters for typicality is that Named
Plaintiffs base their claims in the same conduct as the putative class, on the same theory of breach
of fiduciary duties that represents the claims of the class. See Keele, 149 F.3d at 595. 8
Next, Defendants argue that Named Plaintiffs’ claims are not typical because they “seek
to raid the UHH fund . . . which would harm those class members who still receive health benefits
through UHH.” (Opp. at 6.) As discussed below, the court is sensitive to this concern, but believes
it relates to the adequacy of the Named Plaintiffs, not the typicality of their substantive claims. 9
Defendant then argues that Plaintiffs ignore the distinction between class members who are
subject allocations and those subject to published-rate allocations, suggesting that a class
member subject one form of allocation agreement is not typical of class member who is subject
to another. (Id. at 7.) But whether a class member is allocated exorbitant administrative costs
Though Defendant raises this argument only with respect to typicality, the fit
between the relief sought by the named plaintiff and the relief available to the class is really a
question of adequacy under Rule 23(a)(3). The court recognizes that in Arreola v. Godinez, 546
F.3d 788 (7th Cir. 2008) (a case not cited by Defendant), the Seventh Circuit affirmed the district
court’s ruling that a plaintiff who lacked standing to seek prospective relief was not an adequate
class representative under Rule 23(a)(4) to represent a class seeking an injunction. 546 F.3d at
799. But in that case, the named individual barred from pursuing prospective relief was the only
named plaintiff in the case. Here, there is at least one Named Plaintiff (Buenrostro) who is a
current participant, eligible for prospective relief. Cf. Bhattacharya v. Capgemini N.A., Inc., 324
F.R.D. 353, 364 (N.D. Ill. 2018) (in an ERISA case, court found former employees inadequate to
represent a class seeking prospective relief and refused to “certify [an injunctive relief subclass]
unless and until a new named plaintiff who is a current employee . . . is added to the case.” 324
F.R.D. at 364 (emphasis added).
8

Spano v. The Boeing Co., 633 F.3d 574 (7th Cir. 2011), the case that Defendant cites
as authority for this argument, also discusses a named plaintiff’s requested relief harming other
class members as a problem for adequacy under Rule 23(a)(4), not typicality. See 633 F.3d at
586–87.
9

17

through a published rate or by bucket allocations, their substantive claim under ERISA does not
change—the claim still turns on the propriety of UHH’s administrative spending and cost allocation
standard across the class. Finally, Defendants argue that “[t]he claim of a UHH participant
working for one employer is not typical of the claim [of] a UHH participant working for a separate
employer” because the contribution made by an employer depends on the bargaining agreement
between employer and employee union. (Id.) Not so. UHH treats all employers within Units 178
and 278 equally in projecting administrative costs as a factor of their cost of benefits; as
Defendant’s actions are typical across the putative class, so are the claims.
D.

Adequacy of Representation

Adequacy of representation requires that “the representative parties will fairly and
adequately protect the interests of the class.”

FED. R. CIV. P. 23(a)(4).

“[A]dequacy of

representation is composed of two parts: the adequacy of the named plaintiff's counsel, and the
adequacy of representation provided in protecting the different, separate, and distinct interest of
the class members.” Retired Chicago Police Ass'n v. City of Chicago, 7 F.3d 584, 598 (7th Cir.
1993).
Named Plaintiffs argue that they are adequate to represent the class because they
“suffered the same injury as those of the class” and thus have a “strong interest in establishing
Defendant’s liability and determining whether Defendant violated ERISA.” (Pls.’ Mem. at 11–12.)
Plaintiffs’ counsel has also submitted declarations attesting to their experience in class action and
ERISA litigation. (See generally Weiner Decl. [78-39]; Yokich Decl. [78-40].)
Defendant disputes that the Named Plaintiffs and their counsel are adequate under Rule
23(a)(4). Specifically, Defendant charges that former participants seeking to move money out of
UHH present claims that conflict with those class members who are still receiving benefits through
the fund, that Plaintiffs’ counsel’s representation of Local 11 presents a conflict of interest in
pursuing claims for current UHH participants, and that the Named Plaintiffs lack the requisite

18

knowledge and involvement in the litigation to adequately protect the interests of absent class
members. (See Opp. at 9-11.)
1.

Antagonistic Claims Between Former and Current Participants

Defendant’s first argument against adequacy concerns the relief sought by the Named
Plaintiffs.

As Defendant observes, Plaintiffs seek to “transfer plan assets attributable to

contributions on behalf of Named Plaintiffs and class members to a health plan that currently
provides their benefits.” (Id. at 8; see Am. Compl at 54.) This requested relief, according to
Defendant, is antagonistic to the class members who are still receiving benefits through UHH and
have an interest in the “continued solvency” of the fund. (Opp. at 8.)
As a preliminary point, a transfer of funds out of UHH and into a different health plan would
indeed advantage only those class members who are no longer receiving benefits through UHH.
Should Plaintiffs succeed in proving their entitlement to monetary compensation from Defendant,
current-participant class members will have to be compensated in some other way. Named
Plaintiff’s prayer for relief does not inhibit this court’s “broad discretion to determine the
appropriate remedy for a breach of fiduciary duty” under ERISA. See Mintjal v. Prof. Benefit Tr.,
No. 08-CV-5681, 2018 WL 11353294, at *8 (N.D. Ill. Apr. 23, 2018) (citing Donovan v. Est. of
Fitzsimmons, 778 F.2d 298, 302 (7th Cir. 1985)).
As for the claim that the interests of former class members in moving funds out of UHH is
antagonistic to the interest of current participants, Defendant fails to demonstrate a genuine
conflict of interest between class members. Defendant properly articulates the interests of current
participants of the fund: their interest is in the solvency of the fund, not the level of surplus or
numerical value of assets. Even if the court were to assume that Plaintiffs’ high estimate of
monetary harm of $19,446,307.83 is correct, and further assume that this full amount must be
transferred out of the fund, the amount recovered by Plaintiffs would still be dwarfed by UHH’s

19

$1.26 billion in total assets, as reported to the Department of Labor. 10 UHH’s solvency does not
appear to be at risk even in the event of a fantastical recovery for the Plaintiffs. Absent such risk,
there is no identifiable risk of harm to the current UHH participants, and no conflict for the
purposes of Rule 23(a)(4). Cf. Spano, F.3d at 586–87 (no adequacy of representation where
“some members will actually be harmed by that relief” sought by named plaintiffs); see Neil v. Zell,
275 F.R.D. 256, 265 (N.D. Ill. 2011) (“[T]he conflicting economic interest necessary to render a
representative inadequate must be of the type that, if that plaintiff succeeds, would result in
identifiable harm to some member of the class.”). Moreover, as Plaintiffs rightly observe, it is not
clear which—if any—forms of remedy Plaintiffs will be entitled to recover, in the event they prevail
in this case. 11 Should the circumstances of UHH’s solvency change, or the nature of the action
later give rise to conflicts between class members, the court can create subclasses or require
separate representation to address the new-found conflict. Howard, 989 F.3d at 610 (“If and when
[potential conflicts] become real, the district court can certify subclasses with separate
representation of each.”).
2.

Plaintiffs’ Counsel’s Conflict of Interest

Defendant’s argument that Plaintiffs’ counsel has a conflict of interest because of their
concurrent or past representation of Local 11 fails for similar reasons. The argument goes that

This information is publicly available from UHH’s Form 5500 for the year 2023,
available on the Department of Labor website. See DOL Form 5500 Search.
https://www.efast.dol.gov/5500Search/ (accessed on Jan. 22, 2025). The same form shows Net
Assets of $ 890,708,294, Total Contributions of $ 1,319,888,286, and Net Income of
$ 167,501,644. UHH also reported a total surplus of $ 66,194,379 for fiscal year 2022–23 in its
dashboard. (UHH 2022–23 Dashboard at UHH040198.)
10

The court observes that in ruling on Defendant’s first motion to dismiss, Judge
Leinenweber’s opinion did not resolve the question of whether the monetary compensation sought
by Plaintiffs’ (now amended) complaint qualifies as the kind of “equitable remedy” sanctioned by
ERISA § 502(a)(3). (See Def.’s Mem. in Support of First Mot. to Dismiss; Pls.’ Opp. to First Mot.
to Dismiss.) The parties do not raise this question again in moving and opposing class
certification, but the court will ultimately be required to address it. That the question is unresolved
does not preclude class certification, however, because any argument that money compensation
is not available in this case applies class-wide.
11

20

Local 11 has a “substantial interest in the Santa Monica Fund,” 12 creating a conflict between Local
11 and class members who do not currently receive benefits through the Santa Monica Fund,
which extends to counsel that represents (or has represented) both Local 11 and the members of
the proposed class. (See Opp. at 10–11.) 13 But, for now, this conflict is purely hypothetical—any
interest that Local 11 has in diverting funds to the Santa Monica Fund becomes relevant only
when and if Plaintiffs are found to be entitled to monetary compensation. Until that point, even if
the court accepts unsubstantiated (see Reply [91] at 15) claims of Local 11’s interest in the Santa
Monica Fund, Local 11 has a shared interest in ascertaining Defendant’s ERISA liability. By
certifying this action for only the issues of liability and injunctive relief, but not monetary damages
(as the court ultimately decides to do), Defendant’s alleged conflict between Local 11 and current
UHH plan members will not materialize.
3.

“Figurehead” Plaintiffs

Defendant’s final and most forceful argument against adequacy is that the Named
Plaintiffs have demonstrated insufficient knowledge and involvement in this litigation. (Opp. at 9–
12.) They cite to portions of Plaintiffs’ deposition testimony that suggest poor understanding of
certain terms like “class representative” and a lack of awareness of pending motions or case
documents. See supra pp. 9–10. These admissions, Defendant argues, show that Named
Plaintiffs are mere “figurehead plaintiffs” who have shifted their duties to class counsel. (Opp. at
8 (citing Physicians Healthsource, Inc. v. Allscripts Health Sols., Inc., 254 F. Supp. 3d 1007, 1023
(N.D. Ill. 2017).)
Citing to a web-page listing the Santa Monica Fund Board of Trustees (the link
provided by Defendant no longer appears to work), Defendant notes that the co-President of Local
11 (Kurt Peterson), a former president of Local 11 (Thomas Walsh, also a member of the UHH
Board), and the Local 11 Organizing Director (Austin Lynch) all sit on the Santa Monica Fund’s
Board. (See Def.’s Opp’n at 11 n. 5.)
12

Though the parties have not offered details, the court infers that a past falling-out
between Local 11 and UHH led to Local 11’s receiving benefits from the Santa Monica fund rather
than from UHH, and that Plaintiff’s counsel represented Local 11 in that dispute. Without more
detail, the court declines to find a significant conflict of interest in these circumstances.
13

21

Rule 23(a)(4) requires that a class representative be “sufficiently interested in the outcome
to ensure vigorous advocacy.” Wahl v. Midland Credit Mgt., Inc, 243 F.R.D. 291, 298 (N.D. Ill.
2007). To that end, “[c]ourts have repeatedly emphasized the importance of class representatives
having reviewed court papers prior to filing, answering interrogatories (obviously in a truthful way),
conferring with attorneys about the prosecution of the action, and understanding the facts of the
case.” Pruitt v. Pers. Staffing Grp., LLC, No. 16-CV-5079, 2020 WL 3050330, at *4 (N.D. Ill. June
8, 2020). But it is important not to overstate the burden placed on the class representative.
“Realistically, functionally, practically,” federal courts know from experience that “it is counsel for
the class representative and not the named parties, who direct and manage these actions.”
Culver v. City of Milwaukee, 277 F.3d 908, 913 (7th Cir. 2002) (quoting Greenfield v. Villager
Indus., Inc., 483 F.2d 824, 832 n. 9 (3d Cir.1973)). Rule 23 thus places a “modest burden” on
named plaintiffs “to demonstrate [a]n understanding of the basic facts underlying the claims, some
general knowledge, and a willingness and ability to participate in discovery.” Zollicoffer v. Gold
Stand. Baking, Inc., 335 F.R.D. 126, 160 (N.D. Ill. 2020) (quoting Cavin v. Home Loan Ctr., Inc.,
236 F.R.D. 387, 394 (N.D. Ill. 2006)) (cleaned up). The burden in establishing that the class
representative meets this standard is “not difficult.” Murray v. New Cingular Wireless Svc., Inc.,
232 F.R.D. 295, 300 (N.D. Ill. 2005).
Plaintiffs’ showing in this case was modest at best. In their depositions, Named Plaintiffs,
who attested in their declarations to understanding the term “class representatives,” were unable
to provide a suitable definition in their deposition testimony. And when asked at their depositions
about relevant documents, they could not recall having reviewed them. But this testimony, while
disappointing, does not necessarily disqualify them as adequate class representatives. In T.S. v.
Twentieth Cent. Fox TV, 548 F. Supp. 3d 749 (N.D. Ill. 2021), for example, the court found that
proposed class representatives who could not recall viewing an amended complaint or their own
interrogatory responses were nonetheless adequate because the court was “confident that
counsel understands the need to continue updating [named plaintiffs] about the litigation.” 548 F.
22

Supp. 3d at 802–03, rev’d and remanded on other grounds T. S. v. Cnty. of Cook, Illinois, 67 F.4th
884 (7th Cir. 2023). In In re Ocean Bank, No. 06 C 3515, 2007 WL 1063042 (N.D. Ill. Apr. 9,
2007), the court found that a named plaintiff who was unable to define the term “class
representative” was nonetheless adequate because “[w]hether or not [plaintiff] can define his
duties as class representative, he has demonstrated the ability to fulfill them” by “participat[ing] in
discovery by sitting for a deposition.” 2007 WL 1063042, at *5.
Named Plaintiffs here have similarly demonstrated their adequacy. They have testified at
depositions, maintained communication with counsel, and responded to discovery requests
throughout the nearly three years of litigation. (See Weiner Decl. ¶ 10.) Moreover, in the same
depositions that Defendant cites, each Named Plaintiff demonstrated a clear understanding of
what this case is about, see supra p. 10, explaining how their claims arose from the allocation of
administrative expenses and unfair treatment between different Plan Units. While the court
expects Plaintiffs’ counsel, in the future, to more thoroughly apprise the Named Plaintiffs of their
specific responsibilities and pending motions, the court is satisfied for now that the Named
Plaintiffs have “[a]n understanding of the basic facts underlying the claims, some general
knowledge, and a willingness and ability to participate in discovery” sufficient to meet the
requirements of Rule 23(a)(4). See Zollicoffer, 335 F.R.D. at 160.
II.

Rule 23(b) Requirements
Having found the Rule 23(a) requirements satisfied, the court turns to the question of

whether this action fits under the types of actions described in Rule 23(b). Plaintiffs argue that
certification is warranted under either Rule 23(b)(1) or 23(b)(3). (Pls.’ Mem. at 12–13.) The
practical difference between the 23(b) subsections is that 23(b)(1) does not require that absent
class members be given “the best notice that is practicable under the circumstances” and the
opportunity to opt-out of the class, while 23(b)(3) does. FED. R. CIV. P. 23(c)(2). “A court should
endeavor to select the most appropriate subsection, not just the first linguistically applicable one
in the list.” Jefferson v. Ingersoll Int’l Inc., 195 F.3d 894, 898 (7th Cir. 1999).
23

A.

23(b)(1)

Rule 23(b)(1) allows for certification when prosecuting separate actions would create a
risk of either “(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.” FED. R. CIV. P. 23(b)(1).
As Plaintiffs note, ERISA § 502(a)(2) breach of fiduciary duty claims are commonly certified under
Rule 23(b)(1) because “recovery for a breach of the fiduciary duty owed to an ERISA plan . . . will
inure to the plan as a whole, and because defendant-fiduciaries are entitled to consistent rulings
regarding operation of the plan.” Neil, 275 F.R.D. at 267 (also collecting cases certifying ERISA
breach of fiduciary duty claims under Rule 23(b)(1)). Indeed, such claims have been considered
“paradigmatic examples” of claims that are appropriate for 23(b)(1) certification. See In re Glob.
Crossing Securities and ERISA Litig., 225 F.R.D. 436, 453 (S.D.N.Y. 2004) (quoting Kolar v. Rite
Aid Corp., No. Civ.A. 01–1229, 2003 WL 1257272, at *3 (E.D. Pa. March 11, 2003)).
Insofar as Plaintiffs seek injunctive relief under ERISA § 502(a)(2) preventing Defendant
from taking on excessive administrative expenses and allocating expenses unevenly across plan
units, Rule 23(b)(1)(A) appears to be a strong fit. Requiring each class member to individually
adjudicate the propriety of UHH’s administrative expense policies creates a significant risk that
Defendant may be subject to inconsistent or conflicting judgments. See Neil, 275 F.R.D. at 268.
The court nevertheless hesitates to certify this action under 23(b)(1), however, because
Plaintiffs also seek more individualized compensatory relief under ERISA § 502(a)(3). 14 As
explained in Neil, ERISA § 502(a)(2) claims are so often appropriate for 23(b)(1) certification
In their opposition to Defendant’s first motion to dismiss, responding to the
argument that the monetary relief sought is not available under ERISA, Plaintiffs confirmed that
they seek restitution and a transfer of assets out of the fund as “appropriate equitable relief” under
§ 502(a)(3). (See Pls.’ Opp. to First Mot. to Dismiss [24] at 21.)
14

24

because “in an ERISA action in which relief is being sought on behalf of the plan as a whole (as
it is here), a plaintiff's victory would necessarily settle the issue for all other prospective plaintiffs.”
Id. at 267. All claims brought under § 502(a)(2)—which can only seek relief for “losses to the
plan,” see 29 U.S.C. § 1109—share the characteristic of seeking plan-wide relief and thus are
particularly appropriate for class-wide resolution. See, e.g., Brieger, 245 F.R.D. at 357 (“Plaintiffs
bring their claims on behalf of the Plan as a whole to recover benefits owed under the Plan. Any
recovery of lost benefits will go to the Plan . . . .”); Smith, 238 F.R.D. at 618 (“Monetary relief in a
plan-wide action brought under ERISA section 502 is incidental, and flows from relief to the plan.”)
But this rationale does not extend to claims brought under ERISA § 502(a)(3). “While
section 502(a)(2) claims necessarily involve plan-wide relief, claims under section 502(a)(3) are
not representative in nature.” Rogers v. Baxter Intern. Inc., No. 04 C 6476, 2006 WL 794734, at
*11 (N.D. Ill. Mar. 22, 2006). The restitution and transfer of plan assets that Plaintiffs seek in this
case (see Am. Compl. at 53–54), would not inure to “behalf of the plan as a whole,” but instead
to individual class members who lost wages because of Defendant’s alleged breaches (because,
they contend, dollars bargained for health benefits would otherwise have been available as
wages). Indeed, as Defendant points out, these claims are effectively against the plan, seeking
to draw funds out of UHH and into other health benefit plans. (See Opp. at 13.) Resolution of
any one of these restitution claims will not subject Defendant to conflicting judgments or dispose
of other class members’ claims for monetary compensation—a court may readily find that one
individual can demonstrate that their employer reduced wages to match UHH’s inflated target
contribution rates, while another cannot.
Nor can the monetary compensation sought by Plaintiffs be characterized as “incidental
to the injunctive or declaratory relief.” Cf. Johnson v. Meriter Health Servs. Emp. Ret. Plan, 702
F.3d 364, 369 (7th Cir. 2012) (quoting Wal-Mart, 564 U.S. at 360). Monetary relief is considered
incidental—and thus does not necessitate heightened notice and opt-out measures—when “the
award of monetary relief will just be a matter of . . . computing the employee’s entitlement by
25

subtracting the benefit already credited it to him from the benefit to which the reformed plan
document entitles him.” Id. at 371. The circumstances here are different: the monetary award
the Plaintiffs seek is not the amount they would collectively be due under a reformed plan; they
want compensation for what they would have earned, had the administrative expenses charged
to their employer been reasonable. As the court describes explains below, calculating these
damages will necessarily be individualized, requiring evidence of specific collective bargaining
agreements.
Plaintiffs’ claims here are thus better understood as requests for individual monetary
awards 15, thus properly analyzed under 23(b)(3). See Rogers, 2006 WL 784734, at *12 (“[I]f
Rogers’ section 502(a)(3) claims are to be certified at all, they should be certified under Rule
23(b)(3).”); see also Piazza v. Ebsco Indus., Inc., 273 F.3d 1341, 1353 n. 7 (11th Cir. 2001)
(holding that Plaintiffs’ § 502(a)(2) could only be certified under Rule 23(b)(1), but that separate
suits for individual relief under § 502(a)(3) would be properly certified under Rule 23(b)(3)). After
all, “individualized monetary claims belong in Rule 23(b)(3).” Wal-Mart, 564 U.S. at 362.
Before turning to Rule 23(b)(3), the court briefly considers whether Plaintiffs’ § 502(a)(2)
claims could be separately certified under Rule 23(b)(1) under the “divided certification"
framework described by the Seventh Circuit in Jefferson v. Ingersoll Intern. Inc., 195 F.3d 894
(7th Cir. 1999) and Lemon v. Intl. Union of Operating Eng’rs, Loc. No. 139, AFL-CIO, 216 F.3d
577 (7th Cir. 2000). As explained in those cases, where a putative class seeks both injunctive
relief (generally certified under 23(b)(1) or 23(b)(2)) 16 and monetary damages (appropriately
Indeed, Plaintiffs may obtain such monetary relief under ERISA only if they are
correct in asserting that the restitution they seek qualifies as “make-whole damages,” deemed
equitable in nature by the Seventh Circuit. See Kenseth, 722 F.3d at 882.
15

The putative classes in Lemon and Jefferson technically sought certification only
for their injunctive relief claims under Rule 23(b)(2), which provides for certification when “the
party opposing the class has acted or refused to act on grounds that apply generally to the class,
so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class
as a whole,” FED. R. CIV. P. 23(b)(2), not Rule 23(b)(1). But given that the Seventh Circuit was
16

26

certified under 23(b)(3)), a district court need not certify the whole class under one or the other.
Instead, the district court may “divide certification” by certifying a 23(b)(1) class for equitable relief
and a separate, 23(b)(3) class for damages. See Lemon, 216 F.3d at 581–82 (citing Jefferson,
195 F.3d at 898–99). Neither party requests this solution, and it has several practical drawbacks.
For one, “the Seventh Amendment has been interpreted to entitle a party in a divided-certification
case to demand that the damages claims be tried first, to a jury,” and thus divided certification is
not optimal when “the issues underlying the declaratory and damages claims overlap[],” as they
do here. Johnson, 702 F.3d at 371. Creating separate classes for equitable and monetary relief
will also raise new Rule 23(a) questions as to whether the Named Plaintiffs are adequate to
represent a class seeking only prospective relief. Considering this entire action under Rule
23(b)(3)—an approach also supported by Jefferson and Lemon (see Lemon, 216 F.3d at 581)—
avoids such concerns.
B.

23(b)(3)

Rule 23(b)(3) provides for certification if “the court finds that the questions of law or fact
common to class members predominate over any questions affecting only individual members,
and that a class action is superior to other available methods for fairly and efficiently adjudicating
the controversy.” FED. R. CIV. P. 23(b)(3). Plaintiffs seeking to certify a (b)(3) class must meet
two requirements: the predominance requirement and the superiority requirement.
1.

Predominance

The predominance requirement is met when “common questions represent a significant
aspect of a case and . . . can be resolved for all members of a class in a single adjudication.”
Messner, 669 F.3d at 815 (quotation omitted). A question is a “common question” when “the
same evidence will suffice for each member to make a prima facie showing or the issue is

chiefly concerned with the difference in notice and opt-out requirements between (b)(2) and (b)(3)
classes, see Jefferson, 195 F.3d at 897–98, the cases are relevant to the distinction between
(b)(1) and (b)(3) classes as well.
27

susceptible to generalized, class-wide proof.” Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442,
453 (2016) (quotations omitted).
When determining whether common questions predominate in a particular action, the
Seventh Circuit has directed district courts to “begin the class certification analysis by identifying
the elements of the plaintiff's various claims.” Eddlemon v. Bradley Univ., 65 F.4th 335, 339 (7th
Cir. 2023) (cleaned up) (quoting Simpson v. Dart, 23 F.4th 706, 713 (7th Cir. 2022)). Plaintiffs
here bring breach of fiduciary duty claims under ERISA, requiring a showing “(1) that the
defendant is a plan fiduciary; (2) that the defendant breached its fiduciary duty; and (3) that the
breach resulted in harm to the plaintiff.” Allen v. GreatBanc Tr. Co., 835 F.3d 670, 678 (7th Cir.
2016) (quotations omitted).
Defendant does not dispute that it is UHH’s designated fiduciary. (See Answer to Am.
Compl. [36] ¶ 1.) As for the second element-—whether Defendant breached fiduciary duties by
taking on excessive administrative expenses and allocating disproportionately low administrative
costs to Unit 150—the focus is solely on the Board’s conduct; it is a purely common question.
See Allen, 835 F.3d at 679 (holding that ERISA plaintiffs can prove breach of fiduciary duty claims
by “compar[ing] whatever steps [fiduciary] actually took with the procedures that a prudent
fiduciary would use”).

Any evidence that one class member would submit to show that

Defendant’s actions were imprudent or unreasonable would be sufficient for any other class
member to prove a breach of Defendant’s fiduciary duty. Finally, as to the third element, Plaintiffs
allege a class-wide harm that is similarly susceptible to class-wide proof. They claim that because
they were paying excessive administrative expenses, Plan Units 178 and 278 were unable to use
those funds to improve the benefit options available to the class members. (See Pls.’ Mem. at
14.) Resolving whether UHH’s expense allocation policies in fact reduced the standard of benefits
for Plan Units 178 and 278 is another purely common question across the putative class
members.

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Defendant does not dispute that determining whether its conduct constituted a breach of
fiduciary duties is a purely common question. Instead, Defendant focuses solely on the question
of individualized damages; Defendant urges that, should this court reach the question of monetary
compensation, the inquiry will be highly individualized and unsuitable for class-based resolution.
As Defendant argues, administrative expenses projected for each Unit are based on a percentage
of the cost of benefits by employer-category, and the degree of alleged overcharging depends on
whether a particular employer agrees to a “bucket” or “published-rate” allocation. (Opp. at 4–5;
see also supra p. 3.) Class members compensated (presently or in the past) from bucket
allocations will need to show that every dollar (or a percentage of every dollar) the union
contributed to the fund would otherwise have been paid in wages or employee benefits. Class
members who are part of published rate allocations, on the other hand, would need to show that
every dollar (or percentage of every dollar) contributed by their employer towards the fund would
otherwise be paid in wages or benefits. 17 As Plaintiffs’ submissions in response to Defendant’s
first motion to dismiss show, such evidence is generally found in the collective bargaining
agreement between Local 11 and a specific employer. (See Pls.’ Opp. to First Mot. to Dismiss at
15–17.) Therefore, resolution of whether (and how much) a particular class member is entitled to
money compensation in addition to injunctive relief will require an individual inquiry into the terms
of their employer’s CBA. This suggests that predominance has an identifiable endpoint in this
action—after a determination of whether Defendant breached its fiduciary duties, questions of
monetary compensation will be more individualized.
Plaintiffs, for their part, admit that calculating damages will involve “individualized
questions,” but argue that “aggregate damages” can be resolved on a class-wide basis. (Reply
at 2.)

Specifically, they urge that aggregate damages can be approximated by taking the

Note that even if a class member is unable make such a showing, Defendant could
still be held liable for overcharging the class member’s employer or union with an inflated target
contribution rate, though that overcharging did not result in monetary harm to the class member.
17

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difference between the administrative expenses they were actually allocated and the
administrative expenses they would have been allocated, had they been assigned the same rate
of expenses-per-participant as Unit 150. (See id.) This approach fails for two reasons. First, the
discounted rate of administrative expenses allocated to Unit 150 is not the rate that Unit 178 and
278 “should have paid,” under Plaintiffs’ theory of recovery. Indeed, they contend that Defendant
breached its duty by assigning a rate of administrative expenses to Unit 150 that was unjustifiably
low, forcing other Plan Units to pick up the slack. (See Pls.’ Mem. at 5 (“[T]he Las Vegas Plan
Unit is allocated only one-third of its fair share of these expenses.”).)

Presumably, a fair

distribution would result in participants in all units bearing an equal burden—less costly for Units
178 and 278 but more costly for Unit 150. More fundamentally, what matters for calculating the
monetary harm owed to the class members is the target employer contribution rate, not the actual
allocation of costs at the end of the fiscal year. Employers (in published rate allocations) and
unions (in bucket allocations) negotiate how much to pay into the fund based on the target rates
set by the underwriters, not the actual allocation of administrative expenses at the end of the fiscal
year. See supra p. 3. A proper calculation of what an individual class member is owed in
restitution, therefore, involves comparing what their employer or union actually paid into the fund
compared to what they would have paid, had the administrative expense factor been
reasonable—Plaintiffs have not submitted a formula for how this harm can be readily aggregated.
The fact that individual questions will eventually predominate in this case, should it reach
the point of calculating damages, need not defeat certification under Rule 23(b)(3) at this stage.
Courts are well familiar with class actions “where the defendant's liability can be determined on a
class-wide basis, but aggregate damages cannot be established and there is no common method
for determining individual damages.” See Mullins v. Direct Digital, LLC, 795 F.3d 654, 671 (7th
Cir. 2015).

And “[i]t has long been recognized that the need for individual damages

determinations at this later stage of the litigation does not itself justify the denial of certification.”

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Id. (collecting cases). 18 Rather, “Rule 23 allows district courts to devise imaginative solutions to
problems created by the presence in a class action litigation of individual damages issues.”
Carnegie v. Household Intern., Inc., 376 F.3d 656, 661 (7th Cir. 2004). Indeed, “[a] district court
has the discretion to split a case by certifying a class for some issues, but not others, or by
certifying a class for liability alone where damages or causation may require individualized
assessments.” Pella Corp. v. Saltzman, 606 F.3d 391, 394 (7th Cir. 2010); see also FED. R. CIV.
P. 23(c)(4) (“When appropriate, an action may be brought or maintained as a class action with
respect to particular issues.”).

Courts often address problems with individualized damage

calculations by “bifurcat[ing[ the case into a liability phase and a damages phase.” Mullins, 795
F.3d at 671.

That approach is appropriate here, where common questions predominate over

questions of liability but subside over questions of damages. In these circumstances, “a class
action limited to determining liability on a class-wide basis, with separate hearings to determine—
if liability is established—the damages of individual class members, or homogeneous groups of

Defendant quotes Thomas v. GEICO, No. 20 C 04306, 2024 WL 1075151, at *6
(N.D. Ill. Mar. 12, 2024) for the assertion that “plaintiffs must show their damages model is capable
of measurement on a class wide basis” for 23(b)(3) certification. (Opp. at 14.) The district court
in Thomas based this conclusion on Comcast Corp. v. Behrend, 569 U.S. 27 (2013). In that case,
the Court held that certification was improper where plaintiffs’ model for calculating class damages
“failed to measure damages resulting from the particular antitrust injury on which petitioners'
liability in this action is premised.” 569 U.S. at 35–36.
The Seventh Circuit, however, has interpreted Comcast more narrowly than Defendant
suggests. In Butler v. Sears, Roebuck and Co., 727 F.3d 796 (7th Cir. 2013), the court explained
that Comcast “holds that a damages suit cannot be certified to proceed as a class action unless
the damages sought are the result of the class-wide injury that the suit alleges.” 727 F.3d at 799.
The Seventh Circuit clarified that Comcast does not bar class certification when “there is no
possibility[] that damages could be attributed to acts of the defendants that are not challenged on
a class-wide basis.” Id. at 800. In other words, Comcast does not require that a putative class
be able to measure class-wide damages, so long as the class can show that any asserted
damages flowed from the same class-wide injury. Here, even if Plaintiffs cannot calculate classwide damages, there is no doubt that the lost wages asserted by the class resulted from
Defendant’s challenged conduct.
18

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class members, is permitted by Rule 23(c)(4) and will often be the sensible way to proceed.”
Butler, 727 F.3d at 800. 19
In light of this guidance from the Seventh Circuit, the court finds that the following issues
in this action meet the predominance requirement and can be properly certified under Rule
23(b)(3): (1) whether Defendant took on exorbitant administrative expenses relative to the
standard of care provided to participants, constituting a breach of its fiduciary duty; (2) whether
Defendant weighted contributions from Unit 150 at 33% in allocating shared administrative costs,
constituting a breach of its fiduciary duty; and (3) what, if any, injunctive relief is appropriate.
2.

Superiority

“The superiority inquiry requires courts to assess the fairness and efficiency of class
adjudication ‘with an eye toward other available methods.’” Quinn v. Specialized Loan Servicing,
LLC, 331 F.R.D. 126, 133 (N.D. Ill. 2019) (quoting Mullins, 795 F.3d at 664) (internal quotation
omitted). Rule 23(b)(3) explicitly mentions four factors relevant to superiority, including:
(A) the class members' interests in individually controlling the prosecution or
defense of separate actions; (B) the extent and nature of any litigation
concerning the controversy already begun by or against class members; (C)
the desirability or undesirability of concentrating the litigation of the claims in
the particular forum; and (D) the likely difficulties in managing a class action.
FED. R. CIV. P. 23(b)(3)(A–D). For the issues that the court has previously determined are
appropriate for class resolution (liability and injunctive relief), Plaintiffs have met their burden of
showing that a class action is superior. First, because the putative class challenges actions taken
by Defendant that apply across the fund, the effect of the alleged breach is spread across the

In determining how the allocation of excessive administrative expenses damaged
an individual class member, it may turn out that certain class members do not have claims to
compensatory monetary relief—if, for example, their wages were set or determined before the
UHH created the target contribution rate—but that can easily be accounted for after certification.
See Pella, 606 F.3d at 394 (“While it is almost inevitable that a class will include some people
who have not been injured by the defendant's conduct . . . this possibility does not preclude class
certification.); see also Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 757 (7th Cir. 2014) (“If the
court thought that no class can be certified until proof exists that every member has been harmed,
it was wrong.”)
19

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fund, and no individual participant has a significant interest in pursuing these claims. Second,
Plaintiffs’ counsel has attested that there is no other lawsuit against UHH alleging the same
violation of ERISA. (O’Donnell Decl. ¶ 76.) Third, this forum is a particularly desirable forum to
manage litigation of these claims because UHH’s Trust Agreement requires litigation in the
Northern District of Illinois. (UHH Trust Agreement at UHH046766.) Finally, there are no reasons
to think that this class will be hard to manage. In fact, the class is defined by Plan Units that share
similar geography (Los Angeles, Orange County, Long Beach) in addition to current or former
representation by Local 11. Defendant does not challenge superiority in its submissions.
CONCLUSION
Plaintiffs’ motion for class certification is granted [76, 78] as explained in this order. The
court hereby certifies a class composed of all current and former participants in UNITE HERE
Health Plan Unit 178 or Plan Unit 278, who are or were participants in such Plan Units at any
point from March 21, 2016, through the date of judgment in this action. Under this court’s authority
under Federal Rule of Procedure 23(c)(4), the class is certified for the following issues:
1. Whether Defendant had a policy of discounting contributions from Las
Vegas Unit 150 by 66% in allocating administrative expenses, and
whether such policy was a breach of Defendant’s fiduciary duties under
ERISA, 29 U.S.C. ch. 18.
2. Whether Defendant took on administrative costs that were significantly
greater than those of similar health benefit plan, and whether such
conduct was a breach of Defendant’s fiduciary duties under ERISA, 29
U.S.C. ch. 18.
3. Whether members of the class are entitled to injunctive relief.
The parties are directed to meet and confer to propose a form of class notice, see FED. R. CIV. P.
23(c)(2)(B), to be presented at a video status hearing on April 24, 2025 at 11:00 a.m.
ENTER:

Dated: March 31, 2025

_________________________________________
REBECCA R. PALLMEYER
United States District Judge
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