Davidson v. Henkel Corporation et al

Filing 114

OPINION AND ORDER GRANTING PLAINTIFFS MOTION FOR CLASS CERTIFICATION, APPOINTMENT OF CLASS COUNSEL, AND APPOINTMENT OF JOHN B. DAVIDSON AS CLASS REPRESENTATIVE [#92]. Signed by District Judge Gershwin A. Drain. (Bankston, T)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
JOHN B. DAVIDSON,
Plaintiff,
Case No. 12-cv-14103
Honorable Gershwin A. Drain
v.

HENKEL CORPORATION,
HENKEL OF AMERICA. INC., et al.,
Defendants.
/
OPINION AND ORDER GRANTING PLAINTIFF’S MOTION FOR CLASS
CERTIFICATION, APPOINTMENT OF CLASS COUNSEL, AND
APPOINTMENT OF JOHN B. DAVIDSON
AS CLASS REPRESENTATIVE [#92]
I. INTRODUCTION
On September 14, 2012, Plaintiff, John B. Davidson, filed the instant class action
Complaint, pursuant to the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq.
(“ERISA”), against Defendants, Henkel Corporation, Henkel of America, Inc., and Henkel
Corporation Deferred Compensation and Supplemental Retirement Plan (collectively
“Defendants”), asserting that Defendants failed to follow the Internal Revenue Code’s (“IRC”)
special timing rule for the withholding of Federal Income Contributions Act (“FICA”) taxes on
vested deferred compensation. Plaintiff seeks certification of all those affected by Defendants’
alleged error who participated in nonqualified retirement plans and who retired before January 1,
2007. Plaintiff estimates that this class includes 49 members.
Presently before the Court is Plaintiff’s Motion for Class Certification, Appointment of
Class Counsel, and Appointment of John B. Davidson as Class Representative [#92] filed on July
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21, 2014. This matter is fully briefed and a hearing was held on September 24, 2014. For the
reasons that follow, the Court will grant Plaintiff’s Motion for Class Certification, Appointment
of Class Counsel, and Appointment of John B. Davidson as Class Representative.
II. FACTUAL BACKGROUND
Plaintiff began working for Henkel Corporation in 1972.

During his employment,

Plaintiff and the proposed class participated in Defendants’ available retirement programs, which
included the Henkel Corporation Deferred Compensation and Supplemental Retirement and
Investment Plan (the “Plan”): a nonqualified retirement plan maintained pursuant to the IRC, and
known as a “top-hat” plan within the meaning of ERISA.
The Plan was designed to provide a supplemental retirement benefit for a select group of
management or highly compensated employees by permitting participants to defer a portion of
compensation not taken into account under the normal Henkel Corporation Retirement Plan. See
Pl.’s Ex. C at 2. The Plan lowered the amount of tax paid by the employees on their
compensation by deferring the employees’ compensation until retirement when the employees
would be paid supplemental benefits in a lower income tax bracket. Id. at 8, 17-18.
Prior to his retirement, Plaintiff discussed his options for retirement with the Plan
administrator, including benefit and tax calculations. Relying on the Plan administrator’s
representations, Plaintiff decided to retire on August 1, 2003, and began receiving his monthly
supplemental benefit under the Plan.
On September 19, 2011, Plaintiff and the proposed class members received a letter from
the Director of Benefits at Henkel Corporation, advising that:
During recent compliance reviews performed by an independent consulting firm, it was
determined that Social Security FICA payroll taxes associated with your nonqualified
retirement benefits have not been properly withheld.

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*
*
*
At the time of your retirement, FICA taxes were payable on the present value of all future
non-qualified retirement payments. Therefore, you are subject to FICA Taxes on your
non-qualified retirement payments on a “pay as you go” basis for 2008 and beyond,
which are the tax years that are still considered “open” for retroactive payment purposes.
Pl.’s Ex. H.

In the letter, Defendants also informed Plaintiff and the proposed class that

Defendants: (1) consulted with the IRS Chief Counsel’s office to determine the best approach;
(2) remitted the full payment of FICA tax owed to the IRS owed on behalf of Plaintiff and
potential class members by July 31, 2011; (3) did not deduct the entire amount owed for FICA
taxes from the retirees’ accounts, and instead reimbursed themselves by reducing the retirees’
monthly benefit payments for a twelve to eighteen month period; and (4) planned to adjust
participants’ monthly payments under the Plan, effective January of 2012. Id.
Plaintiff contacted Defendants to challenge the change to his benefits and received the
following response from Defendants on October 14, 2011:
Yes, at the time you commenced receipt of this benefit, Henkel should have applied
FICA tax to the present value of your nonqualified pension benefit.
Yes, this applies to the non-qualified benefit only.
No, this benefit comes from the Henkel Corporation Supplement Retirement Plan
payment. This is the restoration plan which provides benefits similar to the qualified plan,
but on compensation that exceed IRS limits for qualified plans.
Pl.’s Ex. K. On September 14, 2012, Plaintiff, John B. Davidson, filed the instant class action
Complaint [#1]. On November 16, 2012, Defendants moved to dismiss Plaintiff’s Complaint
[#10]. On July 24, 2013, this Court denied Defendants’ Motion to Dismiss in part, finding that
Plaintiff had stated two cognizable claims for a civil enforcement action and an equitable
estoppel claim brought pursuant to ERISA § 502(a).
Plaintiff filed this Motion for Class Certification, Appointment of Class Counsel, and
Appointment of John B. Davidson as Class Representative [#92] on July 21, 2014. During
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discovery, Defendants identified 49 individuals as members of a potential group - including
plaintiff - who were potentially affected by the change in FICA treatment of supplemental
benefits. See Pl.’s Ex. F, Supplemental Response to Interr. #9; Pl.’s Ex. G, 3/13/14 Letter and
Spreadsheet. During discovery a representative of Defendants also stated that the 48 other
retirees who retired before January 1, 2007 and participated in the Plan were treated the same
way as Mr. Davidson. See Pl.’s Ex. E at 104, Kingma Tr.; see also id. at 82, 103, 105, 115.
Because the members of the proposed class retired before January 1, 2007, Defendants
were unable to retroactively implement FICA treatment on a lump-sum basis for the group. See
Pl.’s Ex. F, Supplemental Response to Interr. #9. Accordingly, the proposed class of 49 retirees
was unable to pay FICA tax based upon a lump sum violation of the valuation of the
nonqualified benefit at the time of retirement, and now pay FICA tax on their monthly
supplemental benefit payments on a “pay as you go” method. Id.
Plaintiff alleges that Defendants engaged in a common course of conduct applicable to
these individuals by failing to meet its obligations and comply with the tax regulations and Plan
documents. Plaintiff’s Brief [#92] (“Pl.’s Brief”) at 3. According to Plaintiff, this failure to
properly and timely determine FICA liability for the retirement benefits payable under the Plan
will result in the wrongful reduction of thousands of dollars in retirement benefits for the
affected individuals over the course of their lifetimes, and leave these individuals with no
recourse for a tax refund. Id. at 8.
Accordingly, Plaintiff seeks to certify a class consisting of the 49 individuals who
participated in the Plan and retired before January 1, 2007. Plaintiff contends that the proposed
class is now required to pay FICA taxes each year on benefit payments from the Plan, as opposed

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to receiving the benefit of the IRC’s non-duplication rule and paying FICA taxes once on the
entire amount of deferred compensation. Specifically, Plaintiff defines the proposed class as:
[A]ll persons who retired from Henkel with vested nonqualified retirement benefits (or
their surviving spouses) who were subject to Defendants’ Error in failing to timely and
correctly determine FICA taxes and apply the Special Timing and Non-duplication Rules
at the time of retirement to vested benefits and whose benefits were reduced by the
“correction” of the error imposed by Henkel.
Pl.’s Brief at 25. Further, Plaintiff requests this Court appoint Plaintiff as Class Representative,
and appoint The Miller Law Firm, P.C. as Class Counsel.
III. LAW & ANALYSIS
A.

Standard of Review
1. Requirements for Class Certification
“Class certification is governed by Federal Rule of Civil Procedure 23.” Wal-Mart Stores,

Inc. v. Dukes, 131 S. Ct. 2541, 2548 (2011). This “trial court has broad discretion in deciding
whether to certify a class, but that discretion must be exercised within the framework of Rule
23.” In re American Medical Sys., Inc., 75 F.3d 1069, 1079 (6th Cir. 1996); see also Pilgrim v.
Universal Health Card, LLC, 660 F.3d 943, 946 (6th Cir. 2011).
“Rule 23 does not set forth a mere pleading standard. A party seeking class certification
must affirmatively demonstrate his compliance with the Rule – that is, he must be prepared to
prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc.”
Dukes, 131 S. Ct. at 2551. In the Sixth Circuit:
Mere repetition of the language of Rule 23(a) is not sufficient. There must be an adequate
statement of the basic facts to indicate that each requirement of the rule is fulfilled.
Maintainability may be determined by the court on the basis of the pleadings, if sufficient
facts are set forth, but ordinarily the determination should be predicated on more
information than the pleadings will provide . . . The parties should be afforded an
opportunity to present evidence on the maintainability of the class action.”

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In re American Medical Sys., 75 F.3d at 1079 (quoting Weathers v. Peters Realty Corp., 499
F.2d 1197, 1200 (6th Cir. 1974)).
At times, the Supreme Court has recognized that it may be necessary for the court to
“probe behind the pleadings before coming to rest on the certification question.” Dukes, 131 S.
Ct at 2552. Further the Court has recognized that certification is proper only if the trial court is
satisfied, after a “rigorous analysis,” that the prerequisites of Rule 23(a) have been satisfied. Id.
(emphasis added). “Frequently that ‘rigorous analysis’ will entail some overlap with the merits
of the plaintiff’s underlying claim. That cannot be helped.” Id. Going beyond the pleadings is
necessary because a court must understand the claims, defenses, relevant facts, and applicable
substantive law in order to make a meaningful determination of the certification issues. Reeb v.
Ohio Dept. of Rehabilitation and Correction, 435 F.3d 639, 644-45 (6th Cir. 2006).
Thus, “[t]o obtain class certification, a claimant must satisfy two sets of requirements: (1)
each of the four prerequisites under Rule 23(a), and (2) the prerequisites of one of the three types
of class actions provided for by Rule 23(b). A failure on either front dooms the class.” Pilgrim,
60 F.3d at 946 (emphasis added). The party seeking class certification bears the burden of
demonstrating that all prerequisites for class certification have been satisfied. In re American
Medical Sys, 75 F.3d at 1079. “Given the huge amount of judicial resources expended by class
actions, particular care in their issuance is required.” Pipefitters Local 636 Ins. Fund v. Blue
Cross Blue Shield of Michigan, 654 F.3d 618, 630 (6th Cir. 2011).
a. Rule 23(a) Requirements
Pursuant to Rule 23(a), the party seeking certification must demonstrate, first, that: (1)
the class is so numerous that joinder of all members is impracticable (“numerosity”); (2) there
are questions of law or fact common to the class (“commonality”); (3) the claims or defenses of

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the representative parties are typical of the claims or defenses of the class (“typicality”), and (4)
the representative parties will fairly and adequately protect the interests of the class (“adequacy
of representation”). See Fed. R. Civ. P. 23(a)(1)-(4).
b. Rule 23(b) Requirements
If the party seeking certification demonstrates that the requirements of Rule 23(a) have
been met, the Court must next consider whether one of the three requirements in Rule 23(b) has
been met. Here, Plaintiffs assert that the requirements of Rule 23(b)(3) have been met.
The Rule 23(b)(3) “parallels subdivision (a)(2) in that both require that common
questions exist, but subdivision (b)(3) contains the more stringent requirement that common
issues ‘predominate’ over individual issues.” In re American Medical Sys., 75 F.3d at 1084
(explaining the “predominance” requirement). Specifically, “Rule 23(b)(3) states that a class
may be maintained where ‘questions of law or fact common to class members predominate over
any questions affecting only individual members,’ and a class action would be ‘superior to other
available methods for fairly and efficiently adjudicating the controversy.’” Dukes., 131 S. Ct. at
2549 n.2 ( explaining the “superiority” requirement).1
2. Requirements for Appointment of Class Counsel
If the Court certifies a class, it must also appoint class counsel. Fed. R. Civ. P. 23(g)(1).
Thus, it is appropriate not only to examine whether the class and its representative are adequate,
but to examine the adequacy of the proposed class counsel as well.

1

With respect to the superiority requirement, Rule 23(b) provides that “matters pertinent to these findings” include:
“(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).

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B.

Legal Analysis
Plaintiff’s arguments for class certification pursuant to the requirements of Rule 23, and

Defendants’ arguments in opposition are addressed herein.
1. Sufficiency of Specificity of Plaintiff’s Motion
Defendants first assert that Plaintiff’s proposed class is insufficient because they assert
Plaintiff failed to meet the implicit requirements of Rule 23. Specifically, Defendants argue that
Plaintiff (1) did not define the class with sufficient specificity, and (2) failed to identify the
claims that he sought to bring on a class basis. These arguments are addressed in turn.
a. Specificity of Class Identified by Plaintiff
There is an implicit requirement that “[b]efore a court may certify a class pursuant to
Rule 23,” the class definition must be “sufficiently definite so that it is administratively feasible
for the court to determine whether a particular individual is a member of the proposed class.”
Young v. Nationwide Mut. Ins. Co., 693 F.3d 532, 537-38 (6th Cir. 2012) (internal citations
omitted); see also 7A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice
and Procedure § 1760 (3d ed. 2010).
In order to be definite, “[a] class must not only exist,” but the class must also “be
susceptible of precise definition.” Young, 693 F.3d at 538 (citing 5 James W. Moore et al.,
Moore's Federal Practice § 23.21[1] (Matthew Bender 3d ed. 1997)). In this Circuit, “[t]here can
be no class action if the proposed class is ‘amorphous' or ‘imprecise.’” Id. The Sixth Circuit has
defined permissible defining criteria as follows:
For a class to be sufficiently defined, the court must be able to resolve the question of
whether class members are included or excluded from the class by reference to objective
criteria. In some circumstances, a reference to damages or injuries caused by particular
wrongful actions taken by the defendants will be sufficiently objective criterion for
proper inclusion in a class definition. Similarly, a reference to fixed, geographic

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boundaries will generally be sufficiently objective for proper inclusion in a class
definition.
Young, 693 F.3d at 538-539 (citing Moore's Federal Practice § 23.21[3] (citations omitted)).This
Court has found that “a class definition should be based on objective criteria so that class
members may be identified without individualized fact finding.” In re OnStar Contract Litig.,
278 F.R.D. 352, 373 (E.D. Mich. 2011) (citations omitted).
Defendants contend that Plaintiff has not defined his proposed class in such a way that
the Court can unambiguously determine who is and is not a member. Defendants’ Response
[#100] (“Defs.’ Response”) at 8. Defendants’ argue that Plaintiff’s proposed class is imprecise
because it is defined by merits inquiries and disputed issues at the heart of the case, which are, in
turn, dependent upon a variety of individual determinations by the Court. Id. at 9. To the
contrary, Plaintiff emphasizes that the proposed class is precise and reiterates that it entails a
subset of retirees who have been subjected to the same course of conduct by the Defendants.
Plaintiff’s Reply Brief [#109] (“Pl.’s Reply”) at 1.
The Court agrees with Plaintiff. Defendants’ argument appears to parallel the argument
made by the Defendants’ in Young, where the Young Defendants argued that the proposed class
in that case was not administratively feasible because it would require the court to take part in
impermissible merits inquiries and require a significant number of individual determinations.
Here, as the court in Young also found, “Defendants' argument is less a question of violating the
limitation on merits inquiries and more related to fulfilling the requirement that a class
description must be sufficiently definite so that it is administratively feasible for the court to
determine whether a particular individual is a member.” Young, 693 F.3d at 538.
Defendants’ argument regarding merits inquiries is unpersuasive as they argue that the
Plaintiff’s proposed class turns on at least the four following disputed issues:
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




What was “Defendants’ Error”;
Who was subject to the “correction”;
Whose benefits were “reduced”; and
Who are the individuals for whom Henkel “fail[ed] to timely and correctly determine
FICA taxes and apply the Special Timing and Non-duplication Rules.”

Defs.’ Response at 9-10. The Defendants’ argue that these facts are disputed; however, the
briefs and arguments put forth by both parties indicate otherwise, and, more importantly, provide
the requisite objective criteria to define the class.
For example, Defendants’ dispute that their application of the timing rules amount to an
error on their part to timely and correctly determine FICA taxes. Defs.’ Response at 10.
However, the letter sent by Henkel on September 15, 2011, specifically stated that FICA Payroll
taxes associated with the proposed class’s “non-qualified retirement benefits” had “not been
properly withheld,” and that Henkel took actions “[t]o correct the matter” for members of the
proposed class. See Pl.’s Ex. H (emphasis added). Accordingly, per Defendants’ letter, wrongful
conduct occurred, as the taxes were withheld improperly and actions were taken to correct the
matter.
Defendants’ also imply that it is unclear who would make up Plaintiff’s proposed class;
however, it was the Defendants who identified the 49 individuals - including plaintiff potentially affected by the change in FICA treatment of supplemental benefits. See Pl.’s Ex. F,
Supplemental Response to Interr. #9; Pl.’s Ex. G, 3/13/14 Letter and Spreadsheet. A
representative of Defendants solidified the notion that the proposed class received the same
treatment during discovery when he indicated that the 48 other retirees who retired before
January 1, 2007 were treated the same way as Mr. Davidson. See Pl.’s Ex. E, Kingma Tr. 104;
see also id. at 82, 103, 105, 115.

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Accordingly, the Court possesses “a reference to damages or injuries caused by particular
wrongful actions taken by the defendants” that “will be sufficiently objective criterion for proper
inclusion in a class definition.” Young, 693 F.3d at 538-539 (citing Moore's Federal Practice §
23.21[3] (citations omitted)). Contrary to the claims of Defendants, it is indeed possible for the
Court to determine whether an individual is a member of Plaintiff’s proposed class.

By

addressing objective factors, such as the letter sent by the Defendants, and the detailed charts
provided by Defendants, this Court is able to properly identify each of the 49 members in the
proposed class.
b. Claims Identified by Plaintiff
Rule 7(b) of the Federal Rules of Civil Procedure dictates that a request for a court order
must be made by a motion stating “with particularity the grounds for seeking the order.” Fed. R.
Civ. P. 7(b)(1)(B). The Sixth Circuit construes Rule 7(b)(1)’s requirement for particularity
“liberally.” See Intera Corp. v. Henderson, 428 F.3d 605, 613 (6th Cir. 2005) (citing Harkins v.
Ford Motor Co., 437 F.2d 276, 276 n.1 (3rd Cir. 1970) (noting that as a general matter, courts
have liberally interpreted Rule 7(b)(1)'s requirement that a motion “state with particularity the
grounds therefor[.]”) (citations omitted)).
Defendants argue that the Court should reject Plaintiff’s motion because they assert
Plaintiff made no attempt to distinguish how his two remaining claims can both be certified, or
even whether he meant to ask the Court to certify both as class claims. Defs.’ Response at 1011. To the contrary, however, Plaintiff did specify the claims for which he seeks certification by
stating: “Here, Plaintiff will proceed to a bench trial before the Court under a single common
theory of liability and damages (civil enforcement provisions of ERISA and claims of equitable
estoppel), based on a common set of facts.” Pl.’s Brief at 23.

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Defendants briefly argue that the estoppel claim is unsuitable for class treatment. This
argument will be addressed below, but does not appear to affect the pleading standard.
Accordingly, Plaintiff’s pleading appears to satisfy the liberal particularity requirement of Rule
7(b) as the Plaintiff did, in fact, indicate that he wished to certify both claims.
2. Numerosity
Rule 23(a)(1) of the Federal Rules of Civil Procedure requires that the class be “so
numerous that joinder of all members is impracticable.” Fed. R. Civ. P. 23(a)(1). Although
“[t]here is no strict numerical test for determining impracticability of joinder,” In re Am. Med.
Sys., Inc., 75 F.3d at 1079, “[t]he numerosity requirement requires examination of the specific
facts of each case and imposes no absolute limitations.” Gen. Tel. Co. v. Equal Emp't
Opportunity Comm'n, 446 U.S. 318, 330, 100 S. Ct. 1698, 64 L.Ed.2d 319 (1980).
Both the Sixth Circuit and the Eastern District of Michigan have certified classes of 35
employees. See Afro Am. Patrolmen’s League v. Duck, 503 F. 2d 294, 298 (6th Cir. 1974);
Exclusively Cats Veterinary Hosp. v. Anesthetic Vaporizer Serv., Inc., 2010 WL 5439737 at *3
(E.D. Mich. 2010). Nevertheless, “[t]here is no bright line numerical test by which the district
court can determine when the numerosity requirement is satisfied, and the Sixth Circuit has
noted that a class action does not require any specific number of members: ‘Impracticability of
joinder is not determined according to a strict numerical test but upon the circumstances
surrounding the case.’ ” Bovee v. Coopers & Lybrand, 216 F.R.D. 596, 607-08 (S.D. Ohio 2003)
(citing Senter v. General Motors Corp., 532 F.2d 511, 523 n.24 (6th Cir. 1976)); see also Hoving
v. Lawyers Title Ins. Co., 256 F.R.D. 555, 563 (E.D. Mich. 2009) (citing Beattie v. CenturyTel,
Inc., 234 F.R.D. 160, 167 (E.D. Mich. 2006) aff'd and remanded, 511 F.3d 554 (6th Cir.2007))
(“The Court ‘may consider many factors, including “class size, ease of identification of members

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of the proposed class . . . geographic dispersion of class members, and whether proposed
members of the class will be able to pursue remedies on an individual basis.” ’ ”).
Even though other factors may be considered, the Sixth Circuit has distinctly emphasized
that “[w]hen class size reaches substantial proportions, ... the impracticability requirement is
usually satisfied by the numbers alone.” In re Am. Med. Sys., Inc., 75 F.3d at 1079. The modern
trend for meeting the numerosity factor is to require at a minimum “between 21 and 40" class
members. See Rodriguez v. Berrybrook Farms, Inc., 672 F.Supp. 1009, 1013 (W.D. Mich. 1987);
see also Roman v. Korson, 152 F.R.D. 101, 105-06 (W.D. Mich. 1993). This Court has found
that “[a]lthough not an absolute rule, it generally is accepted that a class of 40 or more members
is sufficient to satisfy the numerosity requirement.” Crawford v. TRW Auto. U.S. LLC, 06-14276,
2007 WL 851627 at *3 (E.D. Mich. Mar. 21, 2007) (citations omitted).
Here, Plaintiff argues that the proposed class consists of the 49 individuals specified by
Defendants. Furthermore, in a sweeping manner, Plaintiff asserts that the proposed class is
located in diverse geographical locations throughout the United States, satisfies all generally
accepted numerosity guidelines, and is sufficiently numerous and geographically diverse that
joinder is impossible. Pl.’s Brief at 13.
Defendants focus on the fact that there is no bright line numerical test for determining the
practicability of joinder, and argue that Plaintiff does not meet the numerosity requirement for
either of his claims because he only points to the size of the putative class to support a finding of
numerosity. Defendants cite a plethora of authority from the Southern District of New York in
support of their position. According to Defendants, “if the Court looks to other factors, as it
should, it will find that joinder is not impracticable.” Defs.’ Response at 15.

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While Defendants put forth a compelling argument, it appears they are mistaken in their
assertion that this Court is required to give other factors more weight than the 49 members. As
an initial matter, it appears that the arguments advanced by Defendants appear more suitable for
arguing against Plaintiff’s satisfaction of Rule 23(b)’s superiority requirement – discussed below
– than the numerosity requirement of Rule 23(a). Second, while the Southern District of New
York may place more weight on factors such as the potential class members’ interest in the
lawsuit, and the ability of class members to institute their own individual suits, the precedent of
this Court is clear in stating that the Court MAY – not must - consider these other factors.
In this Circuit, the precedent is more definite with regard to the fact that it generally is
accepted that a class of 40 or more members is sufficient for satisfying the numerosity
requirement. See, e.g., In re Am. Med. Sys., Inc., 75 F.3d at 1079; Rodriguez, 672 F. Supp. at
1013; Crawford, 2007 WL 851627 at *3. Here, Plaintiff has identified 49 proposed class
members, and, accordingly, this Court finds that Rule 23(a)'s numerosity requirement is satisfied.
3. Commonality, Typicality & Adequacy of Representation
The commonality requirement of Rule 23(a) requires Plaintiff to show that “there are
questions of law or fact common to the issue.” Fed. R. Civ. P 23(a)(2). A common question of
law or fact will suffice. See Powers v. Hamilton Cnty. Pub. Defender Comm’n, 501 F.3d 592,
619 (6th Cir. 2007); Reese v. CNH America LLC, 227 F.R.D. 483, 487 (E.D. Mich. 2005).
However, Plaintiff is also required to “show that class members have suffered the same injury.”
In re Whirlpool Corp. Front-Loading Washer Products Liab. Litig., 722 F.3d 838, 852 (6th Cir.
2013) cert. denied, 134 S. Ct. 1277, 188 L. Ed. 2d 298 (U.S. 2014) (citing Dukes, 131 S. Ct. at
2551). Thus, Plaintiff’s “ ‘claims must depend upon a common contention ... of such a nature
that it is capable of classwide resolution—which means that determination of its truth or falsity

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will resolve an issue that is central to the validity of each one of the claims in one stroke.’ ” Id.
(quoting Dukes, 131 S.Ct. at 2551).
The commonality inquiry “focuses on whether a class action will generate common
answers that are likely to drive resolution of the lawsuit.” Id. (citing Dukes, 131 S. Ct. at 2551);
see also Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410, 422 (6th Cir. 1998) (“The interests
and claims of the various plaintiffs need not be identical. Rather, the commonality test is met
when there is at least one issue whose resolution will affect all or a significant number of the
putative class members.”); Sprague v. Gen. Motors Corp., 133 F.3d 388, 397 (6th Cir. 1998)
(finding that a common question satisfies the commonality test only if it advances the litigation).
However, commonality is lacking if the plaintiff’s claim depends “upon facts and circumstance
peculiar to that plaintiff.” Sprague, 133 F.3d at 397; see also Fallick, 162 F.3d at 422.
Typicality is met if the class members' claims are “fairly encompassed by the named
plaintiffs' claims.” Whirlpool, 722 F.3d at 852 (citing Sprague, 133 F.3d at 399 (quoting In re
Am. Med. Sys., 75 F.3d at 1082)). “A 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 if his or her claims
are based on the same legal theory.’ ” Beattie v. CenturyTel., Inc., 511 F.3d 554, 561 (6th Cir.
2007) (quoting In re Am. Med. Sys., 75 F.3d at 1082.)
“Like the test for commonality, the test for typicality is not demanding and the interests
and claims of the various plaintiffs need not be identical.” Reese, 227 F.R.D. at 487 (emphasis
added). The inquiry is “whether a sufficient relationship exists between the injury to the named
plaintiff and the conduct affecting the class, so that the court may properly attribute a collective
nature to the challenged conduct.” Beattie, 511 F.3d at 561 (quoting In re Am. Med. Sys., 75 F.3d
at 1082) (internal quotation marks omitted). A class representative’s claim will be deemed

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typical even though “the evidence relevant to his or her claim varies from other class members,
some class members would be subject to different defenses, and the members may have suffered
varying levels of injury.” Reese, 227 F.R.D. at 487-88 (citing Bittinger v. Tecumseh Products
Co., 123 F.3d 877, 884-85 (6th Cir. 1997)). A claim will not be deemed typical, however, “when
a plaintiff can prove his own claim but not necessarily have proved anybody's [sic] else's claim.”
Beattie, 511 F.3d at 561 (quoting In re Am. Med. Sys., 75 F.3d at 1082) (internal quotation marks
omitted).
For adequacy of representation, Rule 23(a)(4) permits certification only if “the
representative parties will fairly and adequately protect the interests of the class.” Fed. R. Civ. P.
23(a)(4). “In order for representative parties to adequately represent a class, there must be no
evidence of collusion or conflicting interests between the representative and the class.” 59 AM.
JUR. 2D Parties §59. Adequacy of representation must be proven to round out the analysis of
Rule 23(a). See In re American Medical Sys., 75 F.3d at 1079 (stating that it is well established
that “the party seeking the class certification bears the burden of proof” and that Rule 23(a)
contains four prerequisites, including adequacy of representation, “which must all be met before
a class can be certified.”).
The Supreme Court has noted how the “two concepts of commonality and typicality ‘tend
to merge’ in practice because both of them ‘serve as guideposts for determining whether under
the particular circumstances maintenance of a class action is economical and whether the named
plaintiff's claim and the class claims are so interrelated that the interests of the class members
will be fairly and adequately protected in their absence.’ ” Whirlpool, 722 F.3d at 853 (quoting
Dukes, 131 S.Ct. at 2551 n. 5). The Sixth Circuit has further noted “that commonality and
typicality tend to merge with the requirement of adequate representation, although the latter

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factor also brings into play any concerns about the competency of class counsel and any conflicts
of interest that may exist.” Id. (citing Dukes, 131 S.Ct. at 2551 n. 5). Accordingly, “[d]ue to the
intertwined nature of commonality, typicality, and adequate representation,” the concepts may be
considered together. Id.
Here, Plaintiff has indicated that they intend to proceed under a single theory of liability
and damages based on a common set of facts. Pl.’s Brief at 23. With respect to adequacy of
representation, Defendants do not challenge that Plaintiff will be adequate in representing the
class. Plaintiff argues that the concept is satisfied because Plaintiff John B. Davidson will fairly
and adequately protect the interest of the class, and because Davidson’s interests here are in no
respect antagonistic, but rather identical. See Pl.’s Brief at 17. The court agrees with Plaintiff,
and accordingly will move forward to the issues of commonality and typicality.
With respect to the remaining issues under Rule 23(a), both parties have set forth specific
arguments regarding the commonality and typicality of the two remaining Counts. As discussed,
these concepts are often considered together; thus, here, the concepts of commonality and
typicality will be addressed together for each Count in turn.
a. Count I – Plaintiff’s Benefits Claim
Plaintiff’s first claim is a civil enforcement claim seeking recovery of benefits under
ERISA. Here, Defendants assert that Plaintiff has not satisfied the commonality and typicality
requirements of Rule 23 because Defendants assert that Plaintiff failed to identify a common
question of such a nature that its determination would resolve the issue of whether Plaintiff
received the benefits that he claims are due to him under the Plan.
Specifically, Defendants assert that Plaintiff has only specified a common question
involving whether Henkel properly and timely determined FICA liability.

-17-

This question,

Defendants assert, goes to whether Henkel withheld taxes in accordance with applicable
regulations, and not to the propriety of the benefits that Plaintiff received under the Plan.
Further, Defendants highlight the fact that Plaintiff acknowledged that his issue with Henkel
relates entirely to FICA withholding – not the benefits themselves. Consequently, Defendants
conclude that answering Plaintiff’s common question would not resolve the dispositive issue for
purposes of ERISA of whether Plaintiff received the benefits owed him under the Plan because
they assert that answering the question goes to taxes, not benefits. Defs.’ Response at 22.
Plaintiff counters that Defendants misstate the common questions of law that were
presented by Count I. According to Plaintiff, Class Member claims stem from Henkel’s uniform
exercise of “ ‘discretionary control over the participants’ funds and their tax treatment and the
Plan authorized and obligated Defendants to properly manage the tax withholding from
Plaintiff’s benefits.’ ” Pl.’s Reply at 1 (citing Pl.’s Ex. L at 13). Thus, Plaintiff surmises that
“[b]oth issues state cognizable claims with respect to the reductions to Class Member
nonqualified benefits under federal common law and are appropriate for class certification.” Id.
at 2. Additionally, Plaintiff concludes that the common issues of law presented in Count I
consists of standardized and systematic conduct on behalf of Henkel towards all members of the
Class, such that certification is particularly appropriate. Id. (citing Appoloni v. United States, 218
F.R.D. 56 at 561(W.D. Mich. 2003)).
After reviewing the arguments by the parties, it appears that Defendants reliance on the
deposition of the Plaintiff in this case misconstrues the proposed common questions for Class
Members presented by Plaintiff. Plaintiff did, in fact, state that the only issue Plaintiff had was
the FICA treatment of nonqualified benefits. See Defs.’ Ex. B at 52:18-53:6. However,

-18-

Defendants appear to be mistaken in their assertion that answering the common question
regarding the proper and timely determination of FICA liability “goes to taxes, not benefits.”
In addition to stating that the common nucleus of this case was the failure of Defendants
to properly and timely determine FICA liability, Plaintiff also emphasized that it was Defendants
“common mistake and improper correction which constitute the ‘collective challenged
conduct.’” This conduct, Plaintiff emphasized, was “conduct sufficient to satisfy commonality
and typicality requirements of Rule 23.” Pl.’s Brief at 14-15 (citing Beattie, 234 F.R.D. at 169).
As this Court stated in it’s July 23, 2013 Order denying Defendants Motion to Dismiss in
Part, Defendants may be liable under Count I “because the Plan gave them discretionary control
over participants’ funds and their tax treatment and the Plan authorized and obligated Defendants
to properly manage the tax withholding from Plaintiff’s benefits. . . .” Davidson v. Henkel Corp.,
No.12-CV-14103, 2013 WL 386398, at *8 (E.D. Mich. July 24, 2013). Thus, the determination
of whether Defendants properly and timely determined FICA liability does go to taxes, however,
contrary to Defendants assertions, it also appears to reach the dispositive issue of whether or not
the benefits were properly managed and disbursed to Plaintiff for the purposes of ERISA §
502(a).
This being the case, the Court will agree with Plaintiff on this issue. During discovery
Defendants stated that the 48 other retirees who retired before January 1, 2007 were treated the
same way as Mr. Davidson. See Ex. E, Kingma Tr. 104; see also id. at 82, 103, 105, 115).
Consequently, because Plaintiff: (1) has put forth a suitable claim under Count I; (2) asserts that
his injury was uniform amongst the entire potential class; and (3) has shown that Defendants
acted in a uniform way towards all members of the potential class, commonality and typicality
are satisfied with regard to Count I.

-19-

b. Count III – Plaintiffs Estoppel Claim
Plaintiff’s estoppel claim is more complex. As an initial matter, this Court recognized
that the Sixth Circuit has found estoppel to be a viable theory in ERISA cases. See Davidson,
2013 WL 386398, at *8-9 (citing Sprauge, 133 F.3d 403-04; Blemker v. Laborers’ Local 265
Pension Fund, 604 F.3d 436, 443-44 (6th Cir. 2010)). Furthermore, this Court laid out the
traditional elements of estoppel, which include: “(1) conduct or language amounting to a
representation of material fact; (2) awareness of the true facts by the party to be estopped; (3) an
intention on the part of the party to be estopped that the representation be acted on, or conduct
toward the party asserting the estoppel such that the latter has a right to believe that the former’s
conduct is so intended; (4) unawareness of the true facts by the party asserting the estoppel; and
(5) detrimental and justifiable reliance by the party asserting estoppel on the representation.” Id.
at *9 (citing Armisted v. Vernitron Corp., 944 F.2d 1287, 1298 (6th Cir. 1991)).
Defendants argue that Plaintiff cannot establish commonality or typicality regarding his
estoppel claim because they assert that Plaintiff cannot show detrimental reliance. Defs.’
Response at 17 (citing CIGNA Corp. v. Amara, 131 S. Ct. 1866, 1881, 179 L. Ed. 2d 843 (2011)
(noting that the Supreme Court has held that “when a court exercises its authority under §
502(a)(3) to impose a remedy equivalent to estoppel, a showing of detrimental reliance must be
made.”)).
Defendants highlight the fact that the Sixth Circuit has found that “estoppel claims are
typically inappropriate for class treatment” due to “their focus on individualized proof.” Defs.’
Response at 18 (citing Sprague, 133 F.3d at 398). Defendants argue that Plaintiff’s estoppel
claim is inappropriate because it would require individualized inquiries that would render
Plaintiff’s claim unsuitable for class treatment. Id. (citing Sprague, 133 F.3d at 398, which

-20-

reversed the district court’s certification of a class of retirees who were allegedly promised
certain health benefits, because the estoppel claim would require person-by-person inquiries into
“what statements were made to a particular person,” “how the person interpreted those
statements,” and “whether the person justifiably relied on those statements to his detriment.”).
For proof, Defendants cite Plaintiff’s testimony that he knows nothing about the
substance of any communications of the proposed class members and Henkel about their
retirement benefits. See Defs.’ Response at 18 (citing Defs.’ Ex. B at 141:8-20). Accordingly,
Defendants argue that resolution of the class claim would be inappropriate because it would
require multiple inquiries resulting in an endless series of mini-trials.
According to Plaintiff, Defendants’ arguments against the estoppel count “demonstrate a
profound misunderstanding of both of Plaintiff’s claims and this Court’s July 24, 2013 Opinion
and Order.” Pl.’s Reply at 2. To rebut Defendants’ arguments, Plaintiff focuses on Fuller v.
Fruehauf Trailer Corporation, which found that a set of retirees met commonality and typicality
requirements for class certification for an equitable estoppel claim despite multiple plan
documents and oral representations. 168 F.R.D. 588 (E.D. Mich. 1996).
In Fuller, this Court outlined how to navigate class actions and claims of estoppel,
finding that:
[T]here is no inherent incompatibility between class actions and claims of estoppel.
Rather, Sprague makes clear that, under the proper set of facts, a class of retirees may be
able to establish that they received uniform and unambiguous assurances upon which
they justifiably and detrimentally relied. See Sprague, 857 F.Supp. at 1188–92. The
Court, therefore, concludes that Plaintiffs allegations, when combined with the additional
materials before the Court, satisfy the prerequisite of “typicality” under Rule 23(a).
168 F.R.D. at 600-01 (emphases added). Plaintiff compares this case with Fuller, and argues
that the facts of this case are more compelling for certifying an estoppel claim. According to
Plaintiff:
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The material disclosures to Plaintiff and the Class members were uniform and identical in
the Plan documents and in the W-2s and monthly retirement checks which showed no
FICA owed. The identical representations were intended to cause Plaintiff and the Class
Members to rely on Defendants’ representations of material fact and disclosures
regarding their tax liability. The true facts were uniformly withheld from the Class
Members and Defendants reckless and grossly negligent mismanagement of Class
Members nonqualified benefits was identical.
Pl.’s Reply at 5. Accordingly, according to Plaintiff, “[t]he Court may properly infer that
Plaintiff and the Class relied on Henkel to properly follow the plan documents, the applicable
law, including IRC statutes and the Special Timing Rule and to properly withhold FICA taxes as
required by law.” Id. (citing Stanich v. Travelers Indem. Co., 249 F.R.D. 506, 517 (N.D. Ohio
2008), which found that uniformity of alleged misrepresentations in written disclosure supported
an inference of reliance common to all class members).
Again, the Court agrees with Plaintiff on this issue. The estoppel claim will be dependent
upon whether detrimental reliance may be imputed to the whole class based off the actions of
Defendants. Defendants would likely prevail, if Plaintiff’s estoppel claim for the class was based
solely upon his individual communication with a representative of Defendants who informed
him: “Yes, at the time you commenced receipt of this benefit, Henkel should have applied FICA
tax to the present value of your nonqualified pension benefit.” See Pl.’s Ex. K.

If this

representation was the sole basis of the class claim, Defendants would be correct in their
contention that the estoppel claim is inappropriate because multiple inquiries would be required
to determine the extent of the Class Members interactions with Defendants.
Plaintiff, however, does not focus on his individual communications with the
representatives of Defendants.

Instead, Plaintiff focuses on the uniform and identical

representations made to the proposed class regarding their tax liability and disbursement of
benefits as the basis of his estoppel claim. The issue for liability regarding these uniform

-22-

representations is not dependent upon Plaintiff’s knowledge about the substance of any
communications between the putative class members and Henkel, as Defendants indicated that
the proposed class was treated the same way as Mr. Davidson. See Ex. E, Kingma Tr. 104; see
also id. at 82, 103, 105, 115.
This being the case, the Court may properly infer that Plaintiff and the Class
detrimentally relied on Henkel to properly follow the Plan documents, the applicable law, and
Timing Rules to properly withhold FICA taxes for benefits. See Reeb v. Ohio Dep’t of Rehab. &
Correction, 81 F. App’x 550, 555 (6th Cir. 2003) (citing Senter, 532 F.2d at 520) (“Ordinarily, a
district court must determine the permissibility of class certification based upon information
other than that which is in the pleadings although it may do so based on the pleadings alone
where they set forth sufficient facts. In making such a determination, a district court may draw
reasonable inferences from the facts before it.”).
It is reasonable for this Court to infer that the proposed Class Members took part in the
Plan based on the uniform disclosures by Defendants regarding how FICA taxes would be
treated under the Plan in Plan documents. Accordingly, this Court may infer detrimental reliance
on behalf of the proposed class, and will, consequently, find that commonality and typicality are
satisfied with regard to Count III.
4. Predominance
If this Court finds Plaintiff satisfies the requirements of Rule 23(a), Plaintiff must next
satisfy the concepts of predominance and superiority embodied in Rule 23(b)(3). Rule 23(b)(3)’s
“predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant
adjudication by representation.” Amchem Products, Inc. v. Windsor, 521 U.S. 591, 623, 117 S.
Ct. 2231, 138 L. Ed. 2d 689 (1997). The predominance requirement shares similarities to Rule

-23-

23(a)(2)'s commonality requirement, see id. at 623 n.18; Ball v. Union Carbide Corp., 385 F.3d
713, 728 (6th Cir. 2004); however, it requires more: “The commonality requirement is satisfied
if there is a single factual or legal question common to the entire class[, while t]he predominance
requirement is met if this common question is at the heart of the litigation.” Powers, 501 F.3d at
619 (citing Am. Med. Sys., 75 F.3d at 1080).
The Sixth Circuit has stated definitively that “the fact that a defense may arise and may
affect different class members differently does not compel a finding that individual issues
predominate over common ones.” Beattie, 511 F.3d at 564 (internal quotations omitted).
Moreover, the Sixth Circuit has “never required a precise mathematical calculation of damages
before deeming a class worthy of certification.” In re Scrap Metal Antitrust Litig., 527 F.3d 517,
535 (6th Cir. 2008) (citing Olden v. LaFarge Corp., 383 F.3d 495, 508 (6th Cir. 2004)). Instead,
“common issues may predominate when liability can be determined on a class-wide basis, even
when there are some individualized damage issues.” Beattie, 511 F.3d at 564 (internal quotations
omitted). “ ‘[T]he mere fact that questions peculiar to each individual member of the class
action remain after the common questions of the defendant's liability have been resolved does
not dictate the conclusion that a class action is impermissible.’ ” Powers, 501 F.3d at 619
(quoting Sterling v. Velsicol Chem. Corp., 855 F.2d 1188, 1197 (6th Cir.1988).
Two recent Supreme Court Cases are particularly relevant to the discussion of
predominance in the instant case. See Amgen Inc. v. Connecticut Ret. Plans & Trust Funds, 133
S. Ct. 1184, 185 L. Ed. 2d 308 (2013); Comcast Corp. v. Behrend, 133 S. Ct. 1426, 185 L. Ed.
2d 515 (2013). In Amgen, the Supreme Court focused on liability giving rise to a finding of
predominance and reiterated that “the predominance inquiry must focus on common questions
that can be proved through evidence common to the class[, and that a] plaintiff need not prove

-24-

that each element of a claim can be established by classwide proof.” Whirlpool, 722 F.3d at 86061 (citing Amgen, 133 S.Ct. at 1195–96).
In Comcast Corp., the Supreme Court focused on both liability and damages giving rise
to a finding of predominance. With regard to damages, specifically, the Court used a
“straightforward application of class-certification principles,” to find that a “model purporting to
serve as evidence of damages ... must measure only those damages attributable to that theory. If
the model does not even attempt to do that, it cannot possibly establish that damages are
susceptible of measurement across the entire class for purposes of Rule 23(b)(3).” Comcast
Corp., 133 S.Ct. at 1433.
With regard to Amgen and Comcast Corp., the Sixth Circuit conducted a thorough
analysis and noted that “to satisfy Rule 23(b)(3), named plaintiffs must show, and district courts
must find, that questions of law or fact common to members of the class predominate over any
questions that affect only individual members.” Whirlpool, 722 F.3d at 860 (citing Amgen, 133
S.Ct. at 1195–96; Comcast Corp., 133 S.Ct. at 1433). Specifically, the Court noted that:
Both cases are premised on existing class-action jurisprudence. The majority in Comcast
Corp. concludes that the case “turns on the straightforward application of class
certification principles,” and the dissent concurs that “the opinion breaks no new ground
on the standard for certifying a class action under Federal Rule of Civil Procedure
23(b)(3)[.]” The dissent notes other class action principles that remain unchanged.
“[W]hen adjudication of questions of liability common to the class will achieve
economies of time and expense, the predominance standard is generally satisfied even if
damages are not provable in the aggregate.” A class may be divided into subclasses, or,
as happened in this case, “a class may be certified for liability purposes only, leaving
individual damages calculations to subsequent proceedings.”
Whirlpool, 722 F.3d at 860-61 (internal citations omitted). The Court concluded, noting that
“Because ‘[r]ecognition that individual damages calculations do not preclude class certification
under Rule 23(b)(3) is well nigh universal,’ in ‘the mine run of cases, it remains the “black letter
rule” that a class may obtain certification under Rule 23(b)(3) when liability questions common
-25-

to the class predominate over damages questions unique to class members.’ ” Id. at 861 (internal
citations omitted).
Here, again, both parties have set forth specific arguments regarding the predominance of
the two remaining Counts. Accordingly, the concept of predominance with respect to each
Count will be addressed in turn.
a. Count I – Plaintiff’s Benefits Claim
As an initial matter, Defendants do not present an argument that potential liability for
Count I would undermine a finding of predominance. Plaintiff puts forth a compelling argument
that this Court will agree with, citing Sixth Circuit authority for the proposition that a single
course of wrongful conduct can easily satisfy the predominance requirement with respect to
liability. See Pl.’s Brief at 20-21(citing Powers, 501 F.3d at 619, for the proposition that “[t]he
predominance requirement is met if this common question is at the heart of the litigation”) and
Bobbitt, 252 F.R.D. at 344, for the proposition that “[c]ases alleging a single course of wrongful
conduct are particularly well-suited to class certification.”).
Defendants’ argument for Count I centers on the complexity of damages calculations for
this claim, as Defendants contend that Plaintiff cannot meet the predominance requirements of
Rule 23(b)(3) because of the complexity of the individual damages calculations related to
Plaintiff’s benefits claim. Defendants argue that Plaintiff offers no evidence in support of his
contention that a uniform remedy exists in this case, and Defendants further argue that Plaintiff
fails to show “that the purported formula matches [Plaintiff’s] theory of liability, as [Plaintiff is]
required to do.” Defs.’ Response at 24 (citing Comcast Corp. 133 S.Ct. at 1433-34).
According to Defendants, “[h]ere, calculating damages on Plaintiff’s benefits claim
would not be a run-of-the-mill application of a mechanical formula. Rather, the damages

-26-

calculation would require mini-trials because the issue of damages on Plaintiff’s benefits claim is
complex and does not lend itself to a simple, mechanical formula.” Id. at 23. Specifically,
Defendants’ point out that “Plaintiff seeks to recover as damages the difference between the
amount of FICA taxes that Henkel must withhold from each class member’s benefit payments
under the General Timing Rule and the amount of FICA taxes that Henkel would have withheld
under the Special Timing Rule for each individual.” Id. at 24.
To prevail, Defendants note that Plaintiff and each proposed class member “would have
to show that they have paid more in FICA taxes than they otherwise would have but for the
change in how FICA taxes were being handled.” Id. According to Defendants, this is not
possible because Plaintiff’s approach would involve multiple complex issues regarding the
computation of damages for the class members, such as:







Individuals with relatively small benefits may still have paid less to date under the “payas-you-go” approach than they would have under the Special Timing Rule. Plaintiff
offers nothing to show that every member of the proposed class has actually suffered any
harm.
Members of the proposed class may have paid FICA taxes on earnings from other
employers during the years in question, entitling them to a refund of FICA taxes paid on
their Plan benefits and thus may have suffered no harm.
Plaintiff claims that because of his earning in the year he retired, he would have paid
nothing for the OASDI portion of FICA taxes because his earnings already had surpassed
the annual earnings to which those taxes apply.
Plaintiff has not shown that this is the case for every other member of the putative class.
Even if additional OASDI taxes might not have been due with respect to the Plan benefits
of Plaintiff and proposed class members, there is no question that Medicare or “HI” taxes
would have been due on the lump sums determined under the Special Timing Rule.
Those amounts may eclipse taxes paid to date under the pay-as-you-go approach for
certain class members.

Defs.’ Response at 24-25. This being the case, according to Defendants, “[i]t is clear that
damage calculations would depend on a series of individualized factors, including the individual
class member’s respective annual incomes, earnings from non-Henkel sources, and federal
income tax brackets [.]” Id. Accordingly, Defendants cite Comcast Corp. for the proposition that
-27-

the damages inquiry in this case would overwhelm the questions common to the class, because,
“the damages calculation does not lend itself to a simple, mechanical formula,” and instead, “the
calculation would require mini-trials on each class member’s financial history.” Id.
Plaintiff disagrees, and, in his Motion, argues that the predominance requirement for this
claim is easily satisfied by the single course of wrongful conduct by Defendants. See Pl.’s Brief
at 19 (citing Bobbit, 252 F.R.D at 343). In the Motion, Plaintiff broadly cites ERISA § 502, and
indicates that the Court will be able to “fashion an equitable remedy under ERISA that would be
applied to all of the Class members uniformly.” Pl.’s Brief at 20. With respect to the Supreme
Court’s decision in Comcast Corp. the Plaintiff argues that Defendants’ reliance on the decision
is misplaced. Plaintiff argues that Comcast Corp. is not applicable here because Comcast Corp.
involved an antitrust injury, for which this case has no parallel. Specifically, Plaintiff states that
the distinguishing factor is that “Plaintiff has not lumped together viable and non-viable theories
of liability to calculate ‘damages.’ ” Pl.’s Reply at 7.
Here, the Court will agree with Plaintiff, but not solely for the reasons given in Plaintiff’s
briefs. With respect to the argument put forth in Plaintiff’s Reply, Plaintiff is correct; he has not
lumped together viable and non-viable theories of liability. However, in his Motion for Class
Certification and Appointment of Class Counsel, the only model of damages put forth by
Plaintiff is an unexplained equitable remedy under ERISA that Plaintiff states this court will
apply to all of the Class members uniformly. The Court would be hesitant to find predominance
with regard to the matter of damages and the benefits claim as enunciated in Plaintiff’s Motion,
because the Supreme Court expressly rejected this approach in Comcast Corp. See 1333 S. Ct. at
1430 (“The District Court held, and it is uncontested here, . . . that the damages resulting from

-28-

that injury were measurable ‘on a class-wide basis’ through use of a ‘common methodology.’”)
(citations omitted).
In Comcast Corp., the Supreme Court emphasized that the District Court’s model of
damages, which relied solely on a vague common methodology advanced by the plaintiff, fell
“far short of establishing that damages are capable of measurement on a classwide basis.”
Comcast Corp. 133 S. Ct. at 1433. The Court stressed that “[w]ithout presenting another
methodology, respondents cannot show Rule 23(b)(3) predominance: Questions of individual
damage calculations will inevitably overwhelm questions common to the class.” Id.
If this Court were to rely solely on Plaintiff’s Motion, Plaintiff’s argument would fail due
to a lack of specificity, as Plaintiff’s model does not address the potential individualized issues
presented by Defendants in their Response. See Defs.’ Response at 24-25. Without guidance on
a detailed methodology for damages, the potential individualized matters involving damages
would appear to run afoul of the standard set forth in Comcast Corp., as the damages calculations
do not appear to lend themselves to a simple mechanical formula. See 133 S.Ct. at 1433 (“The
Court of Appeals simply concluded that respondents ‘provided a method to measure and quantify
damages on a classwide basis,’ finding it unnecessary to decide ‘whether the methodology [was]
a just and reasonable inference or speculative.’ Under that logic, at the class-certification stage
any method of measurement is acceptable so long as it can be applied classwide, no matter how
arbitrary the measurements may be. Such a proposition would reduce Rule 23(b)(3)'s
predominance requirement to a nullity.”) (emphasis in original) (internal citations omitted)
However, the Court is persuaded by the arguments advanced by Plaintiff during the
hearing on Plaintiff’s motion. During the hearing, Plaintiff clarified his position, and explained
that, should the Court find that Defendants mismanaged the benefits of the Plaintiff, the Court

-29-

would be able to fashion a uniform remedy for the proposed class through reformation or
disgorgement to provide appropriate relief as a result of that mismanagement.

Under this

proposed methodology, Plaintiff argued that the Court’s reformation would not require
individualized damage calculations. To the contrary, Plaintiff argued that potential differences in
the proposed class would be inconsequential because the Court would be focused on applying a
simplistic formula to remedy Defendants’ purported mismanagement of the funds
Looking at the Plaintiff’s complaint, Plaintiff did specify that they are entitled to all
available relief under ERISA including:
a. All such equitable relief as is available, including the difference between what he was
owed and the amount they actually received plus applicable interest;
b. Disgorgement and restitution of such amounts to the participant that have been
wrongfully appropriated;
c. Declaratory relief to compel the Defendants to cease the deduction from Plaintiffs
retirement benefit checks of all such payments caused by Defendants’ mistake.
d. Attorneys’ fees and costs pursuant to 29 U.S.C. § 1132(a)
e. All other available relief pursuant to 29 U.S.C. § 1132(a)
f. An accounting of all FICA taxes paid by Defendants as part of the claimed settlement
with the IRS.
g. Damages, costs, applicable attorneys’ fees incurred as a result of the violation of
ERISA 503(a)(3).
h. Any other equitable or remedial relief as the court may deem appropriate.
Pl.’s Complaint at ¶ 84(a)-(h) (emphasis added). To reiterate, when this Court denied
Defendants’ Motion to Dismiss in part, this Court found that Plaintiff had stated a cognizable
claims for a civil enforcement action brought pursuant to ERISA § 502(a). Defendants are
mistaken in their assertion that the remaining benefits claim is solely limited to §502(a)(1)(B), as
this Court never stated anything to that affect. See Davidson, 2013 WL 386398, at *8 (“Plaintiff
states a claim under ERISA in Count I of the Complaint. . . . The Court finds that Plaintiff has
stated a claim in Count I under ERISA.”).

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This being the case, should the Court find that Defendants mismanaged the benefits of
the proposed class, this Court has the authority to fashion a remedy which reforms the Plan in
such a way that it reflects the mutual understanding of the contracting parties to make the
proposed class whole as a result of Defendants’ purported mismanagement. The Supreme Court
has not foreclosed such an approach as it explained:
[W]hen a court exercises its authority under § 502(a)(3) . . . a showing of detrimental
reliance . . . is not always necessary for [] equitable remedies. Equity courts, for example,
would reform contracts to reflect the mutual understanding of the contracting parties
where “fraudulent suppression[s], omission[s], or insertion[s] . . . material[ly] ...
affect[ed]” the “substance” of the contract, even if the “complaining part[y]” was
negligent in not realizing its mistake, as long as its negligence did not fall below a
standard of “reasonable prudence” and violate a legal duty. Nor did equity courts insist
upon a showing of detrimental reliance in cases where they ordered “surcharge.” Rather,
they simply ordered a trust or beneficiary made whole following a trustee's breach of
trust. In such instances equity courts would “mold the relief to protect the rights of the
beneficiary according to the situation involved.” This flexible approach belies a strict
requirement of “detrimental reliance.”
CIGNA Corp., 131 S. Ct. at 1881 (alteration in original) (internal citations omitted). Thus, the
Court finds that it possesses a methodology in which individual damage calculations will not
overwhelm questions common to the class, as the Courts remedy, if required, will focus only on
rectifying the purported mismanagement of benefits. If necessary, this court will only fashion a
remedy in order to make the Plaintiffs whole regarding Defendants’ purported failure to properly
apply the Special FICA Timing Rule on a one-time basis in 2003.
The Court is only focused on the one-time period in 2003. Thus, the individualized
issues with which Defendants are concerned appear to be ancillary and de minimis at best. See
Beattie, 511 F.3d at 564 (“[T]he fact that a defense may arise and may affect different class
members differently does not compel a finding that individual issues predominate over common
ones.”) (internal quotations omitted); Id (“[C]ommon issues may predominate when liability can
be determined on a class-wide basis, even when there are some individualized damage issues.”)
-31-

(internal quotations omitted); In re Scrap Metal Antitrust Litig., 527 F.3d at 535 (citing Olden,
383 F.3d at 508) (stating that the Sixth Circuit has “never required a precise mathematical
calculation of damages before deeming a class worthy of certification.”); Powers, 501 F.3d at
619 (quoting Sterling, 855 F.2d at 1197 (“[T]he mere fact that questions peculiar to each
individual member of the class action remain after the common questions of the defendant's
liability have been resolved does not dictate the conclusion that a class action is
impermissible.”).
Accordingly, this Court finds that Comcast Corp. is not applicable because in fashioning
a remedy to rectify Defendants’ purported one-time failure to properly apply the Special FICA
Timing Rule, the Court is fashioning a remedy on an issue “common to members of the class”
which, “predominate[s] over any questions that affect only individual members.” Whirlpool, 722
F.3d at 860 (citing Amgen, 133 S.Ct. at 1195–96; Comcast Corp., 133 S.Ct. at 1433).
Accordingly, the Court finds that the predominance requirement is also satisfied with respect to
damages for Count I.
b. Count III – Plaintiffs Estoppel Claim
With respect to Plaintiff’s estoppel claim, the analysis is very similar to the analysis put
forth for commonality. Defendants assert that there is no colorable basis for Plaintiff to assert
that the estoppel claim could meet the predominance requirement because the claim would turn
on whether each class member relied to his or her detriment on a misrepresentation by Henkel.
See Defs.’ Response at 20 (citing Cigna Corp., 131 S. Ct. at 1881).
Plaintiff argues that predominance is satisfied for the estoppel claim because
“[predominance is clearly satisfied where a ‘single course of wrongful conduct,’ is alleged, i.e.
Henkel’s systematic ‘grossly negligent management of the Plan,’ warranting the application of

-32-

estoppel.” Pl.’s Reply at 3 (citing Davidson, 2013 WL 386398, at *8; Bobbit, 252 F.R.D. at
344).
Because the Court may properly infer that Plaintiff and the Class detrimentally relied on
Henkel to properly follow the Plan documents, the applicable law, and Timing Rules to properly
withhold FICA taxes for benefits as required by law, this Court may infer detrimental reliance on
behalf of the proposed class. Since this is the case, the Court would not be required to take part
in individualized inquiries, and, consequently, finds that predominance is satisfied with regard to
liability and Count III.
Neither party addresses the matter of damages with respect to predominance and the
estoppel claim. However, given our analysis of the benefits claim, it is worth mentioning that
the matter is satisfied. In general, this Court has found that an injured party on an estoppel claim
has a right to damages “based on his reliance interest including expenditures made in
preparation for performance or in performance, less any loss that the party in breach can
prove with reasonable certainty the injured party would have suffered had the contract been
performed.” Kvaerner U.S., Inc. v. Hakim Plast Co., 74 F. Supp. 2d 709, 721 (E.D. Mich. 1999)
(citing RESTATEMENT OF THE LAW, SECOND, CONTRACTS § 349) (emphasis in original).
The Supreme Court in Cigna Corp. specifically indicated that a Court may fashion a
remedy pursuant to § 502(a)(3) of ERISA as long as there is a showing of detrimental reliance.
131 S. Ct. at 1881 (“[W]hen equity courts used the remedy of estoppel, they insisted upon a
showing akin to detrimental reliance, i.e., that the defendant's statement ‘in truth, influenced the
conduct of’ the plaintiff, causing ‘prejudic[e].’ Accordingly, when a court exercises its authority
under § 502(a)(3) to impose a remedy equivalent to estoppel, a showing of detrimental reliance
must be made.”) (emphasis and alteration in original) (internal citations omitted). Accordingly

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this Court will find that the predominance requirement is also satisfied with respect to damages
for Count III.
5. Superiority
Rule 23(b)(3) lastly requires that “a class action is superior to other available methods
for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). According to the
Supreme Court, the rule is designed to “ ‘achieve economies of time, effort, and expense, and
promote ... uniformity of decision as to persons similarly situated, without sacrificing procedural
fairness or bringing about other undesirable results.’ ” Amchem, 521 U.S. at 615, (quoting Fed.
R. Civ. P. 23 Advisory Committee Notes).
In order to determine whether a class action is superior, the Sixth Circuit has stated that
the district court should consider the difficulties of managing a class action. Beattie, 511 F.3d at
567. Furthermore, the Sixth Circuit has found that:
The district court should also compare other means of disposing of the suit to determine
if a class action “is sufficiently effective to justify the expenditure of the judicial time and
energy that is necessary to adjudicate a class action and to assume the risk of prejudice to
the rights of those who are not directly before the court.”
Pipefitters, 654 F.3d at 630-31 (6th Cir. 2011) (citations omitted).
Defendants argue that Plaintiff’s estoppel claim does not satisfy the superiority
requirement because “establishing detrimental reliance would require ‘mini-trials’ for each
putative class member, rendering the estoppel claim unmanageable as a class action.” Defs.’
Response at 21. Plaintiff argues that because class issues predominate, superiority is appropriate
for both claims. Pl.’s Brief at 21 (citing Bobbit, 252 F.R.D. at 344). Further, Plaintiff addresses
the four factors pertinent to the superiority analysis in a compelling fashion. Pl.’s Brief at 21-24.
The Court agrees with plaintiff with regard to superiority for the estoppel claim.
Assuming that the Court may properly infer that Plaintiff and the Class relied on Henkel to
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properly follow the Plan documents, the applicable law, and Timing Rules to properly withhold
FICA taxes for benefits as required by law, this Court may infer detrimental reliance on behalf of
the proposed class. Under such circumstances, the Court would not be required to take part in
individualized inquiries, and would be able to find superiority with regard to the estoppel claim.
As Defendants did not challenge superiority with respect to the benefits claim, and
Plaintiff has put forth a compelling argument outlining the adherence to the requirements of Rule
23(b) for both claims, this Court has no problem finding that a class action with respect to
liability for both claims “is sufficiently effective to justify the expenditure of the judicial time
and energy that is necessary to adjudicate a class action and to assume the risk of prejudice to the
rights of those who are not directly before the court.” Pipefitters, 654 F.3d at 630. Accordingly,
the Court finds that superiority is satisfied for both claims.
6. Proposed Class Counsel
Pursuant to Rule 23, “[u]nless a statute provides otherwise, a court that certifies a class
must appoint class counsel.” Fed. R. Civ. P. 23(g)(1). Additionally, Rule 23 provides that, in
appointing class counsel, the Court must consider: 1) “the work counsel has done in identifying
or investigating potential claims in the action; 2) “counsel’s experience in handling class actions,
other complex litigation, and the types of claims asserted in the action”; 3) “counsel’s knowledge
of the applicable law”; and 4) “the resources that counsel will commit to representing the class.”
Fed. R. Civ. P. 23(g)(1)(A). Rule 23 further provides that the Court “may consider any other
matter pertinent to counsel’s ability to fairly and adequately represent the interests of the class.”
Fed. R. Civ. P. 23(g)(1)(B).
Defendants do not oppose the appointment of The Miller Law Firm, P.C. as Class
Counsel. The Miller law Firm is experienced in dealing with class actions and ERISA cases, see

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Pl.’s Ex. P, and has demonstrated through this case that they are capable of prosecuting the
current action. Thus, this Court appoints the Miller Law Firm, P.C. as lead counsel for the
present action.
IV. CONCLUSION
For the aforementioned reasons the Court will GRANT Plaintiff’s Motion for Class
Certification and Appointment of Class Counsel [#92].
This Court certifies the proposed class with respect to both liability and damages on both
Counts; appoints Plaintiff John Davidson as the Class Representative; and appoints The Miller
Law Firm P.C as Class Counsel.
SO ORDERED.
Dated: September 29, 2014
/s/Gershwin A Drain
Hon. Gershwin A. Drain
United States District Court Judge

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