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ERISA Class Action Defense Cases–Adams v. IBM: New York Federal Court Grants Defense Motion To Dismiss ERISA Class Action Finding Res Judicata Barred Class Action Against Plan And Plan Administrator

ERISA Class Action Barred by Plaintiff’s Prior Lawsuit Against IBM thus Supporting Defense Motion to Dismiss Class Action New York Federal Court Holds

Plaintiff filed a putative class action in New York against his former employer’s pension plan and its administrator alleging violations of ERISA (Employee Retirement Income Security Act of 1974) by failing to pay him plan benefits. Adams v. IBM Personal Pension Plan, 533 F.Supp.2d 342, 343 (S.D.N.Y. 2008). Defense attorneys moved to dismiss the class action on the grounds that res judicata barred plaintiff’s claim “as the result of Adams’s prior action in the United States District Court for the Northern District of Georgia, in which the court granted the summary judgment motion filed against Adams by IBM, the only defendant in that action.” Id. Plaintiff’s lawyer argued that res judicata did not bar the current class action because the prior lawsuit was against IBM, not the plan or the plan’s administrator, id. Because the parties in the two actions differed – IBM in the Georgia action, and the Plan and Plan Administrator in the New York action – the only way res judicata would apply would be “if the Court finds either that the Plan and Plan Administrator are ‘privies’ of IBM, or that an exception to the mutuality requirement for res judicata applies.” Id. Because the federal court found that IBM, and the Plan and Plan Administrator, are “closely related,” it held that res judicata applied. Id., at 344. Specifically, the prior action alleged the “same misconduct” and it appears that plaintiff erred in filing his first lawsuit against IBM rather than the plan and its administrator, id. The district court concluded at page 344, “In these circumstances, and particularly where the party seeking to avoid claim preclusion was the plaintiff in the prior action and the sole source of the error in naming the incorrect party, res judicata should bar the plaintiff from gaining a second opportunity to litigate the very same claims, even where complete identity between the parties is lacking.” Accordingly, the court granted the motion to dismiss the class action, id.¸at 345.

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