Free Brief in Support of Motion - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 03-cv-2671-RPM-OES JOHNNY WELLS, DONALD J. BROOKINS, and RILEY ANDREW SCHAEFFER, on behalf of themselves and all others similarly situated, Plaintiffs, vs. GANNETT RETIREMENT PLAN and GANNETT CO., INC. Defendants.

PLAINTIFFS' REPLY MEMORANDUM BRIEF IN SUPPORT MOTION FOR CLASS CERTIFICATION

Plaintiffs, Johnny Wells, Donald J. Brookins, and Riley Andrew Schaeffer, by their attorneys, respectfully submit this reply memorandum brief in support of their Motion for Class Certification pursuant to Fed.R.Civ.P. 23. I. INTRODUCTION

Plaintiffs are and have been since prior to January 1, 1998 participants in the Gannett Retirement Plan ("Plan"). They claim that the Plan's Pension Equity Formula ("PEF") under which plaintiffs and thousands of other Plan participants have accrued benefits since that date violates the Employee Retirement Income Security Act, 26 U.S.C. §1000, et seq. Specifically, Plaintiffs allege that under the PEF the annual rate at which participants accrue benefits decreases because of a participant's age. Plaintiffs also allege that following the Plan's adoption

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of the PEF the accrual of benefits ceased for some participants for periods of time directly related to the participant's age. As a result Plaintiffs claim that the Plan violates ERISA §204(b)(1)(H), 29 U.S.C. §1054(b)(1)(H), which declares that a defined benefit pension plan is unlawful "if, under the plan, an employee's benefit accrual is ceased, or the rate of an employee's benefit accrual is reduced, because of the attainment of any age." Plaintiffs bring this action under ERISA §502(a)(3), 29 U.S.C. §1132(a)(3), which authorizes any plan participant to sue "(A) to enjoin any act or practice which violates any provision of this title or the terms of the plan, (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this title or the terms of the plan." Plaintiffs ask the Court to (1) declare that the PEF violates §204(b)(1)(H), (2) order the Plan to determine the benefits accrued by all participants since January 1, 1998 in a manner that complies with ERISA, and (3) order the Plan to correct any undercalculation and underpayment of any participant's benefits that has resulted from the Plan's violation of the statute. Because this action satisfies the prerequisites of F.R.C.P. Rule 23(a) and because it both challenges a Plan formula that has been generally applicable to all Plan participants and seeks declaratory and injunctive relief that could affect all participants, Plaintiffs' Motion for Class Certification asks the Court to certify a class, pursuant to Rule 23(b)(2), consisting of "[a]ll individuals whose Accrued Benefit has been determined pursuant to the Pension Equity Provisions contained in Article VIA of the Gannett Retirement Plan, as amended effective January 1, 1998, excluding all individuals who first became participants in the Plan after January 1, 2003."

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Defendants, the Plan and Gannett Co., Inc. (hereinafter collectively referred to as "Gannett"), have filed a response in opposition to this motion in which they contend that Plaintiffs "are not proper representatives of their proposed class and have failed to meet their burden of establishing that the class should be certified." [Response at 1]. The arguments presented by Gannett in opposition to class certification suffer from numerous flaws, the most notable being the mistaken presumption that this is a suit seeking the recovery of some form of "damages' for the Plaintiffs rather than an action under ERISA § 502(a)(3) challenging the fundamental lawfulness of the PEF.1 If, as Plaintiffs allege, the Plan's benefit accrual formula violates ERISA, Gannett will be required to change the formula to bring it into compliance with the statute and to provide benefits under that amended formula to all potential class members for their service since January 1, 1998.2 Thus, both the nature of the claims presented and the relief that will be required comport with the parameters of Rule 23(b)(2). Indeed, that subsection of Rule 23 was created for just this type of case. Because the case also satisfies all the requirements of Rule 23(a), Plaintiffs' Motion for Class Certification should be granted.

The attempt to recast this as a "damages" action is apparent from the Defendants' incomplete quotation of the Plaintiffs' prayer for relief on page 3 of their response.
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If the Court determines that the benefit accrual formula violates ERISA, the Court can, and presumably would, require Defendants to amend it to comply with the statute. In addition, even without such a remedial order, once the Plan formula is declared unlawful, Gannett would need to retroactively amend the Plan to maintain its tax-qualified status. Having so amended the Plan, Gannett would have to recompute and credit participants with benefits for service after January 1, 1998 in accordance with the amended formula.

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II. DISCUSSION. The argument advanced by Gannett begins with a misplaced attack upon the merits of Plaintiffs' claims. Gannett then asks the Court to invoke an unwarranted "burden of proof" in analyzing the requirements of Rule 23(a) and to disregard both the substance of Plaintiffs' claims and the statute under which they are brought in conducting that analysis. Finally, consistent with their ongoing mischaracterization of this as a damages case, Gannett contends that the claims do not meet the requirements of Rule 23(b)(2).3 Gannet cannot prevail on any of these arguments. A. Gannett's Arguments Regarding the Merits of Plaintiffs' Claims Have No Relevance for This Motion.

Gannett goes to considerable length attempting to extol the validity of so-called "hybrid" defined benefit plans that employ benefit formulae with some similarities to the PEF. This attempt to argue the lawfulness of the PEF, and hence the merits of Plaintiffs' claims, has no bearing here. While it may be appropriate for the Court to consider the issues raised by Plaintiffs' claims in assessing whether certification is appropriate, the Court should not delve into the substantive merits of the claims. Colorado Cross-DisabilityCoalition v. Taco Bell Corp. 184 F.R.D. 354, 356 (D. Colo. 1999); Schwartz v. Celestial Seasonings, Inc., 178 F.R.D. 545, 550 (D. Colo. 1998). In deciding the certification question, the allegations of Plaintiffs'
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In Point III of their brief, Gannett argues that the class definition is overbroad and that the class should be limited to the Plan participants "identified in the complaint as being harmed." Such a modification would be unwarranted for at least two reasons. First, definition of a class in terms of persons who have been harmed improperly injects the merits of the claim into the class definition process. See Manual for Complex Litigation, Fourth, § 21.222 ("The order defining the class should avoid subjective standards (e.g., a plaintiff's state of mind) or terms that depend on resolution of the merits (e.g., persons who were discriminated against).") Second, as is discussed below, all plan participants are presumed to be harmed by an employer's maintenance of an unlawful plan. Financial Institutions Retirement Funds v. Office of Thrift Supervision, 964 F.2d 142, 149 (2d Cir. 1992)(An allegation that ERISA has been violated shows "injur[y] within the meaning of the statute and therefore also within the meaning of Article III" for any plan participant.)

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complaint are to be accepted as true. Blackie v. Barrack, 524 F.2d. 891, 901n.17 (9th Cir. 1975), cert. denied, 429 U.S. 816 (1976); In re Intelcom Group, Inc. Sec. Litig., 169 F.R.D. 142, 145 (D. Colo. 1996). This mandate applies to Plaintiffs' allegation that the PEF causes a cessation of participants' benefit accruals and/or a reduction in the rate of participants' benefit accruals on account of participants' age. If ERISA requires that these "benefit accruals" be measured by reference to a participant's statutorily defined "accrued benefit," i.e. an annuity commencing at normal retirement age, and Plaintiffs' allegations concerning the manner in which benefits accrue under the PEF are correct (a fact that must be assumed for the purpose of this motion) then the PEF as a whole violates section 204(b)(1)(H). In short, the salient "merits" question for all class members turns on a determination as to whether the term "benefit accrual" in section 204(b)(1)(H) refers to participants' accrued benefits ­ an annuity commencing at normal retirement age ­ or some other "benefit" derived from hypothetical "accounts" involved in the application of the Plan's benefit formula. Gannett's allusions to how other district court decisions regarding other--and notably different--hybrid plans have addressed this purely legal issue simply have no relevance to the class certification issue before the Court.4 Moreover, even if such decisions were relevant, Gannett's discussion of them is incomplete. For example, while Gannett is correct that an appeal is pending in the case of Cooper v. IBM, 274 F.Supp 2d 1010 (S.D. Ill. 2003), that appeal does not involve the district court's ruling that the pension equity formula adopted by IBM in 1995 ­ a benefit accrual formula that closely

Tellingly, Defendants chose not to argue in the motion to dismiss they filed on April 27, 2004, that the section 204(b)(1)(H) rules regarding benefit accruals apply to something other than a participant's accrued benefit in the form of an annuity at normal retirement age.

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resembles the PEF utilized by the Plan and differs significantly from the typical cash balance formulae addressed by the decisions Gannett cites ­ violates ERISA §204(b)(1)(H). Subsequent to the ruling, the parties in Cooper reached a settlement as to that issue and the district court's decision regarding the illegality of IBM's pension equity formula stands as a final judgment. In addition, on March 31, 2006, the day after Gannett filed their opposition here, the U.S. District Court for the District of Connecticut issued an order in the case of Richards v. Fleet Bank denying a motion to dismiss Plaintiffs' class action claims that the cash balance pension formula adopted by Fleet violates section 204(b)(1)(H). [A copy of the court's as yet unpublished opinion is attached as Exhibit 1]. In doing so, the court expressly agreed with this Court's March 22, 2005 ruling that section 204(b)(1)(H) applies to benefit accruals for participants of any age, not just those beyond normal retirement age. The court in Richards also agreed with the conclusion reached by the district court in Cooper - that for the purpose of gauging compliance with section 204(b)(1)(H) the rate of benefit accrual for a defined benefit plan with a so-called hybrid benefit formula must be measured in reference to a participant's statutorily defined "accrued benefit," i.e., an annuity at normal retirement age. Gannett has presented no rationale for the Court to assess the merits of this unresolved legal issue at this juncture in the case. B. Satisfaction of the Rule 23 Requirements Must be Determined on the Basis of the Claims Actually Presented Here, Rather Than on the Characterizations of Those Claims Proffered by Gannett.

The bulk of Gannett's argument regarding satisfaction of the requirements for class certification arises from the unfounded contention that Plaintiffs seek monetary, rather than equitable, relief. The record before the Court demonstrates the error of Gannett's argument. The

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concluding paragraphs of both the First and Second Claims for Relief clearly state that Plaintiffs are requesting relief pursuant to ERISA §502(a)(3): Pursuant to ERISA §502(a)(3), 29 U.S.C. §1132(a)(3), Plaintiffs and the class are entitled to a judgment declaring that the Plan does not comply with the accrual rules of ERISA and providing other appropriate relief to redress the Plan's violations of ERISA and ensuring that benefits are determined and paid pursuant to a formula that complies with the accrual rules of ERISA. The second paragraph of Plaintiffs' Prayer for Relief asks the Court to: "Enter judgment on behalf of Plaintiffs and the class against defendants on all claims asserted herein;" ­ obviously including the declaratory judgment and other "appropriate relief" sought by Plaintiffs in those concluding paragraphs of both of the claims. In addition, in their response to Gannett's Motion to Dismiss, Plaintiffs unequivocally stated: In their First and Second Claims for Relief Plaintiffs seek declaratory and equitable relief pursuant to ERISA §502(a)(3), determining that the Plan does not comply with ERISA §204(b)(1)(H) and requiring the Plan to comply with, and pay benefits in accordance with, applicable provisions of ERISA. [Response to Motion to Dismiss at pp 8-9]. The fact that Plaintiffs also ask that the Court order Gannett to calculate and pay benefits pursuant to a formula that complies with ERISA's benefit accrual rules does not change the declaratory and injunctive nature of this action. Any of what Gannett characterizes as "monetary" relief will only arise from, and would therefore be incidental to, a judgment declaring the PEF to be unlawful under section 204(b)(1)(H) and an order requiring Gannett to adopt, effective as of January 1, 1998, a benefit accrual formula that complies with ERISA's benefit accrual requirements. ERISA §502(a)(3) authorizes plan participants to bring actions "(A) to enjoin any act or practice which violates any provision of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to

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enforce any provisions of this title or the terms of the plan." Numerous courts have recognized that "appropriate equitable relief" to redress violation of the statute can involve "monetary" relief that flows from and is incidental to any declaratory of injunctive relief granted in an ERISA §502(a)(3) action. See, e.g., Bittinger v. Tecumseh Products Co., 123 F.3d 877, 883 (6th Cir. 1997).("[W]e hold that the plaintiffs' request for monetary relief here is incidental and intertwined with their fundamental request for a declaration that they are entitled to fully-funded retiree benefits."). The Tenth Circuit Court of Appeals, citing Bittinger, also has concluded that an order in an ERISA action requiring a plan to pay benefits necessarily depends on a prior determination that there is an entitlement to those benefits under ERISA: What Plaintiffs overlook, however, is the fact they have no entitlement to the benefits unless and until a court exercises its equitable powers to declare Plaintiffs eligible beneficiaries of the plan and thus order Defendants, as fiduciaries, to pay benefits. We are unwilling to presume Plaintiffs are eligible beneficiaries when examining the nature of the remedy they seek. The eligibility determination is the root issue in this case. Absent a favorable ruling (i.e., equitable relief) on that issue, Plaintiffs have no claim for money damages. Consequently, their claim for monetary relief is inextricably intertwined with equitable relief. Adams v. Cyprus Amax Minerals Co., 149 F.3d 1156, 1162 (10th Cir. 1998). See also LaFlamme v. Carpenters Local #£370 Pension Plan, 212 F.R.D. 448, 456-57 (N.D.N.Y. 2003) ("Monetary" relief, in the form of a recalculation of benefits, is available under section 502(a)(3) because it necessarily is incidental to and dependent upon a declaration that defendants' pension plan is in violation of ERISA and an injunction ordering reformation of the plan to comply with the statute).

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Plaintiffs' claims here involve exactly the same pattern. The necessary starting point for the resolution of Plaintiffs' claims will be a determination of whether the benefit accrual formula established by the PEF violates section 204(b)(1)(H) by causing a cessation of benefit accruals and/or a reduction in the rate of benefit accruals for participants because of their age. Only if Plaintiffs succeed in obtaining a favorable decision on that issue will they be in a position to ask the Court for an order requiring Gannett to amend the plan to bring it into compliance with ERISA and an order requiring the Plan to credit class members with accrued benefits in accordance with the reformed plan for periods of service after January 1, 1998. Thus, any order that would require an increase in benefits could arise only if Plaintiffs prevail in obtaining the underlying declaratory and injunctive relief regarding the legality of the PEF. And the amount of any resulting increase in benefits would depend solely on the application of an amended benefit formula to objective, known criteria with respect to all class members, not to their particular subjective circumstances. In addition to any potential "monetary" relief here being substantively incidental to Plaintiffs' claims for declaratory and injunctive relief, any immediate monetary recovery also would be incidental to such claims on a quantitative basis. If Plaintiffs prevail and the Plan is required, either by an injunction or by the need to maintain its tax-qualified status, to credit class members with increases in accrued benefits in order for the Plan to achieve compliance with ERISA, any such increases will affect only the amount of the accrued benefit to which class members will be entitled upon reaching normal retirement age. Class members such as Plaintiffs who are actively employed participants in the Plan, or if retired have not yet received any benefit distribution, at the time any such recalculation is made will not receive anything comparable to

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an immediate damages award. Only class members who began to receive a distribution of their benefits after January 1, 1998 and prior to the time of any recalculation of benefits could be entitled to some immediate monetary recovery, if the amount of benefit they should have received under a lawful formula would have been higher than what they received under the PEF. Accordingly, any monetary effects on class members' accrued benefits that might arise from Plaintiffs' claims unquestionably would be merely incidental to the declaratory and injunctive relief Plaintiffs seek. The "monetary" relief resulting from the Plan being required to recompute benefits is different in both form and substance from the type of extra-contractual damages recoveries ruled to be unavailable under section 502(a)(3) by the Court in Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002), or Mertens v. Hewitt Assocs., 508 U.S. 248 (1993). The possibility of any such monetary recovery in connection with Plaintiffs' claims cannot convert this action that principally seeks declaratory and equitable relief under section 502(a)(3) into a mere damages case. Gannett's effort to portray it as one should be rejected. C. This Action Can and should be Maintained as a Class Action under Rule 23(b)(2).

F.R.C.P. 23(b)(2) provides that a class action may be certified in cases where a defendant is alleged to have "acted or refused to act on grounds generally applicable to the class thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole." This provision of Rule 23 was adopted specifically to facilitate the pursuit of actions such as this seeking injunctive relief from a defendant's established, and allegedly discriminatory, policies that apply in a uniform fashion to a large and broadly defined group of people. See Advisory Committee Notes to 1966 Rule 23 Amendments; Lucas v. Kmart Corp., 2005 WL 1648182 (D. Colo. 2005). Indeed, many courts have held that certification under Rule

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23(b)(2) is appropriate in almost any instance in which injunctive or declaratory relief would be appropriate for the class. Moore's Federal Practice ¶ 23.43[1][a]; see also Federal Practice and Procedure § 1775; DeBoer v. Mellon Mortgage Co.¸ 64 F.3d 1171, 1175 (8th Cir. 1995), cert. denied, 517 U.S. 1156 (1996); Baby Neal for and by Kanter v. Casey, 3 F.3d 48, 58 (3rd Cir. 1994). Gannett argues that Rule 23(b)(2) certification is unavailable because, as has been discussed, it insists that this is an action for damages rather than one for declaratory or injunctive relief. Both the record before the Court and common sense refute this contention. Plaintiffs have asked for declaratory and injunctive rulings in Plaintiffs' favor, which would be required before any class member could be entitled to an increase in accrued benefits. Courts in this and virtually every other Circuit have ruled that the mere fact that some monetary recovery may be incidental to the declaratory or injunctive relief sought does not preclude Rule 23(b)(2) certification. Rich v. Martin Marietta Corp., 522 F.2d 333, 341 (10th Cir. 1975). Certification is generally considered appropriate whenever the claim for declaratory or injunctive relief predominates over or serves as the necessary predicate for any monetary relief. Robinson v. Metro-North Commuter Railroad Co., 267 F.3d 147, 162 (2d Cir. 2001)( Rule 23(b)(2) certification is appropriate where: "(1) even in the absence of a possible monetary recovery, reasonable plaintiffs would bring the suit to obtain the injunctive or declaratory relief sought; and (2) the injunctive or declaratory relief sought would be both reasonably necessary and appropriate were the plaintiffs to succeed on the merits."). Berger v Xerox, 338 F.3d 755, 763 (7th Cir. 2003), involved claims that a plan's payment of lump sums under its cash balance formula did not comply with the applicable benefit

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valuation requirements of ERISA. In his opinion affirming the district court's judgment in favor of the class, Circuit Judge Posner elaborated on why Rule 23(b)(2) certification is appropriate in an ERISA action such as this seeking declaratory relief even though monetary recoveries might flow from that declaratory relief: What is sought is a declaration that Xerox's method of computing the lump sums to which withdrawing employees are entitled is unlawful. That is a ground common to all the members of the class. True, the declaration sought and obtained was merely a prelude to a request for damages (incorrectly described by the plaintiffs as a request for restitutionary relief equitable in nature-the monetary relief sought is not restitutionary, and if it were it would not be equitable, GreatWest Life & Annuity Ins. Co. v. Knudson, supra, 534 U.S. at 213-14, 122 S.Ct. 708; Honolulu Joint Apprenticeship & Training Committee v. Foster, 332 F.3d 1234, 1237-38 (9th Cir. 2003)). But a declaratory judgment is normally a prelude to a request for other relief, whether injunctive or monetary; so there is nothing suspicious about the characterization of the suit as one for declaratory relief. The hope that motivates casting a request for relief in declaratory terms is that if the declaration is granted, the parties will be able to negotiate the concrete relief necessary to make the plaintiffs whole without further judicial proceedings. No one wants an empty declaration. As long as the concrete follow-on relief that is envisaged will if ordered (that is, if negotiations for relief consistent with the declaration break down) be the direct, anticipated consequence of the declaration, rather than something unrelated to it, the suit can be maintained under Rule 23(b)(2). The same rationale supports Rule 23(b)(2) certification here. C. Gannett's Arguments Incorrectly Apply the Requirements of Rule 23(a).

Gannett cites selective snippets culled from an array of class certification decisions to assemble the purported barriers Gannett argues must be overcome in order for Plaintiff to meet the requirements of Rule 23(a). Unfortunately, Gannett makes no effort to describe or analyze the contexts in which the various pronouncements it relies upon were made. For example, Gannett relies heavily upon Gen. Tel. Co. of Southwest v. Falcon, 457 U.S. 147 (1982) to support its argument that class actions are disfavored and can be approved only after rigorous analysis of

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the evidence a plaintiff presents to meet their burden of proving that certification is appropriate. An examination of the Falcon opinion reveals a far less draconian attitude toward class actions. At the outset of the opinion, the Court reaffirmed the position taken in Califano v. Yamasaki, 442 U.S. 682 (1979), that in appropriate circumstances a class action is preferable to separate individual litigation because it "saves the resources of both the courts and the parties by permitting an issue potentially affecting every [class member] to be litigated in an economical fashion under Rule 23." 457 U.S. at 155, quoting Califano. Califano involved claims by Social Security recipients challenging the policies being followed by the government for the recoupment of benefit overpayments. The Court there found that a Rule 23(b)(2) class action was peculiarly appropriate to resolution of such claims. Where the district court has jurisdiction over the claim of each individual member of the class, Rule 23 provides a procedure by which the court may exercise that jurisdiction over the various individual claims in a single proceeding. Finally, we note that class relief for claims such as those presented by respondents in this case is peculiarly appropriate. The issues involved are common to the class as a whole. They turn on questions of law applicable in the same manner to each member of the class. The ultimate question is whether a prerecoupment hearing is to be held, and each individual claim has little monetary value. It is unlikely that differences in the factual background of each claim will affect the outcome of the legal issue. And the class-action device saves the resources of both the courts and the parties by permitting an issue potentially affecting every social security beneficiary to be litigated in an economical fashion under Rule 23.

442 U.S. at 701. The decidedly different circumstances before the Court in Falcon involved claims of racial discrimination in the hiring and promotion of Mexican-Americans. The Court reiterated its awareness "that suits alleging racial or ethnic discrimination are often by their very nature class suits, involving classwide wrongs," and that "[c]ommon questions of law or fact are

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typically present." 457 U.S. at 157. However, it concluded that the very particularized nature of the disparate treatment claim being pursued by the plaintiff with respect to promotions precluded certification of a class involving both promotion and hiring claims. The Court noted however that If petitioner used a biased testing procedure to evaluate both applicants for employment and incumbent employees, a class action on behalf of every applicant or employee who might have been prejudiced by the test clearly would satisfy the commonality and typicality requirements of Rule 23(a). Significant proof that an employer operated under a general policy of discrimination conceivably could justify a class of both applicants and employees if the discrimination manifested itself in hiring and promotion practices in the same general fashion, such as through entirely subjective decision-making processes. Id. at 159. The obvious import of the Falcon decision is that when a plaintiff challenges established and uniformly applied policies or procedures that are alleged to discriminate against a similarly situated group of people, class certification under Rule 23(b)(2) continues to be peculiarly appropriate. Indeed, in cases where plaintiffs challenge allegedly discriminatory policies and procedures, as opposed to particularized discriminatory practices, courts in this and other Circuits routinely relax the requirements of Rule 23(a) in assessing whether to certify a Rule 23(b)(2) class. See, e.g. Horn v. Associated Wholesale Grocers, Inc., 555 F.2d 270, 275 (10th Cir. 1977)("a permissive attitude is reflected by an apparent liberalized application of the Rule 23(a) prerequisites in Rule 23(b)(2) cases." Citing 7 Wright and Miller, Federal Practice & Procedure, Section 1771, at 662-663 (1972)); Jones v. Diamond, 519 F.2d 1090, 1099 (5th Cir. 1975)( Rule 23(a) must be read liberally in discrimination suits where the class action falls under Rule 23(b)(2)). Here, regardless of whether the Rule 23(a) standards are applied routinely or liberally, this action meets the requirements of the rule.

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1.

Numerosity.

A plaintiff need not prove the exact number of potential class members in order to satisfy the numerosity requirement. All that is required is some evidence from which a court can reasonably estimate that the number is sufficient to justify class treatment. Rex v. Owens ex rel. State of Okl., 585 F.2d 432, 436 (10th Cir. 1978). Gannett acknowledges that the Plan had well over 50,000 participants at the beginning of 2002 and that that the PEF applies to "certain of its covered employees." Evidence obtained from Towers-Perrin, the actuarial firm that assisted Gannett in designing the PEF, shows that as of December 31, 1997 the plan had over 25,000 fulltime active participants. [Exhibit 2]5 Towers-Perrin estimated that more than 20,000 of those participants would begin accruing benefits under the PEF upon its adoption. [Exhibit 3] This evidence clearly establishes numerosity. Gannett also semantically quibbles with the class definition by asserting that "Gannett does not routinely determine individuals' `Accrued Benefit' as that term is defined under the Plan §201." [Response at 13]. Presumably this assertion means that administratively Gannett does not physically calculate the Accrued Benefit of participants on an ongoing, regular basis. That fact does not impact the class definition, which relates to the statutory meaning of determination of benefits. The law requires that to be qualified under IRC § 401 the plan must provide for "definitely determinable benefits." Treasury Regulation §1.401-1(b)(1)(i). Dooley v. American Airlines, Inc., 797 F.2d 1447, 1452 (7th Cir. 1986)("This latter requirement is met when the level of employee benefits is computed via a fixed formula and " is not within the

This and several other exhibits were among documents received by Plaintiffs from Towers-Perrin on April 10, 2006, pursuant to a subpoena requesting documents relevant to the development and implementation of the PEF. Counsel for Gannett reviewed those documents prior to their production.

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discretion of the employer. " See Rev. Rul. 74-385, 1974-2 C.B. 130."). This requirement that a participant's accrued benefit be definitely determinable at any point in time applies to so-called hybrid plans in the same fashion that it applies to all other defined benefit plans. Esden v. Bank of Boston, 229 F.3d 154, 166 (2nd Cir. 2000). Thus, to say that benefits "are determined" under a particular plan formula merely means that the formula provides the specific methodology by which to calculate the amount of the accrued benefit an employee has earned as of at any point in time. The use of the term in the proposed class definition here merely indicates that the PEF provides the methodology by which the accrued benefit of a class member is to be determined ­ it does not contemplate or require that the amount of that benefit has actually been physically calculated by Gannett. Finally, Gannett argues that the numerosity requirement is not met as to the first claim for relief because there are no allegations as to the "number of participants whose benefits actually ceased" or the "number of `older' individuals so affected." [Response at 14] No such allegations or proof are necessary to meet the numerosity requirement. For one thing, Plaintiffs are not asking for the certification of a separate sub-class with respect to the first claim. Obviously, only some members of the proposed class ­ those who had earned an accrued benefit under a prior plan formula at the time they became subject to the PEF ­ could have suffered a cessation of benefits upon implementation of the PEF. However, the fact that only some members of the overall class could have suffered one of the harms complained of does not stand in the way of certification of the overall class or require certification of a subclass for those members. Anderson v. City of Albuquerque, 690 F.2d 796, 800 (10th Cir. 1982.)(Recognizing the "well established rule that the claims of all the class need not be identical to those of the plaintiffs.")

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Gannett's suggestion that the initial certification of a class should be limited to those who actually suffered some harm from the practice complained of flies in the face of several established class action principles. First, it is not necessary that all members of a proposed class have actually been injured. Walters v. Reno, 145 F.3d 1032, 1047 (9th Cir. 1998). ("It is sufficient if class members complain of a pattern or practice that is generally applicable to the class as a whole. Even if some class members have not been injured by the challenged practice, a class may nevertheless be appropriate."). Second, courts frown on defining a class in terms of those who actually have suffered from the acts complained of, because such a definition injects questions relating to the merits into the certification question. See Cook v. Rockwell International Corp., 151 F.R.D. 378, 382-83 (D. Colo. 1993); Manual for Complex Litigation, Fourth, §22.2222. 2. Commonality.

With respect to the commonality element of Rule 23(a), Gannett essentially repeats its numerosity argument, contending that to satisfy it a plaintiff must show that all potential class members "have suffered some harm to which common questions of law or fact apply." [Response at 15] The law is otherwise, particularly with respect to class actions under Rule 23(b)(2). The Advisory Committee notes to the 1966 F.R.C.P. amendment that added (b)(2) state: "Action or inaction is directed to a class within the meaning of this subdivision even if it has taken effect or is threatened only as to one or a few members of the class, provided it is based on grounds which have general application to the class." Numerous appeals courts have recognized the same rule in the context of assessing commonality. See Walters v. Reno, 145 F.3d 1032, 1047(9th Cir. 1998); Johnson v. American Credit Co. of Georgia, 581 F.2d 526, 532

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(5th Cir. 1978); Griffin v. Burns, 570 F.2d 1065, 1073, (5th Cir. 1978);Davis v. Weir, 497 F.2d 139, 146, (5th Cir. 1974); Inmates of the Attica Correctional Facility v. Rockefeller, 453 F.2d 12 (2nd Cir. 1971); Norwalk CORE v. Norwalk Redev. Agency, 395 F.2d 920 (2nd Cir. 1968). The subject matter of this case, the rate of benefit accrual under the PEF, certainly has "general application to the class" ­ the terms of the PEF establish that rate for every class member. Moreover, even if harm to every class member were a prerequisite to certification, such harm exists here. In section 502(a)(3) of ERISA, Congress gave every participant in a pension plan the right to sue to enjoin a plan from violating ERISA or to enforce ERISA with respect to a plan, regardless of whether the participant had suffered any actual injury from the challenged conduct. Gillis v. Hoechst Celanese Corp., 4 F.3d 1137, 1148 (3d Cir. 1993) ("ERISA does not require that harm be shown before a plan participant is entitled to an injunction ordering the plan administrator to comply with ERISA's reporting and disclosure requirements"). The conferral of this right recognizes that plan participants have a cognizable interest in assuring that their plan complies with the law ­ violations of ERISA by the plan itself can impact tax qualification or funding, both of which can ultimately affect participants. Accordingly, any alleged violation of ERISA shows sufficient injury to all participants within the meaning of the statute to constitute legal harm. Financial Institutions Retirement Funds v. Office of Thrift Supervision, 964 F.2d 142 (2d Cir. 1992). Thus, this action seeking to enjoin the Plan's alleged violation of ERISA vindicates a statutorily recognized harm suffered by all Plan participants. Gannett also asserts that commonality is lacking because "there are significant factual differences among the proposed class members and among the plaintiffs themselves." [Resp at

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15] This contention is not accurate, but even if it were the existence of such factual differences does not defeat commonality: In determining whether the typicality and commonality requirements have been fulfilled, either common questions of law or fact presented by the class will be deemed sufficient. Factual differences in the claims of the class members should not result in a denial of class certification where common questions of law exist. Penn v. San Juan Hospital, Inc., 528 F.2d 1181, 1189 (10th Cir. 1975); Like v. Carter, 448 F.2d 798, 802 (8th Cir. 1971). As we have stated previously, every member of the class need not be in a situation identical to that of the named plaintiff. Rich v. Martin Marietta Corp., 522 F.2d 333, 340 (10th Cir. 1975) Milonas v. Williams, 691 F.2d 931, 938 (10th Cir. 1982). As is apparent from Gannett's discussion of the merits of this case in its Response, both claims for relief in this case involve an overarching and hotly disputed question of law: Do the terms "benefit accruals" and "rate of benefit accrual" in section 204(b)(1)(H) refer to a participant's statutorily defined accrued benefit, an annuity commencing at normal retirement age? Resolution of that issue, which is central to the question of whether the PEF violates ERISA, will affect the outcome as to every potential class member. It defies common sense to suggest that this basic question concerning the PEF's legality, which is purely a question of law, should be decided in multiple proceedings brought by diverse individuals rather than in one class action. Gannett also argues that commonality is lacking because persons who were Gannett employees at the time the PEF went into effect had accrued pension benefits under differing traditional defined benefit formulae prior to January 1, 1998. This is irrelevant to Plaintiffs' claims. It has no bearing on the basic issue in the second claim for relief of whether the rate of benefit accrual under the basic accrual formula used by the Plan for the vast majority of Plan participants since 1998 decreases because of age. Nor does it affect the first claim, involving the cessation of benefits. The relevant factual question for that claim is whether a participants'

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accrual of benefits ceased for some period of time after January 1, 1998 because the accrued benefit provided under the PEF was less than the value of their prior, protected accrued benefit as of that date, regardless of the prior formula under which that existing accrued benefit had been earned.6 3. Typicality.

Gannet acknowledges that the typicality question focuses on whether the Plaintiffs make "similar legal arguments to prove the defendant's liability" to those upon which other class members would rely." [Resp. at 17] However, Gannett then argues that typicality is lacking because the PEF has a "different impact" on different Plan participants, depending upon objective factual characteristics such as their age, length of service, or their participation in a particular pre-PEF plan. This not-surprising observation does not defeat typicality. The very basis for Plaintiffs' claims is that the PEF provides a different rate of benefit accrual, hence a different impact, for participants depending on differences in their age. Indeed, if a difference in impacts among class members were a bar to class certification, virtually no case alleging race, gender, or age discrimination could ever be certified as a class action. This difference- in- impacts issue raised by Gannett simply rephrases the argument that typicality is lacking when potential class members may have suffered differing amounts of damages. Yet it has long been established that potential differences in damages do not defeat typicality. Gold Strike Stamp Co. v. Christensen, 36 F.2d 791, 798 (10th Cir. 1970) ("The fact

It appears that of the approximately 27,000 active participants in the Plan when the PEF went into effect some 24,000 all accrued benefits under essentially the same traditional defined benefit formula prior to the adoption of the PEF. Fewer than 3,000 of those participants met the requirements for continuing to accrue benefits under the old plan formula. [Exhibit 3]. Even if for some reason the scope of the class should have to be narrowed at some point in the case, their would remain at least 21,000 potential class members who came in to the PEF among whom there were no differences in the prior formula under which they accrued benefits.

6

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that there may have to be individual examinations on the issue of damages has never been held, however, a bar to class actions.") The typicality "requirement may be satisfied even though varying fact patterns support the claims or defenses of individual class members or there is a disparity in the damages claimed by the representative parties and the other members of the class." Schwartz 178 F.R.D. at 551. Gannett's attempts to exalt potential factual differences over the central common issue in this case ­ whether the Plan's formula complies with ERISA ­ should be rejected. As this Court has ruled: "certain factual variations may exist among the plaintiffs' claims, these variations are insufficient to defeat the class on typicality grounds." In re Storage Technology Corp. Securities Litigation, 113 F.R.D. 113, 117 (D. Colo. 1986). 4. Adequacy of Representation. Gannett does not seriously challenge the competence of counsel or the suitability of the Plaintiffs as representatives for the proposed class. Instead, Gannett faults Plaintiffs for not having submitted evidence to demonstrate their willingness to prosecute the litigation vigorously and fairly for the benefit of the class. Gannett also suggests, without explanation, that conflicts exist between Plaintiffs and members of the proposed class. Neither of these contentions should affect the outcome here. Courts generally presume that the adequacy requirement is met, and any doubt regarding adequacy of representation should be resolved in favor of upholding the class. Schwartz, 178 F.R.D. at 552. Plaintiffs have alleged in their Amended Complaint that they will fairly and adequately represent the class and have retained competent and experienced counsel to prosecute this action. Nothing further is required and Gannett has not presented any basis for finding inadequacy here.

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IV. CONCLUSION Gannett has presented a technical, shotgun opposition to class certification that glosses over the fundamental nature of this case. Plaintiffs are challenging an established benefit accrual formula under which the Plan has computed benefits for more than 20,000 potential class members since January 1, 1998. Plaintiffs claim that the formula, in and of itself, violates ERISA's age discrimination prohibition. Resolution of that question of law requires no factual inquiry concerning specific class members ­ it is fundamentally a question of law. The discrimination alleged is formulaic and its impact on any particular class member is readily ascertainable by applying objective criteria ­ it does not depend on any subjective factual characteristics. If Plaintiffs prevail with respect to liability, Gannett must by necessity amend the Plan to eliminate the benefit shortfalls caused by the discriminatory formula. In short, this case contains the quintessential elements supporting class litigation. This Court has recognized the need for a practical as opposed to an overly technical approach to class certification: Confronted with a class of purchasers allegedly defrauded over a period of time by similar misrepresentations, courts have taken the common sense approach that the class is united by a common interest in determining whether a defendant's course of conduct is in its broad outlines actionable, which is not defeated by slight differences in class members' positions, and that the issue may profitably be tried in one suit. In re Storage Technology Corp. Securities Litigation, 113 F.R.D. at 115. This case warrants the same common-sense approach. Dated: April 20, 2006.

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s/ Robert F. Hill_________________ Robert F. Hill John H. Evans John F. Walsh Hill & Robbins, P.C. 100 Blake Street Building 1441 Eighteenth Street Denver, CO 80202 Telephone: (303) 296-8100 FAX: (303) 296-2388 Email: [email protected] [email protected] [email protected] Attorneys for Plaintiff Johnny Wells et.al.

CERTIFICATE OF SERVICE I hereby certify that on April 20, 2006 I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: Michael S. Beaver Greg Eurich Parker W. Dragovich Kerri J. Atencio Holland & Hart LLP 8390 East Crescent Parkway Suite 400 Greenwood Village CO 80111 [email protected] [email protected] [email protected] [email protected] and I hereby certify that I have mailed or served the document or paper to the following non CM/ECF participants in the manner indicated by the non-participant's name: Margaret A. Clemens Nixon Peabody LLP Clinton Square, P.O. Box 31051 1300 Clinton Square

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Rochester, NY 14603-1051 s/Robert F. Hill_______________________ Attorneys for Johnny Wells, et. al. John H. Evans John F. Walsh Hill & Robbins, P.C. 100 Blake Street Building 1441 Eighteenth Street Denver, CO 80202 Telephone: (303) 296-8100 FAX: (303) 296-2388 Email: [email protected] [email protected] [email protected]

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