Seventh Circuit Holds that Exhaustion Not Required for Unnamed ERISA Class Members

BNA’s Class Action Litigation (Volume 07 Number 06, Fri., Mar. 24, 2006, Page 183, ISSN 1529-8000) is reporting on In re Household Int’l Tax Reduction Plan, --- F.3d ----, 2006 WL 688969 (7th Cir. Mar. 20, 2006): "Unnamed class members in an Employee Retirement Income Security Act class action are not required to exhaust their administrative remedies before the case can be certified as a class action. . . ."

In its opinion the Circuit Court stated:

If the complaint or subsequent filings adequately identify the class members' claims and demonstrate that they are indeed very similar to those of the named plaintiff, the defendant knows what he is facing and can make efforts to settle the full array of claims. In such a case, requiring exhaustion by the individual class members would merely produce an avalanche of duplicative proceedings and accidental forfeitures, and so is not required.

This is emphatically the case when dealing with class actions under ERISA, where, there being no statutory requirement of exhaustion, the district court has discretion to require no exhaustion by anyone. Powell v. A.T. & T. Communications, Inc., 938 F.2d 823, 825 (7th Cir.1991); Gallegos v. Mount Sinai Medical Center, supra, 210 F.3d at 808.

BNA has a full discussion of the case, which is available to BNA subscribers by clicking here.