Vigeant v. Meek et al
Filing
82
ORDER: (1) Defendants Lifetouch, Board of Directors and Trustees' motion to dismiss [ECF No. 56 ] is GRANTED. (2) Defendant Newport Trusts' motion to dismiss [ECF No. 50 ] is DENIED AS MOOT. (3) This action is DISMISSED WITH PREJUDICE. (Written Opinion) Signed by Judge Joan N. Ericksen on 11/7/2018. (CBC)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Deborah Vigeant, Rhonda Wood,
Elizabeth Millane, Douglas
Eckelbecker, Amanda Eckelbecker,
Rodney Uting, and Lawrence Anderson,
and all other individuals similarly situated,
Plaintiffs,
v.
Case No. 18-cv-577 (JNE/TNL)
ORDER
Michael Meek, Paul Harmel, P. Robert
Larson, Donald Goldfus, John Anderson,
Bruce Nicholson, Bernie Alrich, Ted
Koenecke, Glenn Elo, Newport Trust
Company, and Lifetouch Inc.,
Defendants.
Plaintiffs brought a class action to recover the hundreds of millions of dollars lost
when Lifetouch’s stock value declined. Under Section 502 of the Employee Retirement
Income Security Act (“ERISA”), Plaintiffs claim that this loss resulted from breaches of
fiduciary duties by Lifetouch, Lifetouch’s Board of Directors, and Lifetouch Trustees
directly responsible for managing the Employee Stock Ownership Plan (“ESOP”). All
Defendants moved to dismiss the claims under Federal Rule of Civil Procedure 12(b)(6)
for failure to state a claim. Subsequently, Plaintiffs voluntarily dismissed the action
against Defendant Newport Trust, a Lifetouch Trustee, pursuant to Rule 41(a)(1)(A)(i).
Therefore, only the claims against Lifetouch, the Board of Directors (“Directors”), and
Trustees Ted Koenecke and Glenn Elo remain. As set forth below, the Court grants
Defendants’ motion to dismiss.
1
BACKGROUND
Lifetouch is a professional photography company focused primarily on school
pictures. Until its recent sale to Shutterfly, Lifetouch was 100% owned by its employees
through an ESOP sponsored by Lifetouch (“the Plan”). Lifetouch made all contributions
to the Plan and the Plan invested primarily in shares of Lifetouch stock. According to the
Summary Plan Description, Defendant Lifetouch—the Plan Administrator—was
responsible for managing the Plan and communicating with Plan participants. Under the
terms of the Trust Agreement, Lifetouch’s Directors appointed a Trustee, who had
exclusive authority to manage the Plan assets in the trust. Defendants Ted Koenecke and
Glenn Elo, Lifetouch senior executives, served as Trustees through May 2017.
Lifetouch made cash distributions to ESOP participants upon their retirement. In
the event of a distribution, Lifetouch stock was repurchased at the fair market value
determined by the Trustees on the June 30th immediately preceding the repurchase date.
Because Lifetouch was a private company, its share price could not be determined on
publicly traded markets. For that reason, the Plan required the Trustees to value
Lifetouch stock annually. The Trustees appointed and relied on the opinion of an
independent appraiser to determine the fair market value.
Starting in 2015, Lifetouch struggled financially as new technologies transformed
the professional photography industry and consumer tastes. In 2015 and 2016, Lifetouch
suffered repeated financial setbacks. Lifetouch closed J.C. Penney and Target brick-andmortar portrait studio locations. In November 2015, Lifetouch closed an entire
production facility in North Carolina and laid off 206 employees. Additionally, several
2
Lifetouch senior executives retired, culminating in the retirement of then-CEO Paul
Harmel in July 2016. In August of 2016, the StarTribune, a major Minnesota newspaper,
published an article about Lifetouch’s struggles to stay relevant, adapt to modern
technology, and satisfy consumer needs.
During this time, Lifetouch’s stock value decreased. On June 30, 2015, the
Trustees valued Lifetouch stock at $93 per share, a 10% decrease from the 2014
valuation. On June 30, 2016 the Trustees valued Lifetouch stock at $88 per share, a 5%
decrease from the previous year’s valuation. On June 30, 2017, the Trustees valued
Lifetouch stock at $56 per share, a 36% decrease from the previous year.
Lifetouch’s financial troubles continued. On January 30, 2018, CEO Michael
Meek explained in a StarTribune article that Lifetouch had put itself up for sale because
growth had slowed, and Lifetouch was not generating enough cash flow to invest in new
technologies and other areas of business. That same month, Shutterfly announced it was
acquiring Lifetouch for $825 million plus unspecified cash and investments. After
receiving a fairness opinion from a third-party financial advisor, Trustee Newport Trust
reviewed and approved the sale price. 1 Lifetouch’s sale terminated the Plan and
commenced the distribution of proceeds to participants.
1
According to the Amended Complaint, Evercore Trust Company was the Trustee
starting in May 2017, and its assets were acquired by Newport Trust Company as of
October 18, 2017. Am. Compl. ¶ 43. Plaintiffs alleged that Newport Trust breached its
fiduciary duties to Plan participants by approving the $825 million acquisition of
Lifetouch by Shutterfly. Id. ¶ 70. Plaintiffs subsequently dismissed Newport Trust from
the suit. ECF No. 79. Accordingly, the Court will not address this claim because
Plaintiffs did not allege that any of the remaining Defendants breached their fiduciary
duties by approving this sale.
3
LEGAL STANDARD
To survive a Rule 12(b)(6) motion, “a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). A complaint “does not need detailed factual allegations,” but it must
contain “more than labels and conclusions.” Twombly, 550 U.S. at 555. “A claim has
facial plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal,
556 U.S. at 678. But if the pled facts are merely consistent with liable acts, the complaint
“stops short of the line between possibility and plausibility.” Meiners v. Wells Fargo &
Co., 898 F.3d 820, 822 (8th Cir. 2018) (quoting Iqbal, 556 U.S. at 678).
The principal duties owed by Plan fiduciaries are prudence and loyalty. Braden v.
Wal-Mart Stores, Inc., 588 F.3d 585, 595 (8th Cir. 2009). The duty of prudence requires
that the fiduciary act “with the care, skill, prudence, and diligence.” 29 U.S.C. §
1104(a)(1)(B). The duty of loyalty requires that the fiduciary discharge his duties “solely
in the interests of the participants and beneficiaries.” Id. § 1104(a)(1). While plaintiffs
“must offer sufficient factual allegations to show that he or she is not merely engaged in a
fishing expedition,” the court “must also take account of [plaintiffs’] limited access to
crucial information” when pleading ERISA claims. Braden, 588 F.3d at 598.
In Fifth Third Bancorp v. Dudenhoeffer, 134 S. Ct. 2459, 2470 (2014), the
Supreme Court outlined a court’s task in separating the “plausible sheep from the
meritless goats” in a breach of fiduciary duty action under ERISA. That task requires
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“careful, context-sensitive scrutiny” of a plaintiff’s allegations. Id. Moreover, a plaintiff
fails to state a claim by alleging “from the vantage point of hindsight” that fiduciaries
could have better managed an ESOP’s investments. In re Target Corp. Sec. Litig., 275 F.
Supp. 3d 1063, 1087 (D. Minn. 2017). Finally, given the difficulty in valuing ESOP
privately-held stock, courts review such valuations deferentially. See Armstrong v.
LaSalle Bank Nat’l Ass’n, 446 F.3d 728, 733 (7th Cir. 2006) ( “We must not seat ESOP
trustees on a razor’s edge.”); see also Kool v. Coffey, 300 F.3d 340, 362-63 (3d Cir. 2002)
(acknowledging “the extremely difficult task of valuing the stock of a company which is
privately owned”).
DISCUSSION
I.
Duty of Prudence
Plaintiffs allege two breach of prudence claims. First, Plaintiffs claim that that the
Trustees and other “senior executives” manipulated data provided to the independent
appraiser to inflate Lifetouch’s stock value in 2015 and 2016. 2 Second, Plaintiffs assert
that Defendants should have investigated the evident discrepancy between the 2015 and
2016 valuations and Lifetouch’s financial reality and removed imprudent investments.
2
In their Amended Complaint, Plaintiffs allege that the Trustees and “senior executives”
manipulated the data. Am. Compl. ¶¶ 61-62. However, in their Opposition to
Defendants’ Motions to Dismiss, Plaintiffs state that “the Board Defendants and
Lifetouch manipulated the data used to determine the value of Lifetouch’s stock.” Pls.’s
Opp’n to Defs.’ Mot. to Dismiss 8, ECF No. 72. “In reviewing a Rule 12(b)(6) motion, a
court accepts as true all factual allegations in the complaint.” Morrison v. MoneyGram
Int’l, Inc., 607 F. Supp. 2d 1033, 1045 (D. Minn. 2009). Given the discrepancy between
the Plaintiffs’ allegations in the Amended Complaint and Plaintiffs’ motion, the Court
relies on the allegations as pleaded in the Amended Complaint.
5
A.
Defendants Artificially Inflated Lifetouch’s Stock Value in 2015 and 2016
Defendants argue that Plaintiffs fail to plead that Lifetouch’s stock was overvalued
in 2015 and 2016. First, Defendants assert that Plaintiffs do not plead with particularly,
under Rule 9(b), that the Trustees fraudulently inflated Lifetouch’s stock value. Second,
Defendants argue that Lifetouch’s stock drop in 2017 does not plausibly suggest that
Defendants overvalued Lifetouch stock in 2015 and 2016. For the following reasons, the
Court agrees.
1.
Pleading Standard
The parties disagree as to what pleading standard applies. Defendants argue that
Plaintiffs must plead the fraud-based allegation of data manipulation with particularity, as
required by Rule 9(b). Although Rule 9(b) is not generally applied to ERISA claims,
several district courts in this circuit have applied the heightened pleading requirement
where fraudulent conduct is the basis of the alleged breach. Crocker v. KV Pharm. Co.,
782 F. Supp. 2d 760, 784 (E.D. Mo. 2010) (collecting cases); In re ADC
Telecommunications, Inc., ERISA Litig., No. 03-2989, 2004 WL 1683144, at *3 (D.
Minn. July 26, 2004) (“Plaintiffs’ non-specific claims that certain Defendants engaged in
‘a scheme to deceive’ by improperly booking revenues to inflate stock value do not
supply adequate detail to meet the particularity requirements of who, what, when, where,
and how.”). These decisions comport with Eighth Circuit precedent that Rule 9(b)
applies to claims “grounded in fraud.” Streambend Props. II, LLC v. Ivy Tower Mpls.,
LLC, 781 F.3d 1003, 1010 (8th Cir. 2015).
6
Plaintiffs nevertheless contend that ERISA claims need only be pleaded consistent
with Rule 8. However, the cases cited by Plaintiffs are distinguishable. These cases
involve claims that fiduciaries failed to disclose information about the truth of the stock’s
value. See Jander v. Int’l Bus. Machines Corp., 205 F. Supp. 3d 538, 543 (S.D.N.Y.
2016) (plaintiffs alleging that defendants were aware of misleading statements but “did
nothing to act upon that knowledge to protect the retirement savings of the Plan
participants”); In re Elec. Data Sys. Corp. “ERISA” Litig., 305 F. Supp. 2d 658, 672
(E.D. Tex. 2004) (“Plaintiffs have alleged breach of a fiduciary duty to inform.”).
The Court will apply Rule 9(b) to Plaintiffs’ claims of fraudulent data
manipulation. This alleged conduct—providing inaccurate and misleading information to
the independent appraiser—sounds in fraud. Moreover, Plaintiffs do not allege that the
Trustees simply had knowledge of and failed to disclose fraud; they allege that they
breached their duty by committing fraud. Courts have accepted this “knowledge of
fraud/commission of fraud distinction” when determining whether to apply Rule 9(b) to a
plaintiff’s claims. In re ADC Telecommunications, 2004 WL 1683144, at *3.
Consequently, the heightened Rule 9(b) pleading standard applies to Plaintiffs’ claim that
the Trustees manipulated the stock value. The remaining allegation—Defendants’
failures to investigate and remove imprudent investments—is not based on fraudulent
conduct, and thus, Rule 9(b) does not apply to the second claim.
2.
Fraudulent Misrepresentation
Rule 9(b) provides that “[i]n alleging fraud . . . a party must state with particularity
the circumstances constituting fraud.” Fed. R. Civ. P. Rule 9(b). Pleading with
7
particularity requires describing matters such as “the time, place and contents of false
representations” and who made the misrepresentation. Parnes v. Gateway 2000, 122
F.3d 539, 549 (8th Cir. 1997). Required facts include the “who, what, when, where and
how surrounding the alleged fraud . . . and what was obtained as a result.”
OmegaGenesis Corp. v. Mayo Found. for Med. Educ. & Research, 851 F.3d 800, 804
(8th Cir. 2017) (quoting Quintero Cmty. Ass’n Inc. v. F.D.I.C., 792 F.3d 1002, 1010 (8th
Cir. 2015).
Plaintiffs fail to meet this standard. Plaintiffs allege that “senior executives”
fraudulently mispresented the number of photo sittings to increase Lifetouch’s value.
Am. Compl. ¶ 61. For example, “if Lifetouch booked a family of five for a photoshoot,
instead of marking that shoot as one ‘sit,’ Lifetouch would count it as six—one for the
family, and then one for each individual member of the family.” Id. Lifetouch also
counted expensive photoshoots “in faraway places” as photo sittings even though “the
profit from the shoot could not justify the expense of the travel.” Id. But the Complaint
does not identify which executives were involved. The Complaint also does not allege
that this was a new practice implemented to inflate the stock value in 2015, that the
Trustees or independent appraiser relied on these numbers to determine the stock price, or
that such counting practices could have had a discernable impact on stock price.
Moreover, the Complaint does not explain why this method of counting photo sittings
was misleading, violated accounting rules, or was otherwise improper. Thus, Plaintiffs
fail to plead fraudulent stock inflation with particularity.
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3.
Artificial Inflation
When inadequate allegations of fraud are made, courts ignore the allegations that
do not comply with Rule 9(b) and examine the remaining allegations to determine
whether they state a claim. See In re NationsMart Corp. Sec. Litig., 130 F.3d 309, 315
(8th Cir. 1997) (“The only consequence of a holding that Rule 9(b) is violated with
respect to a § 11 claim would be that any allegations of fraud would be stripped from the
claim.”). To state a breach of prudence claim, plaintiffs must plausibly allege that the
fiduciary’s decision-making process was flawed. Braden, 588 F.3d at 595-97. That
showing can be made with allegations directly challenging the process or indirectly
suggesting a flawed process and unlawful conduct. Id. Plaintiffs do not directly contest
the soundness of this process, since the Trustees relied on the opinion of an independent
appraiser in valuing the stock. Rather, Plaintiffs ask the Court to infer a flawed process.
Removing the allegations of fraudulent manipulation, Plaintiffs’ artificial inflation
claim is based on the following. Plaintiffs allege that Lifetouch experienced serious
financial problems in 2015 and 2016. Further, Plaintiffs assert that no negative events
occurred internally at Lifetouch in 2017 that would have materially impacted Lifetouch’s
value. Yet, Lifetouch’s stock value did not drop dramatically until 2017. Therefore, say
Plaintiffs, Defendants must have overvalued the 2015 and 2016 stock price and withheld
Lifetouch’s economic struggles to maintain these artificially inflated values. Am.
Compl. ¶¶ 16, 56, 60, 78, 115.
Plaintiffs contend that they state a plausible claim by inferring overvaluation from
a stock drop, especially given that they are not sophisticated parties and have not had the
9
benefit of discovery. However, while courts should consider the Plaintiffs’ “limited
access to crucial information,” it still must be reasonable for the court “to infer from what
is alleged that the process was flawed.” Id. at 596, 598. The court in Braden clarified
that “[a]n inference pressed by the plaintiff is not plausible if the facts he points to are
precisely the result one would expect from lawful conduct in which the defendant is
known to have engaged.” Id. at 597.
Consequently, the Court finds implausible the proffered inference that Lifetouch’s
stock price was artificially inflated in 2015 and 2016. Plaintiffs argue that Lifetouch’s
stock value was not negatively impacted in 2017 while at the same time alleging that
Lifetouch stock was a risky investment because Lifetouch failed to adapt to new
technology and consumer needs. By late 2017, Lifetouch had put itself up for sale.
Given the financial hardship alleged by Plaintiffs, a drop in Lifetouch’s stock value in
2017 is a “result one would expect from lawful conduct.” Id. For these reasons,
Plaintiffs fail to state a claim that Defendants overvalued Lifetouch stock in 2015 and
2016.
B.
Defendants Failed to Properly Investigate and Remove Imprudent
Investments
Defendants challenge this claim because a Plan fiduciary is “under no duty to
diversify the ESOP’s holdings” and sell company stock when business difficulties arise.
Dudenhoffer, 134 S. Ct. at 2467, 2472. Defendants assert that it is only imprudent for
ESOP fiduciaries to continue to invest in employer stock if an investment is excessively
risky. Morrison v. MoneyGram Int’l, Inc., 607 F. Supp. 2d 1033, 1053 (D. Minn. 2009).
10
Defendants contend that excessive risk is a high threshold. Indeed, other circuits have
held that “[m]ere stock fluctuations . . . even those that trend downhill significantly, are
insufficient to establish the requisite imprudence.” Wright v. Or. Metallurgical Corp.,
360 F.3d 1090, 1096, 1099 (9th Cir. 2004) (no duty to diversify during an approximately
75% drop in stock value); see also Kuper v. Iovenko, 66 F.3d 1447, 1451, 1459 (6th Cir.
1995) (same during 80% drop).
Plaintiffs respond that fiduciaries have a “continuing duty of some kind to monitor
investments and remove imprudent ones.” Tibble v. Edison Int’l, 135 S. Ct. 1823, 1829
(2015). Fiduciaries breach this duty when they fail to investigate whether an investment
is imprudent after changed financial circumstances increase the risk of holding stock. See
Armstrong, 446 F.3d at 734 (“A trustee who simply ignores changed circumstances that
have increased the risk of loss to the trust’s beneficiaries is imprudent.”). Plaintiffs
contend that Defendants failed to regularly monitor the prudence of the Plan’s investment
in the face of contemporaneous warning signs. Therefore, Plaintiffs conclude that that
they have adequately alleged that Defendants failed to monitor and remove imprudent
investments under Tibble. See Brannen v. First Citizens Bankshares Inc., No. 6:15-CV30, 2016 WL 4499458, at *6 (S.D. Ga. Aug. 26, 2016) (holding that plaintiffs stated a
claim where defendants “never conducted an investigation into whether the Plan should
continue investing in Company Stock” after the stock value dropped 50% in six months).
The Court holds that Plaintiffs do not plausibly plead an imprudent investment
claim under Tibble. First, according to Plaintiffs’ own allegations, Defendants did
regularly monitor the Plan’s investment. The Complaint states that the Trustee annually
11
determined the fair market value of Lifetouch stock with the opinion of an independent
appraiser. This annual valuation of Lifetouch is inconsistent with Plaintiffs’ assertion
that Defendants conducted absolutely no monitoring of the Plan’s investment in the face
of changed financial circumstances.
Moreover, Lifetouch’s stock was not so risky as to make the company stock an
imprudent investment. Employer stock is excessively risky when the company is on the
verge of collapse. The cases cited by Plaintiffs support this conclusion. In MoneyGram,
the stock had lost 92% of its value and the SEC was investigating the company’s
accounting practices. 607 F. Supp. 2d at 1053. In In re ADC Telcoms., Inc., the stock
had lost 95% of its value and the company suffered “a large scale worldwide layoff.”
2004 U.S. Dist. LEXIS 14383, *5 (D. Minn. July 26, 2004).
The financial hardship described in the Complaint does not amount to the financial
collapse described in MoneyGram and ADC Telcoms. Plaintiffs allege that the stock
value dropped a little over 50% from 2014 to 2017, that Lifetouch closed brick-andmortar portrait studio locations and a production facility laying off 206 employees, that
many Lifetouch senior executives retired, and that Lifetouch failed to adapt to new
technology and consumer needs. These facts demonstrate financial hardship, but not a
company on the verge of collapse. Although Lifetouch faced these financial setbacks, the
company was valued at and sold for over $800 million in 2018. Accordingly, Plaintiffs
fail to state an imprudent investment claim.
12
II.
Duty to Monitor
Plaintiffs allege that Directors and Lifetouch breached their duty to monitor the
Trustees. Fiduciaries have a duty to monitor their appointees, which includes a duty to
act if they discover that the appointed fiduciaries are performing improperly. Crocker,
782 F. Supp. 2d at 787. Plaintiffs assert that Directors and Lifetouch should have
pressured the Trustees to investigate the true value of Lifetouch stock or removed the
Trustees from their positions.
Defendants argue that the Court should dismiss Plaintiffs’ monitoring claim
because it is derivative of Plaintiffs’ prudence claim. The Court agrees. Plaintiffs’
failure to plausibly allege any breach by the Trustees precludes the monitoring claim.
See Target, 275 F. Supp. 3d at 1093 (collecting cases) (“Plaintiffs cannot maintain a
claim for breach of the duty to monitor . . . absent an underlying breach of the duties
imposed under ERISA.”). Therefore, the Court dismisses Plaintiffs’ failure to monitor
claim.
III.
Duty of Loyalty
Plaintiffs assert that Directors and Lifetouch breached their duty of loyalty by
artificially inflating Lifetouch stock in 2015 and 2016 so that multiple senior executives
were able to retire and cash out in part or in whole at an artificially high stock price.
Defendants argue that this claim should be dismissed because it relies on the implausible
allegation that senior executives manipulated Lifetouch’s stock price.
Fiduciaries must discharge their duties “solely in the interest of the participants
and beneficiaries of the plans.” Bigger v. Am. Commercial Lines, 862 F.2d 1341, 1346
13
(8th Cir. 1988). “Because the potential for disloyal self-dealing and the risk to the
beneficiaries from undiversified investing are inherently great when insiders act for a
closely held corporation’s ESOP, courts should look closely at whether the fiduciaries
investigated alternative actions and relied on outside advisors.” Martin v. Feilen, 965
F.2d 660, 670-71 (8th Cir. 1992).
Plaintiffs fail to allege self-dealing for the following reasons. First, Plaintiffs did
not plausibly allege that senior executives manipulated the financial data. Second, the
Trustees relied on an independent appraiser to evaluate the stock value. Third, it is not
surprising nor suggestive of malfeasance that senior executives would depart a company
experiencing financial hardship. As discussed above, there is no inference of wrongdoing
from actions that “one would expect.” Braden, 588 F.3d at 597.
Moreover, Plaintiffs’ loyalty claim largely repeats the allegations of their prudence
claim. Because the Court found the artificial inflation claim implausible, the Court also
concludes that Plaintiffs’ derivative loyalty claim fails. Target Corp. Sec. Litig., 275 F.
Supp. 3d at 1090. Thus, the Court dismisses the duty of loyalty claim.
IV.
Dismissal With Prejudice
Rule 12(b)(6) dismissals are typically entered with prejudice. Phx. Entm’t
Partners, LLC v. Star Music, Inc., 2017 U.S. Dist. LEXIS 195497, at *14 (D. Minn. Nov.
28, 2017) (collecting cases); 2 Moore’s Federal Practice § 12.34(5) (“dismissal for failure
to state a claim is . . . typically entered as a dismissal with prejudice”). Dismissals with
prejudice occur where “no amount of re-pleading will cure [the] deficiencies.” Smith v.
Conway, 2016 U.S. Dist. LEXIS 122632, at *5 (D. Minn. Sep. 9, 2016).
14
Plaintiffs request a dismissal without prejudice. Plaintiffs explain that Shutterfly
filed forms with the SEC on the same day that Plaintiffs filed their Amended Complaint
and that these filings provide new information about Defendants’ motivation for
artificially inflating Lifetouch’s stock price. Plaintiffs would amend their complaint to
include data summarizing the number of shares executed by senior executives in 2015,
2016 and 2017.
Defendants argue that this data does not support the claim that Lifetouch’s stock
price was manipulated. The Court agrees. The data supports Plaintiffs’ claim that senior
executives were leaving the company in 2015 and 2016, but this fact on its own does not
suggest malfeasance. As discussed above, it is not surprising that senior executives
would depart a company experiencing financial hardship. Because Plaintiffs’ proposed
amendment would not cure Plaintiffs’ failure to state a claim, the Court dismisses the
action with prejudice.
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CONCLUSION
Based on the files, records, and proceedings herein, and for the reasons stated
above, IT IS ORDERED THAT:
1.
Defendants Lifetouch, Board of Directors and Trustees’ motion to dismiss [ECF
No. 56] is GRANTED.
2.
Defendant Newport Trusts’ motion to dismiss [ECF No. 50] is DENIED AS
MOOT.
3.
This action is DISMISSED WITH PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: November 7, 2018
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge
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