Oetting v. Green Jacobson, P.C., et al.
MEMORANDUM AND ORDER re: 43 MOTION to Reopen Case MOTION to Set Aside Order/Judgment filed by Plaintiff David P. Oetting - IT IS HEREBY ORDERED that Oettings motion for relief from final judgment, to reinstate the action, and for leave to amend the complaint (#43) is DENIED. Signed by District Judge Stephen N. Limbaugh, Jr on 1/8/2018. (JMC)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
DAVID P. OETTING
GLEN A NORTON,
as Receiver for GREEN JACOBSON,
P.C., et al.,
Case No. 4:13-CV-1148-SNLJ
MEMORANDUM AND ORDER
This matter is before the Court on plaintiff David Oetting’s motion for relief from
final judgment, to reinstate the action, and for leave to amend the complaint (#43). The
motion is briefed and ripe. Oetting’s motion for relief from final judgment is denied.
The history of this case is complex and spans several years. After NationsBank
Corporation and BankAmerica Corporation merged, shareholders of both filed class
action lawsuits. The multidistrict litigation cases were consolidated and transferred to the
Eastern District of Missouri. See In re Bank of America Corp. Secs. Litig., 4:99-MD1264-CDP (E.D. Mo.) (“Main Action”). The court appointed Oetting as the lead plaintiff
and Green Jacobson as lead counsel for the class. The Main Action settled, and the court
appointed a claims administrator to distribute the settlement fund to the class member
claimants. With this distribution came many problems.
One of these problems was a letter that Green Jacobson attached to the settlement
checks. The letter included an exculpatory clause, and by endorsing or signing the
settlement check, a class member released all persons from all claims in connection with
the litigation. At no point did the court approve using this exculpatory clause. Because
of the exculpatory clause, and its unknown effects, Oetting never cashed his settlement
In 2013, Oetting filed this separate class action, alleging that class counsel
committed legal malpractice and breached its fiduciary duty. Class counsel moved to
dismiss, arguing Oetting did not have standing to pursue those claims. This Court agreed
and dismissed the case (#21). Oetting v. Green Jacobson, P.C., No. 4:13-CV-1148-CEJ,
2014 WL 942952, at *4 (E.D. Mo. Mar. 11, 2014) (“Dismissal Order”), aff’d sub nom.
Oetting v. Norton, 795 F.3d 886 (8th Cir. 2015). First, this Court held that Oetting did
not have standing to pursue the legal-malpractice claims: “Plaintiff never cashed his
settlement checks, and therefore was not injured by the fact that those checks were
slightly smaller than they would have been had defendants hired a different claims
administrator.” Id. at *2. Second, this Court held that Oetting’s breach-of-fiduciary-duty
claims were collaterally estopped. Id. at *4.
Next, Oetting appealed the Dismissal Order. The Eighth Circuit agreed that
Oetting lacked standing, but for a different reason. Oetting v. Norton, 795 F.3d 886, 890
(8th Cir. 2015). The Eighth Circuit disagreed with this Court’s conclusion that Oetting
was uninjured because checks he never cashed were smaller than they should have been.
Id. The Eighth Circuit concluded Oetting lacked standing
because (i) all the damages and disgorged fees being sought would be
recovered into the NationsBank class settlement fund in the [M]ain
[A]ction; (ii) the putative class represented in this case, as defined in the
complaint, is a subclass of the NationsBank class, namely, those who “have
or are to receive a distribution from” the settlement fund; and (iii) the
district court’s June 14, 2004, and February 4, 2005, orders in the [M]ain
[A]ction expressly provided that further distributions from the settlement
fund would be limited to “Authorized Claimants who have cashed their
checks.” By defining the class in this case as being those who “have or are
to receive” distributions from the settlement fund, Oetting excluded himself
from the class.
Id. The Eighth Circuit also observed that “Oetting could have commenced this action on
behalf of the entire class by seeking to invoke the district court’s ancillary jurisdiction in
the [M]ain [A]ction. . . . [H]is status as class representative would doubtless have
provided standing to represent the class . . ., despite his failure to cash prior settlement
checks.” Id. at 890–91.
Then, Oetting filed a motion in the Main Action to have settlement checks issued
or reissued to him. Oetting asked for relief pursuant to Rule 6(b)(1)(B), which allows a
court to extend the time by which an act must be done if the party failed to act because of
excusable neglect. Almost two years later, the court granted Oetting’s motion. In re
Bank of Am. Corp. Sec. Litig., No. 4:99-MD-1264-CEJ, 2017 WL 3232579, at *6 (E.D.
Mo. July 31, 2017) (“Main Action Reissuance Order”). Finally, one month later, Oetting
filed this motion (#43), asking for relief from this Court’s Dismissal Order.
Rule 60(b) of the Federal Rules of Civil Procedure allows a court to “relieve a
party . . . from a final judgment, order, or proceeding . . . .” “Rule 60(b) ‘provides for
extraordinary relief which may be granted only upon an adequate showing of exceptional
circumstances.’” Graham v. Hubbs Mach. & Mfg., Inc., 49 F. Supp. 3d 600, 608 (E.D.
Mo. 2014) (quoting Robinson v. Armontrout, 8 F.3d 6, 7 (8th Cir. 1993)). “Rule 60(b) is
a motion grounded in equity and exists ‘to prevent the judgment from becoming a vehicle
of injustice.’” Harley v. Zoesch, 413 F.3d 866, 870 (8th Cir. 2005) (quoting MIF Realty
L.P. v. Rochester Assocs., 92 F.3d 752, 755 (8th Cir. 1996)). A district court has
discretion when deciding a Rule 60(b) motion. See id. (reviewing for abuse of
Oetting grounds his arguments in three subsections of Rule 60(b). The Court takes
each in turn.
Rule 60(b)(5) allows a court to relieve a party from a final judgment if “it is based
on an earlier judgment that has been reversed or vacated; or applying it prospectively is
no longer equitable . . . .”
First, Oetting argues that relief is appropriate under Rule 60(b)(5) because the
Main Action Reissuance Order “effectively reverse[s]” the Dismissal Order. Oetting’s
argument seems to be this: “the Court held that I did not have standing to bring this suit
because I was not a member of the class that I defined in the complaint. Now, because
the court in the Main Action ordered my checks to be issued or reissued, I am a member
of the class. Thus, I have standing to bring the legal-malpractice claims.” Oetting argues
the Dismissal Order is based on an earlier judgment that has been negated.
To determine whether the Dismissal Order was based on an earlier judgment that
has been reversed or vacated, the Court begins—and ends—with the plain language. The
Dismissal Order was based only on bedrock standing principles. It was not based on any
earlier judgment that has been reversed or vacated. And of course, the Dismissal Order
was not based on the later Main Action Reissuance Order. This argument fails.
Second, Oetting argues applying the Dismissal Order prospectively is no longer
equitable. Initially, the Court must decide whether the Dismissal Order is prospective. A
judgment is not prospective just because parties are bound by it. Stokors S.A. v.
Morrison, 147 F.3d 759, 762 (8th Cir. 1998). Instead, a judgment applies prospectively if
“it is executory or involves the supervision of changing conduct or conditions.” Id.
(quoting Maraziti v. Thorpe, 52 F.3d 252, 254 (9th Cir. 1995)). The Dismissal Order is
not executory and does not require supervising changing conduct or conditions; thus, it
does not apply prospectively for the purposes of Rule 60(b)(5). See id. (citing an
Eleventh Circuit case that held a judgment of dismissal was not prospective). This
argument fails, and Oetting is not entitled to relief under Rule 60(b)(5).
Rule 60(b)(6) allows a court to relieve a party from a final judgment for “any other
reason that justifies relief.” “Relief is available under Rule 60(b)(6) only where
exceptional circumstances have denied the moving party a full and fair opportunity to
litigate his claim and have prevented the moving party from receiving adequate redress.”
Harley, 413 F.3d at 871.
Plaintiff does not argue that anything denied him a full and fair opportunity to
litigate his claim; he argues only that the Dismissal Order “would be at odds with the
current state of the litigation” if he properly rejoins his fellow class members. Oetting
adds that the Dismissal Order is inconsistent with the Main Action Reissuance Order.
They are not. The Dismissal Order is based on a standing analysis. The Main Action
Reissuance Order is based on a Rule 6 analysis. The two orders are based on
fundamentally different areas of law and are not inconsistent just because one favors
Oetting while the other does not. Other courts have denied relief under Rule 60(b)(6)
when a party requested relief from a lack-of-standing dismissal because changed
circumstances would allegedly alter the standing analysis that required dismissal. Id. at
871–72. This is because standing is determined based on the facts, as they exist, when
the suit is commenced. Id. at 872. This argument fails, and Oetting is not entitled to
relief under Rule 60(b)(6).
Rule 60(b)(3) allows a court to relieve a party from a final judgment based on
“fraud . . ., misrepresentation, or misconduct by an opposing party . . . .” “This narrow
concept [of fraud in Rule 60(b)(3)] embraces ‘only the species of fraud which does or
attempts to, defile the court itself, or is a fraud perpetrated by officers of the court so that
the judicial machinery cannot perform in the usual manner its impartial task of adjudging
cases . . . .’” Johnson v. United States, No. 4:07-CV-365-ERW, 2011 WL 940841, at *1
(E.D. Mo. Mar. 16, 2011) (footnote omitted) (quoting Wilson v. Johns–Manville Sales
Corp., 873 F.2d 869, 872 (5th Cir. 1989)).
The fraud that Oetting points to is the exculpatory clause—that was never
approved by the court—attached to the settlement checks. He claims he failed to cash his
settlement checks because of the exculpatory clause and its unknown effects. Even if this
is true, the unapproved exculpatory clause did not defile this Court or prevent it from
impartially deciding the Dismissal Order. In fact, the court in the Main Action has
explained that the exculpatory clause has no legal force as applied to class counsel. In re
Bank of Am. Corp. Sec. Litig., 2017 WL 3232579, at *5. There has been no fraud on the
Court in this case, and this argument fails. 1
Oetting is not entitled to relief under Rule 60(b), and his motion is denied.
IT IS HEREBY ORDERED that Oetting’s motion for relief from final judgment,
to reinstate the action, and for leave to amend the complaint (#43) is DENIED.
day of January 2018.
STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE
Because Oetting’s motion fails on the merits, the Court need not address defendants’ timeliness
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