NICOLAS v. THE TRUSTEES OF PRINCETON UNIVERSITY

Filing 28

OPINION filed. Signed by Judge Anne E. Thompson on 12/19/2017. (mmh)

RECEIVED
NOT FOR PUBLICATION

DEC 2 O2017

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

I

AT 8:30
M
WILLli'"IA-:=-:M":"":T:::-.~W-AL_S_H_
CLERK

ELYSEE NICOLAS, individually and as

representative of a class of participants and
beneficiaries on behalf of the Princeton
University 403(b) Plan,

Civ. No. 17-3695

Plaintiff,

OPINION

v.
THE TRUSTEES OF PRINCETON
UNNERSITY,
Defendant.

THOMPSON. U.S.D.J.

INTRODUCTION
This matter comes before the Court on two motions: a Motion for Reconsideration (ECF
No. 20) and a Motion to Stay (ECF No. 21) brought by Defendant The Trustees of Princeton
University ("Defendant"). Plaintiff Elysee Nicolas ("Plaintiff') opposes. (ECF Nos. 25, 26.) The
Court has decided the motions after considering the parties' written submissions without oral
argument pursuant to Local Civil Rule 78.1 (b ). For the following reasons, Defendant's Motion
for Reconsideration is denied, but Defendant's Motion to Stay is granted.

BACKGROUND
Plaintiff brings this putative class action alleging breaches of fiduciary duties under the
Employee Retirement Income Security Act ("BRISA"), 28 U.S.C. §§ 1001-1461. Plaintiff, like
other faculty and staff at Princeton University, is a participant in the Princeton University
Retirement Plan and the Princeton University Savings Plan ("the Plans"). (Compl. fJ[ 1, 11, 13,
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ECF No. 1.) Defendant is the governing body of Princeton University, a private, nonprofit
institution of higher learning (id. <][ 14), and administrator of the Plans (id. <][ 15).
Plaintiff alleges that Defendant's actions caused participants in the Plans to pay excessive
administrative and recordkeeping fees. (Id. TJ[ 25-55.) In particular, Plaintiff cites Defendant's
failure to use its bargaining power to negotiate lower fees or conduct competitive bidding for
recordkeepers (id. <][<][ 26-27); contracting with two recordkeepers instead of one (id. TJ[ 30--37);
and using an asset-based model instead of a fixed dollar amount per participant (revenue sharing)
(id. TJ[ 42-50). Plaintiff likewise alleges that Defendant failed to remove two historically

underperforming Plan investment options: the CREF Stock Account and TIAA Real Estate
Account, each of which carried high investment management fees and low returns as compared
to appropriate benchmarks and comparable investment funds. (Id. TJ[ 56-80.) Plaintiff
accordingly purports to bring this class action on behalf of "All participants and beneficiaries of
The Princeton University Retirement Plan and the Princeton University Retirement Savings Plan
from May 24, 2011, through the date of judgment ...." (Id.<][ 87.)
Plaintiffs Complaint specifies three Counts, each of which de facto contains two
subparts because the allegations pertain to breaches of distinct fiduciary duties: the duty of
loyalty and the duty of prudence. Plaintiff alleges breaches of the fiduciary duties of loyalty and
prudence for: (I) unreasonable administrative fees;

<m unreasonable investment management

fees and performance losses with respect to the two particular annuities identified above; and
(ill) failure to monitor fiduciaries and service providers.

On August 7, 2017, Defendant filed a Motion to Dismiss and for Summary Judgment.
(ECF No 7.) On September 19, the Court granted in part and denied in part Defendant's Motion
to Dismiss and for Summary Judgment (ECF Nos. 10, 11), filing an Amended Opinion on
September 25, 2017 (ECF No. 14). The Amended Opinion dismissed Counts I-II of Plaintifrs

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Complaint with respect to the duty of loyalty and dismissed Count ill of Plaintiffs Complaint in
its entirety, granting Plaintiff leave to amend on all Counts. (Am. Op. at 4-10, ECF No. 14.) It
also denied Defendant's alternative Motion for Summary Judgment on statute of limitations
grounds. (Id. at 10-12.) With Court approval, the parties agreed to a revised briefing schedule for
Defendant to file a motion for reconsideration and for Plaintiff to file an Amended Complaint.

(See ECF Nos. 15, 17, 18.) On October 31, 2017, Defendant timely filed its Motion for
Reconsideration according to the court-approved schedule. (ECF No. 20.) Defendant
simultaneously filed a Motion to Stay, in view of the docketed appeal to the Third Circuit in the
similar but unrelated matter of Sweda v. University of Pennsylvania, 2017 WL 4179752 (E.D.
Pa. Sept. 21, 2017), appeal filed, No. 17-3244 (3d Cir. Oct. 13, 2017). (ECF No. 21.) Plaintiff
opposes both motions. (ECF Nos. 25, 26.) Defendant replied to Plaintiffs opposition to the
Motion to Stay on November 27, 2017. (ECF No. 27.) The Court now considers the Motion to
Stay, followed by the Motion for Reconsideration.

LEGAL STANDARDS
I.

Motion to Stay
A district court has "broad power to stay proceedings." Bechtel Corp. v. Local 215

Laborers' lnt'l Union of N. Am., 544 F.2d 1207, 1215 (3d Cir. 1976) (citing Landis v. N. Am.

Co., 299 U.S. 248, 254-55 (1936)). While the Supreme Court cautions that "[o]nly in rare
circumstances will a litigant in one cause be compelled to stand aside while a litigant in another
settles the rule of law that will define the rights of both," Landis, 299 U.S. at 255, the Third
Circuit has held that "[i]n the exercise of its sound discretion, a court may hold one lawsuit in
abeyance to abide the outcome of another which may substantially affect it or be dispositive of
the issues." Bechtel Corp., 544 F.2d at 1215; see also Rodgers v. U.S. Steel Corp., 508 F.2d 152,
162 (3d Cir. 1975). To determine the suitability of such a stay, courts consider "whether a stay

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will simplify issues and promote judicial economy, the balance of harm to the parties, and the
length of the []stay." Bais Yaakov of Spring Valley v. Peterson's Nelnet, LLC, 2011 WL
4056318, at *2 (D.N.J. Sept. 12, 2011) (citation omitted); see also Nussbaum v. Diversified

Consultants, Inc., 2015 WL 5707147, at *2 (D.N.J. Sept. 28, 2015) (addressing similar factors a
court should consider). The party seeking the stay bears the burden of showing that it is
warranted. Nussbaum, 2015 WL 5707147, at *2.
II.

Motion for Reconsideration
Reconsideration is an extraordinary rem~dy that should be granted "very sparingly." L

Civ. R. 7.l(i) cmt. 6(d); Friedman v. Bank of Am., N.A., 2012 WL 3146875, at *2 (D.N.J. Aug. l,
2012). Pursuant to Federal Rule of Civil Procedure 59(e) and the Local Rules, a motion for
reconsideration may be based on one of three grounds: ( 1) an intervening change in controlling
law; (2) new evidence not previously available; or (3) to correct a clear error of law or to prevent
manifest injustice. North River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir.
1995). Reconsideration is not an opportunity to raise new matters or arguments that could have
been raised before the original decision was made. See Bowers v. NCAA, 130 F. Supp. 2d 610,
613 (D.N.J. 2001). Nor is a motion for reconsideration an opportunity to ask the Court to rethink
what it has already thought through. See Oritani Sav. & Loan Ass 'n v. Fidelity & Deposit Co. of
Md., 744 F. Supp. 1311, 1314 (D.N.J. 1990). Rather, a motion for reconsideration may be

granted only if there is a dispositive factual or legal matter that was presented but not considered
that would have reasonably resulted in a different conclusion by the court. White v. City of

Trenton, 848 F. Supp. 2d 497, 500 (D.N.J. 2012). Mere disagreement with a court's decision
should be raised through the appellate process and is inappropriate on a motion for
reconsideration. United States v. Compaction Sys. Corp., 88 F. Supp. 2d 339, 345 (D.N.J. 1999).

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ANALYSIS
I.

Motion to Stay
Defendant has brought to the Court's attention an appeal pending before the Third Circuit

Court of Appeals in Sweda v. University of Pennsylvania, 2017 WL 4179752 (E.D. Pa. Sept. 21,
2017), appeal filed, No. 17-3244 (3d Cir. Oct. 13, 2017). In that case, a plaintiff brought a
putative class action claiming fiduciary breaches of BRISA by the University of Pennsylvania,
on the basis of substantially overlapping factual allegations as those alleged by Plaintiff here.

(See Def. Br. for Stay at 3-7, ECF No. 21-1.) Two days after this Court granted in part and
denied in part Defendant's Motion to Dismiss (ECF No. 10), J:udge Gene E.K. Pratter of the
Eastern District of Pennsylvania granted the University of Pennsylvania's motion to dismiss on
all claims, finding that Sweda' s complaint failed to create a plausible inference of fiduciary
breach sufficient to survive a motion to dismiss. Sweda, 2017 WL 4179752, at *7-10; (see also
Def.' s Br. for Stay at 7). Sweda appealed. Defendant seeks a stay of this action until that appeal
is decided, asserting that the BRISA claims against each university defendant are strikingly
similar and disposition of the appeal will clarify the controlling law, conserve judicial resources,
and be highly instructive in this action going forward. (Def.'s Br. for Stay at 3-7, 9-10.)
Plaintiff opposes Defendant's Motion to Stay, arguing such an indefinite stay is
exceedingly rarely granted, prejudicial to Plaintiff, and needlessly delays necessary discovery.
(Pl.'s Br. Opp'n to Stay at 5-6, ECF No. 25.) Plaintiff also notes that, while the Eastern District
of Pennsylvania dismissed the complaint in its entirety in Sweda, many other courts-including
this Court-have allowed similar claims to proceed beyond the motion to dismiss stage. (Pl.' s
Br. Opp'n to Stay at 1-2 (citing Henderson v. Emory Univ., 252 F. Supp. 3d 1344, 1349-53
(N.D. Ga. 2017); Tracey v. Mass. Inst. of Tech., 2017 WL 4478239, at *3-4 (D. Mass. Oct. 4,
2017); Cunningham v. Cornell Univ., 2017 WL 4358769, at *5-7 (S.D.N.Y. Sept. 29, 2017);

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Kelly v. Johns Hopkins Univ., 2017 WL 4310229, at *2 (D. Md. Sept. 28, 2017); Daugherty v.
Univ. of Chi., 2017 WL4227942, at *7-8 (N.D. Ill. Sept. 22, 2017); Cates v. Trs. of Columbia
Univ. in the City of New York, 2017 WL 3724296, at *2 (S.D.N.Y. Aug. 28, 2017); Clark v.
Duke Univ., 2017 WL 4477002, at *1 (M.D.N.C. May 11, 2017)); see also, e.g., Sacerdote v.
N.Y. Univ., 2017 WL 3701482, at *8-9, (S.D.N.Y. Aug. 25, 2017), reconsideration denied, 2017
WL 4736740 (S.D.N.Y. Oct. 19, 2017). Accordingly, Plaintiff asserts that Defendant is engaging
in litigation gamesmanship and delaying tactics. Of all the cases brought to the Court's attention,
however,· the only other case decided in the Third Circuit and governed by the law of this circuit
is Sweda, and the appeal of that case alone directly bears on the prior and future rulings of this
Court. (See Def.'s Reply at 2, 2 n.2, ECF No. 27.)
The Court evaluates the suitability of a stay according to three factors, detailed above.
First, it is undisputed that a stay would simplify issues and promote judicial economy to some
extent. (Def.'s Br. to Stay at 9; Pl.'s Br. Opp'n to Stay at 6; Def.'s Reply at 3.) While Plaintiff
disputes Defendant's characterization of the overlaps between Sweda and the instant action (Pl.' s
Br. Opp'n to Stay at 4), it is undoubtedly true that a Third Circuit ruling on the viability of
claims raised in both lawsuits will create a more definite roadmap for this Court in applying
controlling law. Should the Third Circuit affirm the Sweda decision, which dismissed the
complaint in its entirety for failing to state a plausible claim to relief, this Court would need to
revisit its earlier opinion allowing certain of Plaintiffs claims to proceed under the same
standard. The Court finds that a stay would promote judicial economy by preventing needless
back-and-forth in discovery or motion practice on disputed legal standards in the Third Circuit's

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law on fiduciary breaches under BRISA, streamlining discovery and guiding future proceedings. 1
This weighs heavily in favor of granting a stay.
Plaintiff argues that the balance of harm to the parties weighs heavily against granting a
stay. (See, e.g., Pl.'s Br. Opp'n to Stay at 2 ("Plaintiff in this case should not have to wait for
months and months to begin discovery simply because another federal court disagreed with this
Court's ruling.").) Further, Plaintiff argues that a stay would "delay the case unnecessarily and
for an unknown period of time," "prevent[] Plaintiff from procuring necessary discovery in a
timely manner," and that "discovery in the case could be misplaced or become inaccessible due
to the passage of time and faded memories." (Id. at 5.) Defendant counters that a stay will lessen
the burden on the parties by avoiding "discovery that either turns out not to be needed or that is
incomplete because it does not extend to claims that are put back in the case." (Def.'s Br. to Stay
at 9.) Further, Defendant argues that there are no concerns about evidence being misplaced or
lost given Defendant's extensive recordkeeping obligations, the documentary evidence that will
be made available to refresh memories that may fade, and the fact that Plaintiffs claims are
already dated and the additional delay will have minimal impact. (Def.'s Reply at 3-4.)
Balancing the potential harm to the parties, the Court agrees with Defendant that Plaintiffs
concerns about hardship caused by delay are not substantial enough to militate against a stay.
Indeed, "a stay carries little risk that either party's interest will be seriously harmed pending the
Third Circuit's decision." Bais Yaakov, 201l··WL4056318, at *2.
Finally, the Court turns to the anticipated length of the stay. It is undisputed that a stay
awaiting a decision in Sweda would be for an uncertain and significant period of time, lasting

1 The

Court is particularly mindful of the fact that its prior Opinion and Amended Opinion give
Plaintiff leave to file an amended complaint, opening an opportunity for Defendant to file a
renewed motion to dismiss. The Court would then again confront the Third Circuit law which is
disputed here and which would be resolved by the pending appeal in Sweda.
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potentially a year or more. (See, e.g., Def.'s Br. to Stay at 11; Pl.'s Br. Opp'n to Stay at 2.) While
no one can predict the exact length of the stay, the Court is encouraged that a briefing schedule
has already been set in the Third Circuit and is scheduled to be completed by January 19, 2018.
(Def.' s Br. to Stay at 11 n.8.) Regarding the advisability of a stay given its potential length, the
Court notes that the p~ies in this action have repeatedly stipulated to extended briefing
schedules. (See, e.g., ECF Nos. 4, 15, 17, 18.) Overall, the Court determines that any anticipated
delay is not "excessive considering the likelihood that the Third Circuit's decision will resolve
the dispositive ... issues presently in dispute." Bais Yaakov, 2011WL4056318, at *2.
Therefore, Defendant's Motion to Stay is granted.
II.

Motion for Reconsideration
Defendant argues that the Court committed clear errors of law in its prior opinion (ECF

Nos. 10, 14). In particular, Defendant asserts that the· Court misconstrued controlling Third
Circuit law, namely Renfro v. Unisys Corp., 671F.3d314 (3d Cir. 2011) and In re Unisys

Savings Plan Litigation, 173 F.3d 145 (3d. Cir. 1999). (Def.'s Br. for Recons. at 1-2, 3-7, 9-11,
ECF No. 20-1.) Defendant also asserts the Court misconstrued evidence presented regarding
material facts necessary for the Court's disposition of Defendant's alternative motion for
summary judgment. (Id. at 1-2, 7-9.) Having concluded that a stay is appropriate, the Court need
not address at length the motion for reconsideration. In view of the impending Third Circuit
consideration of Sweda, further changes in controlling law are currently anticipated. It would be
unwise for the Court to disturb its previous ruling, given that the Third Circuit will soon resolve
many of the precise issues that Defendant requests this Court to reconsider. Defendant's Motion
for Reconsideration is denied. Defendant may file a renewed motion for reconsideration in view
of an intervening change in controlling law upon the Third Circuit's decision in Sweda.

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....

CONCLUSION
For the reasons stated herein, Defendant's Motion for Reconsideration is denied.
Defendant's Motion to Stay is granted. An appropriate order will follow.

Date:

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