Hale, et al. v. State of Tennessee, ex rel., et al.
Filing
100
MEMORANDUM OPINION OF THE COURT. Signed by District Judge Eli J. Richardson on 12/10/2021. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(mg)
IN THE UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
DR. DAN E. HALE, individually, and for
Cardinal Revocable Trust, DON HALE,
individually, and as Trustee for the
HRC MEDICAL DEFINED BENEFIT
PLAN,
Plaintiffs,
v.
STATE OF TENNESSEE, et al.,
Defendants.
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NO. 3:14-cv-02194
JUDGE RICHARDSON
MEMORANDUM OPINION
Pending before the Court is Plaintiff’s Motion to Alter or Amend (Doc. No. 98, “Motion”).
The State Defendant responded. (Doc. No. 99). Plaintiff filed no reply.
BACKGROUND
This action has been pending for more than seven years. On September 15, 2021, the Court
granted Defendants’ Second Motion to Dismiss (Doc. No. 72), which resulted in the denial of
Plaintiffs’ final remaining claim for declaratory relief. (Doc. No. 96). This request for declaratory
relief made up Count A of the Complaint, and is phrased as follows:
Plaintiffs seek from the Court a finding that the HRC Medical Defined Benefit Plan
remains a viable defined benefit plan, which must be governed by the provisions of
29 U.S.C. § 1144, et seq. In furtherance of that finding, Plaintiffs seek entry of an
order compelling that the state court Receiver deposit with the Trustee of the plan
the entirety of the fund of $646,027.74, to be placed in a FDIC insured bank so that
it may be administered for the benefit of the plan beneficiaries. Plaintiffs further
seek a finding from the Court that the removal of the ERISA-governed funds by the
Receiver, in contravention of the applicable federal statutes and regulations,
constitute a breach of fiduciary duty, and that the damages, penalties and sanctions
set forth in 29 U.S.C. § 1132(c) may be assessed to the Commissioner and her
Receiver, including the $100.00 per day penalty.
(Doc. No. 1 at 10).
Plaintiff1 now asks the Court to reconsider its dismissal of the declaratory relief
claim pursuant to Federal Rule of Civil Procedure 59(a)(2) due to alleged “plain error on a
threshold, determinative issue.” (Doc. No. 98 at 1). Plaintiff describes the “two layers”
which constitute this alleged error in the Court’s dismissal:
First, an Order has been entered that has determined that “Party B” (the legally
discrete, separate “HRC Medical Defined Benefit Plan” has been prejudiced and
impacted by the “waiver” actions of “Party A” (the Hales individually or the
sponsoring HRC medical corporation), although “Party B,” “the Plan” was never a
participant in either the State Court or Claims Commission proceedings, for any
purpose. The closest the State comes to somehow meshing those legally discrete
parties is the emphasis that some of the ERISA Plan participants now before the
Court, were, also as individuals, nominally before the Court as corporate directors
and individual defendants. That argument should carry no greater weight in the
present matter than an attempt to assign, for due process purposes, the same legal
identity to separate LLCs or corporations which may share some members.
Then, collateral, but remotely-secondary to the fundamental “different party” due
process observations set forth above, the following points also separately justify a
merits presentation at trial (on the ERISA record) on the issues of : 1) continued
1
The Court notes that the Motion to Alter or Amend appears, based on paragraph 2 of the Motion,
to have been brought solely by a single specific purported Plaintiff, which paragraph 2 calls “the
‘Plan,’” (Doc. No. 98 at 1). Presumably, this means the HRD Medical Defined Benefit Plan, but
actually neither this plan (as opposed to its trustee, Don Hale) nor any other “plan” is actually a
plaintiff in this matter.
There are other problems here. In beginning of its case caption, the Motion refers to “DON
HALE, Trustee for the HRC MEDICAL DEFINED BENEFIT PLAN, Plaintiffs.” (Id.). This
captioning is confusing in that is inconsistent with the case caption that has been used throughout
the course of this litigation (which lists three Plaintiffs), and is self-contradictory in that it mentions
only one Plaintiff, yet uses the plural “Plaintiffs.” (Id.). This is not a big issue, except that the
caption’s listing of only one Plaintiff suggests that the Motion is being filed (solely) by that
particular Plaintiff, rather than the alleged Plaintiff (which, as noted, is not actually a Plaintiff)
mentioned in paragraph 2 of the Motion. Counsel would do well to pay attention to these kinds of
things in the future.
In any event, to the extent that it matters, the Court will proceed under the assumption that
this Motion is brought only by Don Hale as trustee for the HRC Medical Defined Benefit Plan—
referred to herein as “Plaintiff”—and not by Don Hale individually, or by Dr. Dan E. Hale, either
individually or on behalf of the Cardinal Revocable Trust.
Plan viability, under the terms of the Plan and IRS/Department of Labor
regulations; 2) the effect on a TCC “waiver” defense where there is an absence of
subject matter jurisdiction of ERISA in the TCC; and, 3) the nature and impact of
the “equitable relief” involved, as opposed to “damages” sought “from the State.”
(Id. at 8-9).
LEGAL STANDARD
Plaintiff purports to bring his Motion pursuant to Federal Rule of Civil Procedure 59(a)(2),
which reads as follows: “After a nonjury trial, the court may, on motion for a new trial, open the
judgment if one has been entered, take additional testimony, amend findings of fact and
conclusions of law or make new ones, and direct the entry of a new judgment.” But this rule is
inapplicable here because there was no trial.
Defendants suggest that the Court could construe this motion instead as a motion to alter
or amend a judgment under Federal Rule of Civil Procedure 59(e). That subsection of Rule 59
reads: “A motion to alter or amend a judgment must be filed no later than 28 days after the entry
of the judgment.” Fed. R. Civ. P. 59(e). The Court agrees that Rule 59(e) is applicable when a
party, like Plaintiff here, moves to overturn a district court’s ruling on a motion to dismiss. “[O]ur
precedents require that we treat a motion to vacate an order of dismissal as a Rule 59(e) motion.”
Hamid v. Price Waterhouse, 51 F.3d 1411, 1415 (9th Cir. 1995); cf. Southall v. USF Holland, Inc.,
No. 3:15-CV-01266, 2019 WL 383998, at *1 (M.D. Tenn. Jan. 30, 2019) (Richardson, J.) (treating
a party’s motion to alter the court’s summary judgment finding as a Rule 59(e) motion where the
plaintiff failed to cite to particular subsection of Rule 59 and where there was no prior trial); Pettrey
v. Enterprise Title Agency, Inc., 242 F.R.D. 384, 385 (N.D. Ohio 2007)..
Motions to alter or amend, brought pursuant to Fed. R. Civ. P. 59(e), are entrusted to the
Court's sound discretion. United States v. Tenn. Walking Horse Breeders' and Exhibitors' Ass'n,
263 F. Supp. 3d 679, 681 (M.D. Tenn. 2017). A motion under Rule 59(e) is not an opportunity to
re-argue a case. Id. Rather, the Court may grant a Rule 59(e) motion only if there is: (1) a clear
error of law; (2) newly-discovery evidence; (3) an intervening change in controlling law; or (4) a
need to prevent manifest injustice. Id. A motion to alter or amend should not be used to relitigate
previously considered issues, to submit evidence which could have been previously submitted in
the exercise of reasonable diligence, or to attempt to obtain a reversal of a judgment by offering
the same arguments previously presented. Id.
Generally, relief under Rule 59(e) is an “extraordinary remedy” restricted to those
circumstances in which the moving party has set forth facts or law of a strongly convincing nature
that indicate that the court's prior ruling should be reversed. Harris v. Perry, Case No. 2:12-cv02668-STA-dkv, 2016 WL 5396701, at * 3 (W.D. Tenn. Sept. 27, 2016). Essentially, a showing
of manifest injustice requires that there exists a fundamental flaw in the court's decision that
without correction would lead to a result that is both inequitable and not in line with applicable
policy. Id. The Sixth Circuit has made clear that the standard for manifest injustice is “an exacting
standard” and that a successful Rule 59(e) motion must “clearly establish a manifest error of law.”
Heithcock v. Tenn. Dept. of Children's Servs., Civil No. 3:14-CV-2377, 2015 WL 5970894, at * 1
(M.D. Tenn. Oct. 14, 2015). Mere disagreement with a court's findings does not rise to the level
of manifest injustice under Rule 59(e). McDaniel v. American Gen. Fin. Servs., Inc., No. 042667B, 2007 WL 20842777, at * 2 (W.D. Tenn. July 17, 2007). The “manifest injustice” ground
for a Rule 59(e) motion is not meant to allow a disappointed litigant to attempt to persuade the
Court to change its mind. Harris, 2016 WL 5396701, at * 3.
Though not invoked by either party, Federal Rule of Civil Procedure 60(b) may
alternatively be applicable. This Court has previously, in resolving a party’s motion to reconsider
the Court’s decision on summary judgment, conducted an analysis under rule 60(b); it likewise
will do so here in the absence of Plaintiff’s express invocation of an actually applicable provision
of the Federal Rules. See Southall, 2019 WL 383998, at *3. Rule 60(b) of the Federal Rules of
Civil Procedure provides that the Court may relieve a party from an Order for the following
reasons: (1) mistake, inadvertence, surprise or excusable neglect; (2) newly discovered evidence
that, with reasonable diligence, could not have been discovered earlier; (3) fraud,
misrepresentation or misconduct by an opposing party; (4) the judgment is void; (5) the judgment
has been satisfied, released or discharged; or (6) any other reason that justifies relief. Fed. R. Civ.
P. 60(b). The party seeking relief under Rule 60(b) bears the burden of establishing the grounds
for such relief by clear and convincing evidence. Settle v. Bell, No. 06-1092-JDT-egb, 2017 EL
1058365, at * 1 (W.D. Tenn. March 20, 2017). Relief from a judgment after its entry is an
extraordinary remedy that should be used sparingly. Duerson v. Henderson County Detention
Center, No. Civ. A.4:05CV-P165-M, 2005 WL 3536333, at * 1 (W.D. Ky. Dec. 21, 2005).
DISCUSSION
Plaintiff begins his argument with a statement that is particularly telling regarding the fate
of his motion: “Counsel for Plaintiff (the “Plan”) may have done a poor job in articulating a pivotal,
threshold issue that must be decided before any ‘same acts’ or ‘subject matter jurisdiction’ analysis
may begin.” (Doc. No. 98 at 1). Rules 59 and 60 do not provide an avenue for parties to re-argue,
rephrase, or clarify arguments previously presented, no matter how poorly they made such
arguments the first time around or how meritorious they would have been had they been made
effectively. Plaintiff unabashedly makes quite clear that this is what he is attempting to do with
this motion; little additional analysis is needed to deny this request to overturn the court’s
dismissal. See also (Doc. No. 98 at 2) (describing the “threshold, preclusive issue” as one which
“Plaintiff attempted to convey in [his] first response”).
Rule 59(e)
Plaintiff fails to meet any of the four conditions that would allow a Rule 59(e) motion to
be brought. Plaintiff does not appear to invoke conditions two through four (newly-discovery
evidence; an intervening change in controlling law; or a need to prevent manifest injustice).
Instead, Plaintiff argues that the Court got the law wrong (i.e., there was a “clear error of law”)
and/or did not address what Plaintiff views to be a threshold issue.2
Despite Plaintiff’s attempt to say otherwise, the Court did address Plaintiff’s “different
parties” argument. Because the Court found the argument to be unpersuasive, it stated in a
footnote: “Plaintiffs also make several unsupported arguments that the Court finds unavailing.
Plaintiffs argue that there is not a complete identity of the parties between this action and the TCC
action. The Court is unpersuaded by this argument because Plaintiffs cite no case law in support
or otherwise explain why identical parties would be required.” (Doc. No. 95 at 9 n.8). Nothing in
Plaintiff’s Motion changes the Court’s view in this regard. In fact, the Court is particularly
bothered that Plaintiff states at the outset of his Motion that “substantial case law exists” to support
his argument, yet fails to cite a single case throughout the entire motion. (Doc. No. 98 at 2).
Plaintiff has pointed to no newly-discovered evidence or intervening change in controlling law.
Plaintiff has not shown that the Court’s prior ruling was a clear error of law or manifest injustice.
Plaintiff’s mere disagreement with the Court’s ruling is certainly not enough for the Court to grant
the extraordinary remedy of reversing its decision. Rule 59(e) thus affords Plaintiff no relief.
Note that throughout the briefing, Plaintiff emphasizes that “the defendant” (or “the State,” the
particular Defendant to which Plaintiff here refers) did not address the issue it views to be
determinative. That is irrelevant. Defendant has no duty to reply to all issues raised in Plaintiff’s
response. What matters under Rule 59 is whether the Court (as opposed to any Defendant)
committed a clear error of law (either through misrepresenting the law, or, as Plaintiff argues,
failing to address a determinative issue).
2
Rule 60
Even if the Court were to construe Plaintiff’s motion alternatively to invoke Rule 60,
Plaintiff has failed to show that any reason exists under Rule 60 for the Court relieve Plaintiff from
its Order granting the motion to dismiss. There is no evidence of mistake, inadvertence, surprise
or excusable neglect; newly discovered evidence that could not have been discovered earlier; or
fraud, misrepresentation or misconduct by an opposing party. Plaintiff has not even alleged that
the judgment is void, satisfied, released or discharged. Finally, Plaintiff has not demonstrated that
there is any justifiable reason to relieve him from the Court's judgment. Plaintiff has presented no
evidence, let alone clear and convincing evidence, to establish grounds for extraordinarily
relieving Plaintiff from the Order granting dismissal.
CONCLUSION
For all of these reasons, Plaintiff’s Motion to Alter or Amend will be denied. An
appropriate order will be entered.
____________________________________
ELI RICHARDSON
UNITED STATES DISTRICT JUDGE
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