Willis et al v. Morgan Keegan & Company, Inc. et al

Filing 328

ORDER denying 320 Motion for Reconsideration. Signed by Judge Samuel H. Mays, Jr on 05/17/2013.

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

In re REGIONS MORGAN KEEGAN )
SECURITIES,
DERIVATIVE
and )
)
ERISA LITIGATION
)
)
This Document Relates to:
)
In re Regions Morgan Keegan )
)
Closed-End Fund Litigation,
)
)
No. 2:07-cv-02830-SHM-dkv

No. 2:09-2009 SMH V

ORDER DENYING MOTION FOR RECONSIDERATION
Before the Court is Jerome Christenson, Gloria Christenson,
and Jerome Christenson as IRA Beneficiary’s (collectively the
“Christensons”) Motion for Reconsideration of the Court’s April
10, 2013 Order.

(Mot. for Recon., ECF No. 320.)

The

Christensons argue that the Court’s interpretation of the class
definition is a clear error of law.

They also argue that

manifest injustice would result both to them and to the class if
they were prevented from objecting because they would be denied
due process and the Court would not be able to consider the
interests of the class members sufficiently in determining
whether the Proposed Settlement should be accepted.
Plaintiffs filed a Response on May 3, 2013.

(Id.)

Lead

(Resp., ECF No.

322.)
For the following reasons, the Christensons’ Motion is

DENIED.
I.

Background

The background of this case is stated in the Court’s April 10,
2013 Order.

(April 10 Order, ECF No. 309.)

On March 21, 2013

the Christensons filed a Motion to Intervene, (ECF No. 291), and
an Objection to the Lead Plaintiffs’ Motion for Final Approval
of the Proposed Settlement and Final Class Certification, (ECF
No. 292).

Lead Plaintiffs filed a combined response in

opposition to the Christensons’ Motion and Objection on April 2,
2013.

(Resp., ECF No. 296.)

On April 10, 2013, the Court

entered its Order Denying the Christensons’ Motion and
disallowing their Objection.
II.

(April 10 Order.)

Standard of Review

A motion for reconsideration of an interlocutory order may
be granted if it complies with the requirements of Federal Rule
of Civil Procedure 54(b) and of Western District of Tennessee
Local

Rule

7.3.1

Rule

54(b)

states

that

“any

order

or

decision...that adjudicates fewer than all the claims or the
rights and liabilities of fewer than all the parties does not
end the action as to any of the claims or parties and may be
revised

at

any

time

before

the

1

entry

of

final

judgment

The Christensons’ Motion does not comply with the requirements of Local Rule
7.2. It includes neither a proposed order nor a certificate of consultation
with the parties. W.D. Tenn. R. 7.2(a)(1)(A)-(B). Because no rule would
prevent the Christensons from refiling a conforming motion, and because the
Court prefers to expedite the final determination of this matter, the Court
will consider the Motion.

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adjudicating all the claims and all the parties’ rights and
liabilities.”
gives

The

district

reconsideration.

Sixth

courts

Circuit

recognizes

authority

to

that

hear

Rule

54(b)

motions

for

Rodriguez v. Tenn. Laborers Health & Welfare

Fund, 89 F. App’x 949, 959 (6th Cir. 2004).

In the Sixth

Circuit,

reconsidering

“courts

will

find

justification

for

interlocutory orders when there is (1) an intervening change of
controlling law; (2) new evidence available; or (3) a need to
correct

a

clear

error

or

prevent

manifest

injustice.”

Id.

Because the “Federal Rules of Civil Procedure do not explicitly
address motions for reconsideration of interlocutory orders,”
Id., courts in this District rely on Local Rule 7.3 for further
guidance.

See, e.g.,

Bullwinkel v. United States DOE, No. 11-

1082, 2013 U.S. Dist. LEXIS 25445, at *5-6 (W.D. Tenn. Jan. 17,
2013); Ward v. Shelby Cnty. Sheriff’s Dep’t, No. 10-02308, 2012
U.S. Dist. LEXIS 118359, at *4 (W.D. Tenn. Aug. 22, 2012).
Under Local Rule 7.3, “[b]efore the entry of a judgment
adjudicating all of the claims . . . in a case, any party may
move, pursuant to Fed. R. Civ. P. 54(b), for the revision of any
interlocutory order made by that Court.”

W.D. Tenn. R. 7.3(a).

The moving party must specifically show:
(1) A material difference in fact or law from that
which was presented to the Court before entry of the
interlocutory order for which revision is sought, and
that in the exercise of reasonable diligence the party
applying for revision did not know such fact or law at
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the time of the interlocutory order; or
(2) the occurrence of new material facts or a change
of law occurring after the time of such order; or
(3) a manifest failure by the Court to consider
material facts or dispositive legal arguments that
were presented to the Court before such interlocutory
order.
W.D. Tenn. R. 7.3(b); see also Reynolds v. FedEx Corp., No. 092692-STA-cgc, 2012 U.S. Dist. LEXIS 172751, at *14 (W.D. Tenn.
Dec. 4, 2012).
“Motions to reconsider . . . are used sparingly and in rare
circumstances.”

In re Southeastern Milk Antitrust Litig., No.

2:07-CV-208, 2011 U.S. Dist. LEXIS 95784, at *5 (E.D. Tenn. Aug.
25, 2011).

Although a court can grant motions to revise its

prior rulings, it “‘should not do so in the vast majority of
instances, especially where such motions merely restyle or
reshash the initial issues.’”

Id. (quoting White v. Hitachi

Ltd., No. 3:04-CV-20, 2008 U.S. Dist. LEXIS 25240, at *1 (E.D.
Tenn. March 20, 2008)).

Local Rule 7.3(c) “specifically

prohibits a party from using a Motion for Reconsideration to
‘repeat any oral or written arguments made by the movant in
support of or in opposition to the interlocutory order that the
party seeks to have revised.’”

Reynolds, 2012 U.S. Dist. LEXIS

172751, at *15 (quoting W.D. Tenn. R. 7.3(c)).
III. Analysis
The Christensons do not argue that new evidence has emerged or
that there has been a change of controlling law since the April
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10 Order was entered.

They argue instead that the Court’s

decision was based on a clear error of law and that manifest
injustice will result if the Court does not revise its Order.
A. Motion to Intervene
The Christensons do not address the denial of their Motion
to Intervene.

Because the Christensons have not attempted to

show that the denial of their Motion to Intervene was based on a
clear error of law or will result in manifest injustice, to the
extent their Motion for Reconsideration might concern that
decision, their Motion is DENIED.
B. Clear Error
The Christensons argue that the Court’s interpretation of
the class definition, which it held precluded the Christensons
from making an objection or appearing at the April 12, 2013
fairness hearing, constitutes clear error.
9.)

(Mot. for Recon. 6-

They argue that it was not possible for the Christensons or

anyone else to participate in the class prior to preliminary
certification because until then it was only a putative class.
(Id. at 6-8.)

They also argue that the decision in a FINRA

arbitration does not bar a party from bringing a claim in
federal court, and that the class definition was intended to
prevent “double dipping,” a concern that does not apply to the
Christensons.

(Id. at 8-9, 5.)

The Christensons’ main argument is that the Court’s
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interpretation of the settlement class definition, excluding
from participation individuals and entities who pursued FINRA
arbitrations and did not dismiss them specifically to allow
participation in the class, cannot be correct because no class
existed when their FINRA arbitration was dismissed.

The

Christensons previously made this argument in their Reply to the
Lead Plaintiffs’ Response in Opposition to the Christensons’
Objection.

(Reply 3-4, ECF No. 302-1.)

The moving party is

barred by both Rule 54(b) and Local Rule 7.3 from repeating
arguments previously made in support of or opposition to the
interlocutory order it seeks to have revised.

W.D. Tenn. R.

7.3(c); see also Southeastern Milk, 2011 U.S. Dist. LEXIS 95784,
at*5.

The Court need not consider this argument again.
The Christensons also argue that the Court’s interpretation

of the class definition to exclude them was incorrect because
the intent of the exclusionary language was to prevent a party
from “double dipping” by “simultaneously proceeding with a FINRA
case and also trying to be part of the class action.”
Recon. 5.)

(Mot. to

To satisfy Local Rule 7.3, the party moving for

reconsideration of an order on the basis of clear error or
manifest injustice must specifically allege “a manifest failure
by the Court to consider material facts or dispositive legal
arguments that were presented to the Court before such
interlocutory order.”

W.D. Tenn. R. 7.3(b).
6

The Christensons

do not specifically allege any material facts or dispositive
legal arguments, either new or previously ignored by the Court.
The Christensons’ argument does not comply with the requirements
of Local Rule 7.3 and cannot serve as the basis for
reconsideration of the April 10 Order.
The Christensons also argue that the dismissal of a FINRA
arbitration in itself does not bar a plaintiff from bringing a
securities action in federal court and that they should
therefore be allowed to participate as class members and to
object.

The Christensons made this argument in their Reply to

the Lead Plaintiffs’ Response in Opposition to the Christensons’
Objection, and it cannot serve as the basis for reconsideration
of the April 10 Order.

(Reply 3); see also W.D. Tenn. R.

7.3(c); see also Southeastern Milk, 2011 U.S. Dist. LEXIS 95784,
at*5.

The argument also misunderstands the basis for the

Court’s decision.

The April 10 Order decided only that the

Christensons did not fit within the class definition submitted
by the Lead Plaintiffs and preliminarily accepted by the Court.
The Order does not bar the Christensons from bringing any state
or federal case based on their individual claims against the
Defendants.

The Christensons’ arguments about the preclusive

effect of a FINRA dismissal are unrelated to the Court’s
determination that their claims are not encompassed by the class
definition.

Those arguments cannot serve as a basis for
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reconsideration of the April 10 Order.
C. Manifest Injustice
The Christensons argue that the April 10 Order will result
in manifest injustice to them and to the members of the class.
They argue first that the class will suffer manifest injustice
because the Christensons were not present at the fairness
hearing to defend the interests of the absent class members.
The Christensons claim that the class “received inadequate
representation at the hearing by Lead Counsel,” and that the
Court’s April 10 Order prevented them, the only knowledgeable
objectors, from appearing at the hearing to contradict Lead
Plaintiffs’ misrepresentations.

(Mot. for Recon. 3.)

The

Christensons do not make any supporting factual assertions or
legal arguments beyond stating that they are competent to
protect the interests of the class members and that neither the
Lead Plaintiffs nor any of the objectors are.

The Court owes

the Christensons’ assertions no presumption of truth and need
not make any inferences in their favor.
Even if the Christensons had put forward supporting facts
or legal arguments, the Court would not find that manifest
injustice resulted to the class because the Christensons’
Objection was precluded.

It is well understood that the

interests of Lead Plaintiffs and settlement objectors may not
align with those of absent class members.
8

For that reason, all

prospective class members are notified, and the court to which a
settlement is presented is obligated to assess the fairness,
reasonableness, and adequacy of the settlement independently.
See, e.g., Vassalle v. Midland Funding LLC, 708 F. 3d 747, 754
(6th Cir. 2013).

Class members’ rights are never at the mercy

of self-interested parties, and the Christensons have given the
Court no reason to believe that the members of this proposed
class face any prejudice because of the absence of a single nonparty’s objections.
The Christensons next argue that the Court’s April 10 Order
denies them due process of law because, as a result, they are
precluded both from being heard in opposition to the class
settlement and from vindicating their rights in a FINRA
arbitration.

The Christensons’ due process argument is

meritless and does not demonstrate a manifest injustice.

First,

the Court’s April 10 Order does not preclude any FINRA
arbitration.

If the Christensons are precluded from further

arbitration, that preclusion is the result of their own
strategic decisions and the FINRA procedural rules.
Award, ECF No. 297-1.)

(See FINRA

Second, the April 10 Order does not

preclude the Christensons from initiating judicial proceedings.
Because they are not class members, no settlement reached in
this case is binding on them or affects their rights in any way.
As the Christensons themselves argue, neither the result of
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their second FINRA arbitration nor the Court’s decision that
they are not class members precludes them from bringing a case
against the Defendants on the Christensons’ individual claims in
state or federal court.

The Christensons’ claims of manifest

injustice to class members and to themselves cannot serve as the
basis for reconsideration.
IV.

Conclusion

For the foregoing reasons, the Christensons’ Motion to
Reconsider the Court’s April 10, 2013 Order is DENIED.

So ordered this 17th day of May, 2013.

s/ Samuel H. Mays, Jr.___
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE

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