United States District Court, E.D. Missouri
OPINION, MEMORANDUM AND ORDER
EDWARD AUTREY UNITED STATES DISTRICT JUDGE.
matter is before the Court on the Motion of Appellee David A.
Sosne, Trustee for the Bankruptcy Estate of Green Jacobson,
P.C. (the “Debtor”), to Dismiss the Appeal, [Doc.
No. 14]. Appellant opposes the Motion, and has filed a
responsive memorandum thereto. For the reasons set forth
below, the Motion is granted.
Appeals from certain orders of the Bankruptcy Court in the
above styled Bankruptcy Proceeding. Appellee urges dismissal
for lack of standing of Appellant, David P. Oetting, in his
capacity as Class Representative for the Nationsbank Class.
and Procedural Background
facts and procedural history giving rise to this matter are
set out by the Eighth Circuit Court of Appeals in Oetting
v. Norton, 795 F.3d 886 (8th Cir. 2015):
After the merger of NationsBank Corporation and BankAmerica
Corporation, shareholders of both companies filed class
action lawsuits alleging violations of the federal securities
laws. The cases were transferred to the Eastern District of
Missouri, where the district court appointed David Oetting as
one lead plaintiff of the NationsBank class and the St. Louis
law firm of Green Jacobson as lead counsel for the class. The
litigation settled, resulting in a $333 million settlement
fund for the NationsBank class. We affirmed the district
court's approval of the settlement over Oetting's
objection that it was inadequate. In re BankAmerica Corp.
Sec. Litig., 350 F.3d 747 (8th Cir.2003); see
Koehler v. Brody, 483 F.3d 590, 598-99 (8th Cir.2007).
On the recommendation of Green Jacobson, the district court
appointed Heffler, Radetich & Saitta, LLP (Heffler), as
claims administrator to distribute the settlement fund to
class member claimants. During the claims process, an
employee of Heffler conspired to submit fifteen false claims
against the fund, resulting in the payment of $5.87 million
that otherwise would have been paid to members of the class.
In 2010, the district court denied Green Jacobson's
motion for leave to file a supplemental complaint against
Heffler to recover this loss. Oetting subsequently filed a
separate action against Heffler on behalf of the NationsBank
class that was transferred to and is pending in the Eastern
District of Pennsylvania.
After two distributions to the NationsBank class in December
2004 and April 2009, some $2.4 million remained in the
settlement fund. Green Jacobson moved to have the remaining
$2.4 million distributed cy pres and requested an
additional award of $98, 114.34 in attorney's fees for
post-settlement work. Oetting opposed the cy pres
distribution as contrary to class members' interests,
opposed the award of additional attorney's fees, and
argued that Green Jacobson should disgorge $2 million in fees
for abandoning the class. Oetting also filed this separate
class action, alleging in four counts that class counsel
Green Jacobson and three members of the firm (collectively,
“Green Jacobson”) (i) committed legal malpractice
by negligently hiring and failing to supervise claims
administrator Heffler, and (ii) breached its fiduciary duty
by taking various actions that constituted abandonment of the
NationsBank class. The complaint sought damages for causing
the $5.87 million fraud loss to the settlement fund and
disgorgement of the entire $60 million in attorneys fees
awarded Green Jacobson in the BankAmerica
In the main action, the district court granted Green
Jacobson's motion for a cy pres distribution and
for a supplemental fee award and denied Oetting's request
for disgorgement. In re BankAmerica Corp. Sec.
Litig., No. 4:99-MD-1264, 2013 WL 3212514, at *1, *6
(E.D.Mo. June 24, 2013). Oetting appealed. We reversed the
cy pres award, ordering the district court to allow
an additional distribution to the class and then to consider
whether a cy pres award of any remaining funds would
be appropriate. In re BankAmerica Corp. Sec. Litig.,
775 F.3d 1060, 1064-67 (8th Cir.2015). We vacated the
supplemental fee award as premature prior to completion of
additional distributions that would be made after remand.
Id. at 1067-68.
Oetting v. Norton, 795 F.3d 886, 887-88 (8th Cir.
2015). (footnotes omitted).
involuntary petition under Chapter 7 of the Bankruptcy Code
was filed against Green Jacobson, P.C. on March 3, 2015. The
Order for Relief in this bankruptcy case was entered on April
26, 2015, and Appellee David A. Sosne was appointed as the
Chapter 7 Trustee.
20, 2015, Appellant David P. Oetting, as “class
representative” filed a general unsecured proof of
claim in the amount of $10, 503, 914.70. This Claim was