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Oetting v. Norton

United States District Court, E.D. Missouri, Eastern Division

January 8, 2018

GLEN A NORTON, as Receiver for GREEN JACOBSON, P.C.,, Defendants.



         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.

         I. Procedural History

         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-MD-1264-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 checks.

         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.

         II. Legal Standard

         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 discretion).

         III. Discussion

         Oetting grounds his arguments in three subsections of Rule 60(b). The ...

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