United States District Court, E.D. Pennsylvania
JAMES OETTING, Individually and on behalf of all others similarly situated, Plaintiff,
HEFFLER, RADETICH & SAITTA, LLP, EDWARD J. SINCAVAGE, EDWARD J. RADETICH, JR., and MICHAEL T. BANCROFT, Defendants.
class action involves claims asserted by plaintiff James
Oetting on behalf of himself and a certified class of
similarly situated individuals who received payments from a
settlement fund in a long-running multidistrict litigation in
the United States District Court for the Eastern District of
Missouri. This case was originally filed as a separate action
in that district but was transferred to this Court pursuant
to 28 U.S.C. § 1404(a) by Order dated July 25, 2011.
Plaintiff seeks damages from defendants for harm suffered by
the class due to fraudulent claims made on the settlement
fund by a former employee of defendant Heffler, Radetich
& Saitta, LLP ("Heffler"), that were authorized
by defendants. Plaintiff asserts claims for negligence,
accountant malpractice, breach of fiduciary duty, and fraud.
before the Court is defendants‘ Motion for
Reconsideration, or in the Alternative, to Certify Order for
Interlocutory Appeal of its August 11, 2017, Memorandum and
Order ("Motion"). In that Memorandum and Order,
this Court ruled that Missouri substantive law applied to the
case, that Missouri law incorporated Pennsylvania‘s
statute of limitations through Missouri‘s borrowing
statute, and that Missouri‘s savings statute, which
allows certain cases to be refiled within one year of
dismissal, barred application of the borrowed Pennsylvania
statute of limitations. Oetting v. Heffler, Radetich
& Saitta, LLP, Civ. No. 11-4757, 2017 WL 3453342
(E.D. Pa. Aug. 11, 2017), Doc. No. 117 [hereinafter,
"August 11 Memorandum and Order"].
their Motion, defendants seek reconsideration of the
following rulings in the August 11, 2017, Memorandum and
Order: (1) that the decision of the United States Court of
Appeals for the Eighth Circuit in Davis v. Liberty
Mutual. Insurance Co., 55 F.3d 1365 (1995), is
distinguishable from this case and does not bar application
of Missouri‘s savings statute to a borrowed statute of
limitations, and (2) that Missouri‘s savings statute
may be applied to two legally distinct plaintiffs, an issue
defendants raise for the first time on reconsideration. In
their Motion, defendants also seek certification for
interlocutory appeal of the question whether docketing of a
supplemental complaint under Federal Rule of Civil Procedure
15(d), without leave of court, commences an action for
purposes of the Missouri savings statute.
facts set forth below are drawn from the Second Amended
Complaint and attached exhibits, the underlying MDL docket,
and the parties‘ briefing on the choice of law issue.
case arises out of securities litigation following a merger
between BankAmerica Corporation ("BankAmerica") and
NationsBank. On February 12, 1999, the Judicial Panel for
Multi-District Litigation issued a Transfer Order,
consolidating the many cases relating to the merger for all
pretrial purposes in the Eastern Division of the Eastern
District of Missouri. Second Am. Compl. ¶ 2. The
multi-district litigation is identified as In re
BankAmerica Corp. Securities Litigation, MDL No. 1264
(E.D. Mo.) ("the MDL"). Four classes were certified
in the MDL on July 6, 1999, two of which are relevant in this
case: The first, the NationsBank Holder Class, consisted of
"all common and preferred shareholders of NationsBank
Corporation who were entitled to vote on the merger of
NationsBank and Old BankAmerica or who held their shares in
NationsBank as of the close of business on September 30,
1998." Order Relating to Class Certification at 3,
In re BankAmerica Corp., No. 99-md-1264 (E.D. Mo.
July 6, 1999), Doc. No. 39. The second class, the NationsBank
Purchaser Class, consisted of "all purchasers of
NationsBank securities between August 4, 1998, and September
30, 1998." Id. David Oetting, a former
plaintiff in this case, was a representative of only the
NationsBank Holder Class. Id. at 4. James Oetting, the
current class representative in this case, was not a class
representative in the MDL, id. at 4, and later
withdrew as a plaintiff in the MDL. Order, In re
BankAmerica Corp., No. 99-md-1264 (E.D. Mo. May 15,
2001), Doc. No. 236. A settlement was approved in the MDL on
September 20, 2002, with $333.2 million to be paid to the
NationsBank Classes. Order at 1, In re BankAmerica
Corp., No. 99-md-1264 (E.D. Mo. Sept. 30, 2002), Doc.
No. 571; Second Am. Compl. ¶¶ 3, 24, Oetting v.
Heffler, Radetich & Saitta, LLP, Civ. No. 11-4757
(E.D. Pa. Sept. 3, 2015) [hereinafter "Second Am.
Court appointed Heffler as the Claims Administrator for the
settlement. Second Am. Compl. ¶¶ 4-9, 25-26. During
Heffler‘s administration of the settlement, but prior
to the first distribution of settlement funds authorized by
the MDL Court by Order dated June 14, 2004, a then-employee
of Heffler, Christian Penta, submitted false claims for
payment from the class settlement fund. Second Am. Compl.
¶¶ 28, 30. He and his co-conspirators received
"payment(s) of over $5.87 million based on [the] false
claims." Id. A grand jury sitting in
Philadelphia, Pennsylvania, returned a sealed indictment
against Penta and four co-conspirators on September 11, 2008,
and the United States Attorney for the Eastern District of
Pennsylvania publicly announced the indictment by press
release in Philadelphia on November 20, 2008. Defs‘
Mem. on Choice of Law Issues ("Defs‘ Mem.")
at 2-3, Oetting, Civ. No. 11-4757 (E.D. Pa. Jan. 27,
2015), Doc. No. 107; id. Ex. G, Press Release,
"Six Charged in $40 Million Class Action Fraud, "
Issued by the United States Attorney for the Eastern District
of Pennsylvania, Nov. 20, 2008 ("Press Release").
October 29, 2009, the law firm of Green Jacobson, P.C.,
former counsel for the NationsBank Classes in the MDL,
docketed a Supplemental Complaint with the MDL Court,
asserting claims against Heffler for breach of fiduciary
duty, negligent misrepresentation, accountant malpractice,
conversion, and money had and received. Supp. Compl., In
re BankAmerica Corp., MDL No. 1264 (E.D. Mo. Oct. 29,
2009), Doc. No. 723. Plaintiffs in the Supplemental Complaint
were identified as the "NationsBank Class."
Id. Shortly afterwards, David Oetting, pro se, filed
a Motion for Appointment of Special Class Counsel to
represent the NationsBank Classes for the claims asserted in
the Supplemental Complaint, arguing that the relationship
between Green Jacobson and Heffler prevented Green Jacobson
from serving as an adequate lead counsel for the classes.
Mot. for Appointment of Special Class Counsel at 6, In
re BankAmerica Corp., MDL No. 1264 (E.D. Mo.
Feb. 12, 2010), Doc. No. 731. Oetting‘s Motion was
denied. Order, In re BankAmerica Corp., MDL No. 1264
(E.D. Mo. Apr. 12, 2010), Doc. No. 743. On May 3, 2010, more
than six months after the docketing of the Supplemental
Complaint, Heffler moved to dismiss or strike the
Supplemental Complaint because, inter alia, the
NationsBank class did not first obtain leave of court as
required by Federal Rule of Civil Procedure 15(d). Mot. to
Strike the Supp. Compl., or in the Alternative, to Dismiss
the Supp. Compl., In re BankAmerica Corp., MDL No.
1264 (E.D. Mo. May 3, 2010), Doc. No. 745. In response, on
May 13, 2010, Green Jacobson moved for leave to file the
Supplemental Complaint. Mot. for Leave to File Supp. Compl.,
In re BankAmerica Corp., MDL No. 1264 (E.D. Mo. May
13, 2010), Doc. Nos. 749-50. The MDL Court ultimately granted
Heffler‘s Motion to Dismiss the Supplemental Complaint
and denied Green Jacobson‘s Motion for Leave to File
the Supplemental Complaint by Order dated November 5, 2010,
concluding that although the allegations in the Supplemental
Complaint were "connected to" the underlying MDL,
the asserted claims were "not similar enough in
substance to the claims in the underlying action to justify
supplemental pleading." Mem. and Order, In re
BankAmerica Corp., MDL No. 1264 (E.D. Mo. Nov. 5, 2010),
Doc. No. 763.
February 8, 2011, former plaintiff David Oetting filed a
complaint in the Eastern District of Missouri on behalf of a
putative class of "all members of the NationsBank class
who have or are to receive a distribution from the
action." Complaint ¶ 24, Oetting, Civil
Action No. 11-253 (E.D. Mo. Feb. 8, 2011). The Complaint did
not define the term "NationsBank class, " but it
stated that $333.2 million-the combined amount awarded to
both the NationsBank Holder and Purchaser classes-was awarded
to the "NationsBank class" in the MDL, suggesting
plaintiffs used the term to include both the NationsBank
Holder and Purchaser Classes. Id. ¶ 11. On July
25, 2011, the case was transferred to this Court on
Heffler‘s motion pursuant to 28 U.S.C. § 1404(a)
for the convenience of the parties and witnesses. Order,
Oetting, Civil Action No. 11-253 (E.D. Mo. July 25,
2011), Doc. Nos. 18, 21. During the course of the litigation,
the Complaint was twice amended to add James Oetting as a
named plaintiff and class representative, to assert
additional claims, and to name additional individual
defendants. The First Amended Complaint did not alter the
definition of the class, while the Second Amended Complaint
provided that the suit was brought on behalf of a class of
"all the members of the NationsBank classes (a) who were
entitled to receive a distribution from the Action in 2004;
(b) who have received a distribution at any time from the
Action and (c) who are yet to receive a distribution from the
Action." Second Am. Compl. ¶ 31.
Memorandum and Order dated December 16, 2015, the Court
granted in part and denied in part defendants‘ Motions
to Dismiss the Second Amended Complaint, concluding that
David Oetting lacked standing to pursue the claims in this
case under Article III of the United States Constitution
because he did not cash the checks issued by the MDL
settlement fund. Pursuant to that Memorandum and Order, the
Court dismissed David Oetting from the case.
Order dated March 24, 2016, the Court certified the plaintiff
class in the case, as follows:
All individuals and entities who are or were members of one
of the NationsBank classes in In re BankAmerica Securities
Litigation, Multidistrict Litigation Number 1264, in the
United States District Court for the Eastern District of
Missouri, who (1) filed valid claims for distribution(s) from
the NationsBank settlement fund, (2) received payment on
their claims from the NationsBank settlement fund, and (3)
are eligible for any additional distributions from the
NationsBank settlement fund.
Oetting, Civil Action No. 11-253 (E.D. Mo. Mar. 24,
2016), Doc. No. 58.
December 2, 2016, counsel for defendants submitted to the
Court a letter requesting a scheduling conference for the
purpose of addressing an "as-yet undetermined choice of
law issue." See Doc. No. 104. The Court held a
scheduling conference on December 14, 2016, and, recognizing
that the parties had not previously raised choice of law
issues, ordered the parties to brief all such issues.
Following an initial round of briefing, on June 1, 2017, the
Court ordered the parties to file supplemental memoranda of
law addressing (1) the applicable statute of limitations, (2)
the applicability of equitable tolling, and (3) the
applicability of the Missouri and Pennsylvania savings
statutes, and the parties did so. In addition, the Court held
a telephone conference on August 4, 2017, at which counsel
for the parties agreed that all choice of law issues,
including the applicable statute of limitations and savings
statute, had been fully briefed and were ripe for decision.
August 11, 2017, this Court ruled that Missouri substantive
law and, through Missouri‘s borrowing statute,
Pennsylvania‘s two-year statute of limitations apply to
plaintiff‘s claims. Memorandum, Oetting, Civil
Action No. 11-4757, WL 3453342 (E.D. Pa. Aug. 11, 2017), Doc
No. 117. The Court also ruled that Missouri‘s savings
statute is applicable to the case, notwithstanding the
application of Pennsylvania‘s statute of limitations.
Id. On August 25, 2017, defendants filed their
Motion for Reconsideration or, in the Alternative, to Certify
Order for Interlocutory Appeal. They seek reconsideration of
the August 11, 2017, Memorandum and Order under Federal Rule
of Civil Procedure 60 and for certification for interlocutory
appeal of that part of the Order relating to docketing of a
supplemental complaint without court approval. See
Doc. No. 118.
move for reconsideration pursuant to Federal Rule of Civil
Procedure 60. Doc 118 at 1. Rule 60(b), however, pertains
only to "final" judgments or orders, defined as
"one which ends the litigation on the merits and leaves
nothing for the court to do but execute the judgment."
Penn W. Assocs. v. Cohen, 371 F.3d 118, 125 (3d Cir.
2004) (quoting Catlin v. United States, 324 U.S.
229, 233 (1945)). Where an order or judgment is not
"final, " relief is unavailable under Rule 60(b).
the limitation on Rule 60(b), a district court retains
inherent authority to reconsider any previous ruling in the
same litigation. Santamarina v. Sears, Roebuck &
Co.,466 F.3d 570, 571-72 (7th Cir. 2006). "Rule 60
does not affect, interfere with, or curtail the common-law
power of the Federal courts" in cases over which they
maintain jurisdiction; instead, "the broad power, which
was theirs by the common law, to deal with situations where .
. . relief should be granted from manifest error, remain[s]
inherent in the courts." United States v.
Jerry,487 F.2d 600, 605 (3d Cir. 1973) (quoting
Bucy v. Nevada Construction Co.,125 ...