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Securian Financial Group, Inc. v. Wells Fargo Bank, N.A.

United States District Court, D. Minnesota

February 10, 2015

Securian Financial Group, Inc., Securian Holding Company, and Minnesota Life Insurance Company, Plaintiffs,
v.
Wells Fargo Bank, N.A., Defendant.

Jeanette M. Bazis, Esq., Kathryn N. Hibbard, Esq., Mark L. Johnson, Esq., Megan M. Walsh, Esq., and Robert J. Gilbertson, Esq., Greene Espel PLLP, counsel for Plaintiffs.

Bart H. Williams, Esq., and Manuel F. Cachan, Esq., Munger Tolles & Olson LLP; Elizabeth V. Kniffen, Esq., Daniel J. Millea, Esq., Lawrence T. Hofmann, Esq., Lindsey A. Davis, Esq., Michael R. Cashman, Esq., Richard M. Hagstrom, Esq., and Rory D. Zamansky, Esq., Zelle Hofmann Voelbel & Mason LLP, counsel for Defendant.

ORDER

DONOVAN W. FRANK, District Judge.

This matter came before the Court for a pretrial hearing on January 28, 2015 and January 29, 2015. Consistent with, and in addition to the Court's remarks from the bench, and based upon the memoranda, pleadings, and arguments of counsel, and the Court having reviewed the contents of the file in this matter and being otherwise duly advised in the premises, the Court hereby enters the following:

ORDER

1. Plaintiffs' Motion in Limine #1 to Preclude Evidence, Opinion, or Argument that the Declaration of Trust Eliminated, Limited, or Modified Fiduciary or Contractual Duties (Doc. No. [216]) is GRANTED IN PART and DENIED IN PART as follows:

a. Evidence, opinion, or argument that the Declaration of Trust eliminated, limited or otherwise modified Wells Fargo's fiduciary duties and responsibilities as an agent and trustee for the Plaintiffs shall be presumptively inadmissible. The existence of a fiduciary duty is a question of law for the Court to decide. The parties are specifically prohibited from making any such argument during opening statements.
b. However, all other evidence, opinion, or argument relating to Wells Fargo's fiduciary duties, including the scope, the nature, and the extent of Wells Fargo's fiduciary responsibilities, and whether they were breached, are issues of fact for the jury, as is the nature and scope of the fiduciary relationship itself.
c. Evidence as to the interpretation and intent of the Declaration of Trust shall be presumptively admissible on the issue of the contractual rights of the parties and whether a breach of contract occurred. This ruling of the Court is made pursuant to the Court's analysis of Article 4 of the Federal Rules of Evidence. The Court will reserve the right to entertain motions relating to limiting instructions to the jury with respect to the applicability of the Declaration of Trust.
d. Consistent with the above, the Court declines to redact Sections 3.1, 8.1 and 8.4 of the Declaration of Trust. However, Section 4.6(b) may be redacted consistent with the parties' stipulation (Doc. No. [265]) and on the Court's corresponding Order (Doc. No. [328]).

2. Plaintiffs' Motion in Limine #3 to Exclude Irrelevant Information About Investments Outside the Wells Fargo Securities Lending Program (Doc. No. [220]) is GRANTED IN PART and DENIED IN PART as follows:

a. The Court concludes that such evidence is presumptively inadmissible pursuant to its Article 4 analysis, including specifically evidence relating to Plaintiffs' Lehman investments held outside the investments at issue in this case, but subject to one exception found below at section c.
b. Absent further order of the Court, the Court concludes that such evidence has no direct or probative relationship to Wells Fargo's Securities Lending Program ("SLP").
Moreover, the ruling of the Court is consistent with the ruling the Court made in Blue Cross & Blue Shield v. Wells Fargo Bank, N.A., Civ. No. 11-2529, Doc. No. 485 at ¶ 2 (D. Minn. June 14, 2013) (" BCBS ") and City of Farmington Hills Emps. Ret. Sys. v. Wells Fargo Bank, N.A., Civ. No. 10-4372, Doc. No. 633 at ¶ 3 (D. Minn. Apr. 3, 2014) (" Farmington "), and, for the same reasons enunciated in those cases, the Court finds that the issues raised by Plaintiffs and Defendant in this motion are not factually or legally distinguishable from the issues presented in BCBS and Farmington on this subject.
c. However, to the extent Wells Fargo can connect such evidence to the SLP program and investments in this case, and assuming proper foundation is laid, subject to objections during trial, such evidence shall be presumptively admissible for the limited purpose of showing what Advantus and Plaintiffs knew at the time of the SLP's losses.

3. Plaintiffs' Motion in Limine #4 to Exclude Irrelevant Information About Other Securities Lending Programs (Doc. No. [224]) is GRANTED as follows:

a. The Court concludes that such evidence is presumptively inadmissible pursuant to Article 4 as well as Rule 104 of the Federal Rules of Evidence on foundational grounds. Moreover, consistent with the Court's ruling in BCBS, Doc. No. 485 at ¶ 4 and Farmington, Civ. No. 10-4372, Doc. No. 633 at ¶ 1, the Court particularly concludes that the evidence of Non-Wells Fargo SLPs does not survive a Rule 403 analysis.
b. This ruling specifically includes evidence about Plaintiff's participation in the SLP operated by Mellon.
c. Absent further order of the Court, the Court concludes that such evidence has no direct or probative relationship to Wells Fargo's SLP.

4. Plaintiffs' Motion in Limine #5 to Exclude Comparisons Between the Performance of the SLP and the Performance of the Equity Market (Doc. No. [228]) is GRANTED IN PART and DENIED IN PART as follows:

a. On the record before the Court, and assuming proper foundation is laid, subject to objections during trial, the Court finds that testimony with respect to the generalized condition of the "financial markets" necessarily includes the "equity" or stock market and survives an Article 4 analysis, including the Court's Rule 403 analysis. To that extent, such testimony shall be presumptively admissible.
b. However, to the extent the primary purpose of the utilization of such evidence by the Defendant is to suggest that they are the same type of investment with the same investment guidelines, such comparisons shall be presumptively inadmissible. Such comparisons do not survive the Court's Article 4 analysis, absent further order of this Court. The Court, however, reserves the right to revisit this issue at trial, outside the presence of the jury.
c. Further, to the extent the primary purpose of the utilization of such evidence by the Defendant is to suggest that Plaintiff's losses were low compared to the losses found in the equity market, such comparisons shall also be presumptively inadmissible. Such ...

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