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Blue Cross Blue Shield of Minnesota v. Wells Fargo Bank, N.A.

United States District Court, D. Minnesota

June 8, 2017

Blue Cross Blue Shield of Minnesota as Administrator of the Blue Cross and Blue Shield of Minnesota Pension Equity Plan; CentraCare Health System, on Behalf of Itself and the Sisters of the Order of Saint Benedict Retirement Plan; Supplemental Benefit Committee of the International Truck and Engine Corp. Retiree Supplemental Benefit Trust, as Administrator of the International Truck and Engine Corp. Retiree Supplemental Benefit Trust; Jerome Foundation; Meijer, Inc., as Administrator of the Meijer OMP Pension Plan and Meijer Hourly Pension Plan, Participants in the Meijer Master Pension Trust; Nebraska Methodist Health System, Inc., on Behalf of Itself, and as Administrator of the Nebraska Methodist Hospital Foundation, the Nebraska Methodist Health System Retirement Account Plan, and the Jennie Edmundson Memorial Hospital Employee Retirement Plan; North Memorial Health Care, on Behalf of Itself and as Administrator of the North Memorial Health Care Pension Plan; The Order of Saint Benedict, as the St. John's University Endowment and the St. John's Abbey Endowment; The Twin City Hospitals-Minnesota Nurses Association Pension Plan Pension Committee, as Administrator of the Twin City Hospitals-Minnesota Nurses Association Pension Plan; Administrative Committee of the Joint Hospitals Pension Board, as Administrator of the Twin City Hospitals Pension Plan for Licensed Practical Nurses; The Board of Trustees of the Tuckpointers Local 52 Pension Trust Fund, as administrator of the Tuckpointers Local 52 Pension Trust Fund, and the Board of Trustees of the Chicago Area Joint Welfare Committee for the Pointing, Cleaning and Caulking Industry Local 52, as administrator for the Chicago area Joint Welfare Committee for the Pointing, Cleaning and Caulking Industry Local 52; and The El Paso County Retirement Plan, Plaintiffs,
v.
Wells Fargo Bank, N.A., Defendant.

          Katherine S. Barrett Wiik, Esq., Munir R. Meghjee, Esq., and Thomas L. Hamlin, Esq., Robins Kaplan LLP, counsel for Plaintiffs.

          Bart H. Williams, Esq., and Manuel F. Cachan, Esq., Proskauer Rose; Bradley R. Schneider, Esq., Erin J. Cox, Esq., and Fred A. Rowley, Jr., Esq., Munger Tolles & Olson LLP; and Daniel J. Millea, Esq., Elizabeth V. Kniffen, Esq., Lawrence T. Hofmann, Esq., Lindsey A. Davis, Esq., and Rory D. Zamansky, Esq., Zelle LLP; counsel for Defendant.

          MEMORANDUM OPINION AND ORDER

          DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         This matter is before the Court on Defendant Wells Fargo Bank, N.A.'s Motion to Reconsider. (Doc. No. 692.) For the reasons set forth below, the Court denies the motion.

         BACKGROUND

         The Court assumes the reader's familiarity with the proceedings, which are detailed in the Court's March 14, 2017 order. (Doc. No. 677.) As a short background, Plaintiffs filed a number of claims against Wells Fargo for its handling of certain investments during the Great Recession. Relevant here, some Plaintiffs brought claims under ERISA for breach of fiduciary duty (generally, the “ERISA Plaintiffs”), and other Plaintiffs brought claims for common-law breaches of fiduciary duty (generally, the “Non-ERISA Plaintiffs”). While the sources of the law differed, everyone agreed the duties were the same.

         The Non-ERISA claims were submitted to the jury while the ERISA claims were submitted to the Court as a bench trial. Before the conclusion of the bench trial, the jury returned a verdict (in special verdict form) finding that Wells Fargo had not breached its fiduciary duty to the Non-ERISA Plaintiffs. Wells Fargo then argued that the jury verdict was preclusive on the Court's liability determination for the ERISA Plaintiffs. The Court agreed, and the ERISA Plaintiffs appealed. The Eighth Circuit remanded the case instructing the Court to determine whether the parties waived the preclusive effect of the jury verdict.

         On remand, the Court determined that “given the totality of Defendant's conduct, the Court concludes that Defendant waived the preclusive effect of the jury verdict.” (Doc. No. 677 at 12.) In reaching its decision, the Court considered the entire record of the case, including its extensive procedural history and the parties' submissions. In particular, the Court noted that Wells Fargo had: (1) moved for a bench trial for the fiduciary duty claims; (2) agreed to a trial plan where the Court would find facts and determine liability for the ERISA claims;[1] (3) agreed to submit some ERISA claims to the jury but not others; and (4) failed to make clear when asked that it considered the jury verdict to be preclusive on the ERISA claims.

         After the March 14, 2017 order, Wells Fargo filed a letter requesting permission to file a motion to reconsider. On April 13, 2017, the Court granted the request in part. The Court allowed Wells Fargo to file a motion to reconsider addressing: (1) Wells Fargo's decision to submit some ERISA claims to the jury but not others; and (2) the parties' discussions on the procedural effect of the jury verdict.[2]

         A. The Parties' Decision to Split ERISA Claims

         The parties faced certain issues after the Court ordered that the ERISA claims would be tried as a bench trial, but that the common-law fiduciary-duty claims would be submitted to the jury. One of those issues was how the parties would proceed with plaintiffs who had both ERISA and non-ERISA fiduciary-duty claims. In resolving the issue, the parties agreed to submit to the jury the ERISA claims associated with North Memorial because the ERISA and non-ERISA funds were inextricably commingled. For Nebraska Methodist Jennie Edmundson Hospital Fund, however, the parties could separate out the ERISA funds and therefore agreed to have those claims submitted as part of the bench trial. (Doc. No. 693 (“Def.'s Br.”) at 8.) Wells Fargo considered the amounts relatively modest in the context of the larger damages sought. (Tr. at 532.) In its March 14, 2017 order, the Court found that the splitting of the claims appeared to be inconsistent “with the notion that [Wells Fargo] expected the jury verdict to be binding on the ERISA claims.” Blue Cross Blue Shield of Minn. v. Wells Fargo Bank, N.A., Civ. No. 11-2529, 2017 WL 1373866, at *5 (D. Minn. Mar. 14, 2017).

         B. Discussion Regarding the Procedural Effect of the Jury Verdict

         Additionally, toward the end of the trial and in the context of Wells Fargo's Motion as a Matter of Law, Wells Fargo made statements that appeared inconsistent with the notion that Wells Fargo considered the jury verdict preclusive. During the argument on Wells Fargo's motion, the Court asked about the Non-ERISA Plaintiffs' claim for an injunction under the Minnesota Deceptive Trade Practices Act (“DTPA claim”):

But with respect to not submitting the [DTPA claim] to the jury, what's the procedural -- I want to just make sure there's a meeting of the minds by counsel, well, here's -- we agree to that but we don't agree, or we do agree and here's ...

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