United States District Court, D. Minnesota
MATTHEW LUSK and ST. CLAIR EMPLOYEES' RETIREMENT SYSTEM, individually and on behalf of all others similarly situated, Plaintiffs,
BAHRAM AKRADI, GILES H. BATEMAN, JACK W. EUGSTER, GUY C. JACKSON, JOHN K. LLOYD, MARTHA A. MORFITT, JOHN B. RICHARDS, and JOSEPH S. VASSALLUZZO, Defendants.
T. Wissbroecker, ROBBINS GELLER RUDMAN & DOWD LLP, Kai H.
Richter and Carl F. Engstrom, NICHOLS KASTER, PLLP, Jason M.
Leviton and Jacob A. Walker, BLOCK & LEVITON LLP, for
plaintiffs Matthew Lusk and St. Clair Employees'
K. Nichols, Thomas P. Swigert, Lincoln S. Loehrke, and
Caitlin L. D. Hull, DORSEY & WHITNEY LLP, for defendant
Matthew B. Kilby, Wendy J. Wildung, and Cicely R. Miltich,
FAEGRE BAKER DANIELS LLP, for defendants Giles H. Bateman,
Jack W. Eugster, Guy C. Jackson, John K. Lloyd, Martha A.
Morfitt, John B. Richards, and Joseph S. Vassalluzzo.
MEMORANDUM OPINION AND ORDER DENYING PLAINTIFFS'
MOTION TO VACATE THE JUDGMENT AND FOR LEAVE TO AMEND
R. TUNHEIM CHIEF JUDGE
Matthew Lusk and the St. Clair County Employees'
Retirement System (collectively, “Plaintiffs”)
are former shareholders of Life Time Fitness, Inc.
(“Life Time”). Defendant Bahram Akradi was Life
Time's CEO, and Defendants Giles H. Bateman, Jack W.
Eugster, Guy C. Jackson, John K. Lloyd, Martha A. Morfitt,
John B. Richards, and Joseph S. Vassalluzzo sat on its Board
of Directors (collectively, “Defendants”). After
the Court granted Defendants' Motion for Summary Judgment
on the Pleadings and dismissed the case with prejudice,
Plaintiffs timely filed a Motion to Vacate the Judgment and
for Leave to Amend. The Court will deny the motion because
Plaintiffs have not shown the existence of extraordinary or
exceptional circumstances warranting Rule 59 or Rule 60
relief, even taking into account the Rule 15 considerations
that favor affording parties an opportunity to test their
claims on the merits.
Time is a Minnesota corporation that operates a chain of
health-fitness centers. (Am. Compl. ¶¶ 2, 12, Aug.
31, 2015, Docket No. 87.) This litigation relates to the 2015
purchase of Life Time by several private equity firms.
See Lusk v. Life Time Fitness, Inc., 213 F.Supp.3d
1119, 1124-27 (D. Minn. 2016). Specifically, Plaintiffs
alleged that Life Time and Defendants issued a false or
misleading proxy statement prior to the buyout in violation
of § 14(a) of the Securities Exchange Act and SEC Rule
14a-9, (Am. Compl. ¶¶ 94-100), that Defendants and
the Buyout Group acted as controlling persons of Life Time in
violation of § 20(a) of the Securities Exchange Act,
(id. ¶¶ 101-07), that Defendants breached
fiduciary duties owed to Life Time's shareholders,
(id. ¶¶ 108-12), and that the Buyout Group
aided and abetted Defendants' breach of fiduciary duties,
(id. ¶¶ 113-15). Defendants moved to
dismiss the action, and the Court dismissed all claims except
for breach of fiduciary duties. Life Time, 213
F.Supp.3d at 1137-38.
subsequently moved for judgment on the pleadings. (Def.
Akradi's Mot. for J. on Pleadings, Oct. 28, 2016, Docket
No. 160; Def. Board's Mot. for J. on Pleadings, Oct. 28,
2016, Docket No. 166.) The Court held a hearing on the
motions on February 17, 2017. (Minute Entry, Feb. 17, 2017,
Docket No. 194.) There, counsel for Plaintiffs made two
conditional statements regarding the possibility of seeking
leave to amend. First: “[I]f the Court is inclined to
apply Corwin,  we think that we would need to amend
the pleading to include [troubling facts that shareholders
did not know] and some other spurious allegations.”
(Tr. at 48:16-21, Mar. 17, 2017, Docket No. 205.) Second:
“If the Court thought Corwin applied, we
should have the opportunity to amend our complaint.”
(Id. at 49:14-15.) Notably, however, counsel for
Plaintiffs did not explicitly move for leave to amend -
conditionally or otherwise. (See generally id.)
the hearing, Plaintiffs filed a “Motion for the
Alternative Relief of Leave to Amend in the Event that the
Court Grants Defendants' Motions for Judgment on the
Pleadings.” (Mot. for Alt. Relief, Mar. 15, 2017,
Docket No. 199.) In it, Plaintiffs claimed to have made
“an oral motion for leave to amend in the event that
this Court were to grant Defendants' Motions.”
(Id. at 2.) Plaintiffs acknowledged their failure to
submit a proposed amendment as required by Local Rule 15.1,
explaining that the written motion was being made “in
advance of any ruling from the Court that would necessitate
leave to amend.” (Id. at 3-4.) The Magistrate
Judge denied the written motion without prejudice for failure
to comply with the Local Rules, disclaiming that her denial
“in no way precludes the District Court from ruling one
way or the other” on what Plaintiffs characterized as
an oral motion. (Text-Only Order, June 16, 2017, Docket No.
Court subsequently granted Defendants' Motions for
Judgment on the Pleadings and dismissed the case with
prejudice. Lusk v. Akradi, No. 15-1911, 2017 WL
3382301, at *7 (D. Minn. Aug. 6, 2017). Two days later,
Plaintiffs filed a letter seeking clarification as to whether
the Court had considered and denied Plaintiffs' purported
“oral motion for leave to amend in the event that the
Court were to grant Defendants' motions.” (Letter
at 1, Aug. 8, 2017, Docket No. 225.) The Court declined to
provide such clarification, and judgment was entered
accordingly. (Order Responding to Letter, Aug. 28, 2017,
Docket No. 227; J., Aug. 28, 2017, Docket No. 228.)
Plaintiffs timely filed the Motion to Vacate the Judgment and
for Leave to Amend under Rules 59 and 60 that is now before
the Court. (Mot. to Vacate, Sept. 25, 2017, Docket No. 229.)
STANDARD OF REVIEW
bring this motion under Rules 59 and 60 of the Federal Rules
of Civil Procedure. “[D]istrict courts in this circuit
have considerable discretion to deny a post-judgment motion
for leave to amend because such motions are disfavored, but
may not ignore the Rule 15(a)(2) considerations that favor
affording parties an opportunity to test their claims on the
merits.” United States ex rel. Roop v. Hypoguard
USA, Inc., 559 F.3d 818, 824 (8th Cir. 2009).
“Leave to amend will be granted if it is consistent
with the stringent standards governing the grant of Rule
59(e) and Rule 60(b) relief.” United States v. Mask
of Ka-Nefer-Nefer, 752 F.3d 737, 743 (8th
59(e) motions “serve the limited function of correcting
‘manifest errors of law or fact or to present newly
discovered evidence.'” United States v. Metro.
St. Louis Sewer Dist., 440 F.3d 930, 933 (8th
Cir. 2006) (quoting Innovative Home Health Care v.
P.T.-O.T. Assocs. of the Black Hills, 141 F.3d 1284,
1286 (8th Cir. 1998)). “Such motions cannot
be used to introduce new evidence, tender new legal theories,
or raise arguments which could have been ...