The opinion of the court was delivered by: JOHN KOELTL, District Judge
The plaintiffs have moved to alter or amend the judgment
dismissing this action and for reconsideration of this Court's
August 1, 2005 Opinion and Order granting the defendants' motion
to dismiss each of the ten counts alleged in the Second Amended
Complaint and denying the plaintiffs leave to amend. See In re
Eaton Vance Mutual Funds Fee Litig., 380 F. Supp. 2d 222
(S.D.N.Y. 2005). The plaintiffs also move for leave to file a
third amended complaint.
The Second Amended Complaint ("SAC"), filed on August 26, 2004
on behalf of a purported class of persons or entities who held
shares in Eaton Vance Funds between January 30, 1999 and November
17, 2003, alleged ten counts against Eaton Vance and its
subsidiaries, certain Investment Adviser Defendants, Eaton Vance
Distributors, and Trustee Defendants, as well as the Eaton Vance
Funds as nominal defendants. Id. at 224. One of the claims was
asserted derivatively on behalf of the Eaton Vance Funds. These claims stem from allegations that the defendants
used improper means to acquire "shelf-space" for Eaton Vance
mutual funds at brokerage firms.
Count One of the SAC alleged that the Investment Adviser
Defendants and Trustee Defendants violated § 34(b) of the
Investment Company Act of 1940 ("ICA"), 15 U.S.C. § 80a-33(b), by
making misrepresentations and omissions of material facts in
registration statements and reports required by the ICA. Counts
Two and Three alleged that the Investment Adviser Defendants and
Trustee Defendants breached their fiduciary duties to the class
in violation, respectively, of §§ 36(a) and 36(b) of the ICA,
15 U.S.C. §§ 80a-35(a) and (b). Count Four alleged that certain
defendants also violated § 48(a) of the ICA,
15 U.S.C. § 80a-47(a), by causing the Investment Adviser Defendants to
violate §§ 34(b) and 36(a) and (b) of the ICA as set forth in
Counts One, Two, and Three. Count Five alleged a derivative claim
brought on behalf of the Eaton Vance Funds against the Investment
Adviser Defendants under § 215 of the Investment Advisers Act of
1940, 15 U.S.C. § 80b-6. Count Six alleged a violation by all
defendants of the N.Y. Gen. Bus. L. § 349. Counts Seven, Eight,
and Nine alleged breaches of fiduciary duties under common law,
while Count Ten alleged unjust enrichment under common law. Id.
at 228-30. The Court previously held that Counts One, Two, and Four were
barred because there is no private right of action under §§
34(b), 36(a), or 48(a), respectively. Id. at 233. The Court
also dismissed Counts Two, Four, Seven, Eight, Nine, and Ten on
the grounds that they should have been brought as derivative
actions. Id. at 236. Count Three was dismissed because, as
pleaded, it failed to allege a violation of § 36(b), and the
Investment Adviser Defendants and Trustee Defendants were
dismissed on the additional ground that they were not the
recipients of the disputed fees. Id. at 238. The Court
dismissed Count Five for failure to make the demand required by
Fed.R.Civ.P. 23.1, and dismissed Count Six because N.Y. Gen.
Bus. L. § 349 does not apply to securities transactions. Id. at
240. The Court also dismissed Counts Six, Seven, Eight, Nine, and
Ten because they are preempted by the Securities Litigation
Uniform Standards Act ("SLUSA"). Id. at 242. The Court also
noted that it would not exercise supplemental jurisdiction over
the state law claims after the federal claims were dismissed.
Id. Finally, the Court denied leave to amend. Id. The Clerk
thereafter entered judgment dismissing the SAC.
The plaintiffs have now moved to alter or amend the judgment
pursuant to Fed.R.Civ.P. 59(e) and for reconsideration pursuant to Local Civil Rule 6.3.*fn1 They
have also moved to file a third amended complaint.
The plaintiff presents this motion under Fed.R.Civ.P. 59(e)
and Local Civil Rule 6.3, which are governed by the same
standard. See Watson v. United States, No. 04 Civ. 2222, 2005
WL 2560375, at *2 (S.D.N.Y. Oct. 12, 2005); see also Nakano v.
Jamie Sadock, Inc., 98 Civ. 0515, 2000 WL 1010825, at *1
(S.D.N.Y. July 20, 2000) (collecting cases). This
well-established standard is the same as that governing former
Local Civil Rule 3(j). See United States v. Letscher,
83 F. Supp. 2d 367, 382 (S.D.N.Y. 1999) (collecting cases). The moving
party is required to demonstrate that the Court overlooked the
controlling decisions or factual matters that were put before the
Court in the underlying motion and which, had they been
considered, might have reasonably altered the result reached by
the Court. Nakano, 2000 WL 1010825, at *1. The decision to
grant or deny a motion for reconsideration "rests within the
sound discretion of the district court." Id. The rule is
"narrowly construed and strictly applied so as to avoid
repetitive arguments on issues that have been considered fully by
the court." Walsh v. McGee, 918 F. Supp. 107, 110 (S.D.N.Y. 1996) (internal citation and quotation marks omitted); see also
Nakano, 2000 WL 1010825, at *1.
The Court previously held that Counts One, Two, and Four were
barred because there are no private rights of action under §§
34(b), 36(a), or 48(a) of the ICA, respectively, in light of the
decision by the Second Circuit Court of Appeals in Olmsted v.
Pruco Life Insurance Co. of New Jersey, 283 F.3d 429 (2d Cir.
2002). The plaintiffs argue that Olmsted and subsequent cases
that relied on Olmsted are called into question by Jackson v.
Birmingham Bd. of Educ., 125 S.Ct. 1497 (2005). They argue that
Jackson and the legislative history for § 36(a) support a
finding that §§ 34(b), 36(a), and 48(a) have implied private
rights of action.
Jackson was considered at argument, and was not discussed in
the Court's previous opinion because it is inapplicable.
Olmsted relied on the Supreme Court's analysis in Alexander v.
Sandoval, 532 U.S. 275 (2001), to determine whether Congress
intended to create private rights of action. Olmsted found that
Congress did not intend to create private rights of action under
§§ 26(f) and 27(i) of the ICA. Jackson did not alter the
Supreme Court's emphasis on statutory text in determining whether
Congress intended to create a private right of action and did not question the analytical framework adopted in
Sandoval. Having previously found an implied right of action
under Title IX more than twenty-five years ago, the Supreme Court
in Jackson stated: "In step with Sandoval, we hold that Title
IX's private right of action encompasses suits for retaliation,
because retaliation falls within the statute's prohibition of
intentional discrimination on the basis of sex." Jackson,
125 S.Ct. at 1507. The Supreme Court noted that it reached this
result "based on the statute's text." Id.
Jackson does not alter this Court's analysis under Olmsted
and Sandoval, and thus there is no basis for reconsidering this
Court's prior holding. Indeed, the Court's prior holding has been
cited by several other courts also finding that there are no
private rights of action under §§ 34(b), 36(a), or 48(a). See
Stegall v. Ladner, NO. CIV.A. 05-10062, 2005 WL 2709127, at *8
(D. Mass. Oct 14, 2005); Hamilton v. Allen, NO. CIV.A. 05-110),
2005 WL 2660356, at *6 (E.D. Pa. Oct 14, 2005); Yameen v. Eaton
Vance Distributors, Inc., NO. CIV.A. 03-12437, 2005 WL 2709116,
at *1 n. 1 (D. Mass. Oct 14, 2005); In re Davis Selected Mutual
Funds Litig., No. 04 Civ. 4186, 2005 WL 2509732, at *2 (S.D.N.Y.
Oct. 11, 2005); In re Franklin Mutual Funds Fee Litig.,
388 F. Supp. 2d 451, 466 (D.N.J. 2005); In re Mutual Funds Inv.
Litig., 384 F. Supp. 2d 845, 869-70 (D. Md. 2005). IV.
The Court previously dismissed Count Three, which alleged a
claim under § 36(b) of the ICA against Eaton Vance Distributors,
the Investment Adviser Defendants, and the Trustee Defendants.
The Court found that Count Three alleged improper payments that
were outside the scope of § 36(b), rather than excessive fees,
and thus should be dismissed. The Court also found that Count
Three must be dismissed against the Investment Adviser Defendants
and the Trustee ...