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Goodman v. AssetMark, Inc.

United States District Court, E.D. New York

October 17, 2014

ASSETMARK, INC., ET AL., Defendants

For Plaintiffs: Bryan L. Arbeit, Jeffrey Kevin Brown, Lenard Leeds, Matthew Ian Marks, Michael Alexander Tompkins, and Rick Ostrove of Leeds Brown Law, P.C., Carle Place, NY; David Corey Katz, James E. Tullman, Joseph Harry Weiss, and Michael Allen Rogovin of Weiss & Lurie, New York, NY.

For Defendants: Mark S. Mulholland of Ruskin Moscou Faltischek, P.C., Uniondale, NY; Reid L. Ashinoff, Brendan E. Zahner, and Sandra Denise Hauser of Dentons U.S. LLP, New York, NY; Joshua Seth Akbar of Dentons U.S. LLP, Phoenix, AZ.

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JOSEPH F. BIANCO, United States District Judge.

Plaintiffs Michael J. Goodman, Clarice Yassick, Steven Yoelin, Martin Wasser,

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and Edward Schiller (collectively, " plaintiffs" ) commenced this securities fraud class action against defendants AssetMark, Inc. (" AssetMark" ), Genworth Holdings, Inc. (" Genworth Holdings" ), and Gurinder S. Ahluwalia (" Ahluwalia" ) (collectively, " defendants" ) on December 22, 2009.[1] They allege that defendants violated Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (" Section 10(b)" ), and Securities and Exchange Commission Rule 10b-5, 17 C.F.R. § 240.10b-5 (" Rule 10b-5" ), and breached their fiduciary duties to plaintiffs. The crux of these claims is that defendants misrepresented the role that Robert Brinker (" Brinker" )--an individual renowned for his expertise in the investment field--played in the management of the BJ Group Services portfolios. According to plaintiffs, they and other members of the putative class relied upon that misrepresentation in deciding to invest with defendants. They claim to have lost millions of dollars as a result.

In an oral ruling on March 30, 2011, the Honorable Leonard D. Wexler granted defendants' motion to dismiss the breach of fiduciary duty claim pursuant to the Securities Litigation Uniform Standards Act of 1998 (" SLUSA" ), which states that " [n]o covered class action based upon the statutory or common law of any State . . . may be maintained in any State or Federal court by any private party alleging . . . a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security." 15 U.S.C. § 78bb(f)(1)(A). On April 15, 2014, after the instant case was reassigned to the undersigned, the Court denied plaintiffs' motion for class certification of the federal securities law claims. See generally Goodman v. Genworth Fin. Wealth Mgmt., Inc., 300 F.R.D. 90 (E.D.N.Y. 2014). Now, as the first step in their effort to attain class certification of their previously dismissed breach of fiduciary duty claim, plaintiffs move for reconsideration of Judge Wexler's order dismissing that claim in light of the Supreme Court's recent decision in Chadbourne & Parke LLP v. Troice, 134 S.Ct. 1058, 188 L.Ed.2d 88 (2014). For the following reasons, the Court denies the motion.

I. Background

The Court set forth the facts and procedural history of this case in its April 15, 2014 Memorandum and Order. See Goodman, 300 F.R.D. at 94-98. The Court reserves discussion of certain allegations in the amended complaint for its analysis of the specific issue raised by the pending motion.

Plaintiffs filed the motion for reconsideration on July 25, 2014. Defendants filed their opposition on September 5, 2014, and plaintiffs filed their reply on September 19, 2014. The Court heard oral argument on October 14, 2014. This matter is fully submitted, and the Court has considered all of the parties' submissions.

II. Standard of Review

Rule 54(b) states that a court may revise an order prior to entering final judgment. See Fed.R.Civ.P. 54(b). The Second Circuit has " limited district courts' reconsideration of earlier decisions under Rule 54(b) by treating those decisions as law of the case, which gives a district court discretion to revisit earlier rulings in the same case, subject to the caveat that 'where litigants have once battled for the

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court's decision, they should neither be required, nor without good reason permitted, to battle for it again.'" Official Comm. of the Unsecured Creditors of Color Tile, Inc. v. Coopers & Lybrand, LLP, 322 F.3d 147, 167 (2d Cir. 2003) (quoting Zdanok v. Glidden Co., 327 F.2d 944, 953 (2d Cir. 1964)). Therefore, a district court may not revise a prior order " unless there is 'an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent a manifest injustice.'" Id. (quoting Virgin A. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992)). " The party moving for reconsideration bears the burden of demonstrating an intervening change of controlling law." In re Fannie Mae 2008 ...

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