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Central Laborers'pension Fund v. Dimon

United States District Court, S.D. New York

November 6, 2014

CENTRAL LABORERS' PENSION FUND and STEAMFITTERS LOCAL 449 PENSION FUND, derivatively on behalf of JPMorgan Chase & Co., Plaintiffs,
v.
JAMES DIMON, LINDA B. BAMMANN, JAMES A. BELL, CRANDALL C. BOWLES, STEPHEN B. BURKE, JAMES S. CROWN, TIMOTHY P. FLYNN, LABAN P. JACKSON, MICHAEL A. NEAL, LEER. RAYMOND, WILLIAM C. WELDON, WALTER
v.
SHIPLEY, and ROBERT I. LIPP, Defendants. JPMORGAN CHASE & CO., a Delaware corporation, Nominal Defendant.

OPINION & ORDER

PAUL A. CROTTY, District Judge.

Plaintiffs move for reconsideration of the Court's Opinion and Order, Central Laborers' Pension Fund v. Dimon, 2014 WL 3639185 (S.D.N.Y. July 23, 2014) ("MTD Order"), dismissing their derivative action alleging, inter alia, breach of fiduciary duty with respect to JPMorgan's banking relationship with Bernard Madoff The Court dismissed due to Plaintiffs' failure to make demand upon the Board prior to filing their derivative action. For the following reasons, the motion is denied.

BACKGROUND

As explained more fully in the Court's prior decision, Plaintiffs have filed this derivative action for alleged breach of fiduciary duty, violations of Section 14(a) of the Securities Exchange Act, abuse of control, corporate waste, and unjust enrichment arising out of JPMorgan's banking relationship with Bernard Madoff, the ensuing Deferred Prosecution Agreement ("DPA") with the U.S. Attorney's Office ("USAO"), and the payment of $2.6 billion to federal authorities and civil plaintiffs. See Compl. Plaintiffs allege that JPMorgan, despite being in a position to notice the criminal activity, instead "turn[ed] a blind eye to Madoff's thievery." Id. ¶ 16. Plaintiffs claim that Defendants' actions were motivated by a fear of losing the lucrative accounts of Madoff and one of his longtime customers. Id. ¶¶ 10-12. Prior to filing their complaint, Plaintiffs did not make a pre-litigation demand on the Board, alleging demand futility. Id. ¶¶ 354-81.

In January 2014, JPMorgan entered into a DPA with the USAO in which it stipulated to the DPA's Statement of Facts regarding JPMorgan's tools for identifying suspicious activity by broker-dealer clients. Declaration of David A. Rosenfeld in Opposition to Defendants' Motion to Dismiss the Complaint for Failure to Make a Pre-Litigation Demand ("Rosenfeld Deel."), Ex. 1, ¶ 2. JPMorgan also consented to the filing of a criminal information which charged it with, inter alia, the failure to maintain an effective anti-money laundering program ("AML") and to file a suspicious activity report; JPMorgan also agreed to pay $1.7 billion in penalties. Id. at Ex. 1, ¶ 1, ¶ 3

In April 2014, Defendants moved to dismiss Plaintiffs' Complaint for failure to make a pre-litigation demand on the board. (Dkt. 18). The Court granted this motion, finding that Plaintiffs had failed to plead particularized facts that create a reasonable doubt that a majority of the Board could have exercised disinterested and independent business judgment in considering demand. Motion to Dismiss Order at 11.

DISCUSSION

Standard for Motion for Reconsideration

Reconsideration of a Court's prior decision is "limited" by the doctrine of the law of the case: "where litigants have once battled for the court's decision, they should neither be required, nor without good reason permitted, to battle for it again." Official Comm. of Unsecured Creditors of Color Tile, Inc. v. Coopers & Lybrand, LL.B., 322 F.3d 147, 167 (2d Cir. 2003) (internal quotation marks omitted). Accordingly, decisions should "not usually be changed 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. (internal quotation marks omitted).

"It is not enough... that defendants could now make a more persuasive argument.... The law of the case will be disregarded only when the court has a clear conviction of error with respect to a point of law on which its previous decision was predicated." Fogel v. Chestnutt, 668 F.2d 100, 109 (2d Cir. 1981) (internal quotation marks and citation omitted). "Thus generally, there is a strong presumption against amendment of prior orders." Bergerson v. N.Y. State Office of Mental Health, 652 F.3d 277, 288 (2d Cir. 2011).

II. Analysis

Plaintiffs do not allege any "intervening change in controlling law" or "availability of new evidence." Their assertion of a clear error in support of reconsideration is rejected.

Plaintiffs' motion is the exact danger against which case law warns-a reflexive motion made "to reargue those issues already considered when a party does not like the way the original motion was resolved." In re Optimal U.S. Litig., 813 F.Supp.2d 383, 387 (S.D.N.Y. 2011) (internal quotation marks omitted). Both holdings of which Plaintiffs seek reconsideration were fully briefed by the parties ...


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