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Henderson v. The Bank of New York Mellon National Association

United States District Court, D. Massachusetts

September 25, 2017

ASHBY HENDERSON and THOMAS HERSHENSON, Individually and on Behalf of All Others Similarly Situated, Plaintiffs,
v.
THE BANK OF NEW YORK MELLON, NATIONAL ASSOCIATION, Defendants.

          MEMORANDUM AND ORDER

          Patti B. Saris Chief United States District Judge

         This proposed class action claims that defendant Bank of New York Mellon, National Association (“BNY Mellon”), the trustee for thousands of trusts, breached its fiduciary duties to its trust beneficiaries in two ways: by imprudently investing trust assets in poorly performing proprietary and affiliated investment vehicles and by charging unauthorized fees for the preparation of tax returns.

         The plaintiffs move for class certification. Docket No. 285. As part of its opposition, BNY Mellon moves to strike putative class representative Ashby Henderson on the basis of inadequacy. Docket No. 319. BNY Mellon also filed its motion for summary judgment ahead of schedule, Docket No. 315, and sought to defer decision on class certification until after adjudication of its motion to strike and its motion for summary judgment, Docket No. 322.

         The Court DENIES BNY Mellon's motion to strike putative class representative Ashby Henderson (Docket No. 319). Because the other class certification issues are intertwined with the merits of the case and the summary judgment briefing is not yet complete, the Court DEFERS decision on the plaintiffs' motion for class certification (Docket No. 285). Once the Court reviews the full summary judgment briefing, the Court will determine the proper order of decision between class certification and summary judgment.

         DISCUSSION

         I. Background

         Ashby Henderson is a beneficiary of a trust administered by BNY Mellon. She is a purported class representative for both sets of claims in this suit: that BNY Mellon imprudently invested trust assets in poorly performing proprietary and affiliated investment vehicles and that BNY Mellon charged its trusts unauthorized fees for the preparation of tax returns. The other named plaintiff, Thomas Hershenson, is only a purported class representative for the claim of unlawful tax preparation fees.

         II. Procedural Posture

         BNY Mellon seeks to strike class allegations related to Henderson under Federal Rules of Civil Procedure 12(f) and 23(d)(1)(D) on the basis that Henderson would not be an adequate class representative. Docket No. 319. Rule 12(f) allows a court to “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). Striking class allegations under Rule 12(f) is disfavored. Manning v. Boston Med. Ctr. Corp., 725 F.3d 34, 58- 60 (1st Cir. 2013)(vacating the Court order striking the class allegations on the pleadings). Rule 23(d)(1)(D) allows a court to “require that the pleadings be amended to eliminate allegations about representation of absent persons and that the action proceed accordingly.” Fed.R.Civ.P. 23(d)(1)(D).

         BNY Mellon's motion is not based solely on the pleadings. Rather, BNY Mellon's motion is based on evidence outside of the four corners of the pleadings, including the deposition testimony of Henderson and the unusual history of this case. As such, a motion to strike class allegations is an ill-fitting procedural vehicle for BNY Mellon's argument. As the plaintiffs' motion for class certification had already been filed, the better course would have been for BNY Mellon to include its arguments in its opposition to the plaintiffs' motion for class certification.

         While the Court could deny the motion as procedurally deficient, the Court will treat it as a partial opposition to the motion for class certification. The burden of showing compliance with the Rule 23 requirements remains on the party seeking certification, namely the plaintiffs. See In re Nexium Antitrust Litig., 777 F.3d 9, 18 (1st Cir. 2015).

         III. Adequacy Analysis

         BNY Mellon's instant motion challenges only the adequacy prong of Rule 23, under which a class action may proceed only if “the representative parties will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a)(4). The First Circuit has stated that there are two elements to the adequacy requirement: “first that the interests of the representative party will not conflict with the interests of any of the class members, and second, that counsel chosen by the representative party is qualified, experienced and able to vigorously conduct the proposed litigation.” Andrews v. Bechtel Power Corp., 780 F.2d 124, 130 (1st Cir. 1985).

         BNY Mellon argues that Henderson does not meet the adequacy requirement for two reasons. First, BNY Mellon argues that Henderson does not have a sufficient understanding of the case to protect the interests of the class. Docket No. 320 at 14. Second, BNY Mellon argues that rather than meaningfully participating in her case, Henderson has abdicated control of the case to Brian McTigue, a lawyer that BNY Mellon argues is unfit to represent the interests of the class. Id. at 18. Finally, BNY Mellon argues that Henderson's reliance ...


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