Brief And Special Appendix For Objectors-Appellants AMP Capital

115 Pages·2013·2.93 MB·English

1Case: 133-1573 D1ocumen5t: 158 7 Page:3 1 07/26/2013 100(0890 1)15
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CV
13-1677-cv( ), 13-1798-cv( ),
CON CON
13-1830-cv( ), 13-1853-cv( )
CON CON
IN THE
United States Court of Appeals
FOR THE SECOND CIRCUIT
>>>>
IN RE BANK OF AMERICA CORP. SECURITIES, DERIVATIVE, AND
EMPLOYEE RETIREMENT INCOME SECURITYACT (ERISA) LITIGATION
AMP CAPITAL INVESTORS LIMITED, COLONIAL FIRST STATE INVESTMENTS LTD,
H.E.S.T. AUSTRALIA LTD, MICHAEL WASHENIK, ORLOFF FAMILY TRUST DTD 10/3/91,
ORLOFF FAMILY TRUST DTD 12/31/01, ST. STEPHEN, INC., LEONARD MASIOWSKI,
MARYANN MASIOWSKI, MICHAEL J. RINIS, BABETTE RINIS, MICHAEL J. RINIS, IRA,
Objectors-Appellants,
(Additional Caption on the Reverse and Following Page(s))
On Appeal from the United States District Court
for the Southern District of New York (New York City)
BRIEF AND SPECIAL APPENDIX FOR OBJECTORS-APPELLANTS
AMP CAPITAL INVESTORS LIMITED, COLONIAL FIRST
STATE INVESTMENTS LTD AND H.E.S.T. AUSTRALIA LTD
Hung G. Ta
HUNG G. TA, ESQ. PLLC
250 Park Avenue, 7th Floor
New York, New York 10177
212-572-6434
Attorneys for Objectors-Appellants
AMP Capital Investors Limited,
Colonial First State Investments Ltd
and H.E.S.T. Australia Ltd
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and
CHARLES N. DORNFEST,
Plaintiff-Appellant,
v.
PUBLIC PENSION FUNDS, THE PUBLIC PENSION FUND GROUP, STEVEN J. SKLAR, AS (IRA
ACCOUNT BENEFICIARY), ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED,
RHONDAWILSON, ALMAALVAREZ, MICHAELR. BAHNMAIER, MARKADAMS, ELIZABETH
EAGEN, VERNON C. DAILEY, RICHARD ADAME, ARLENE KAHN, PETRA CHATMAN,
STICHTING PENSIOENFONDS ABP, GRANT MITCHELL, NEW YORK STATE TEACHERS’
RETIREMENT SYSTEM, PUBLIC EMPLOYEES’ RETIREMENT ASSOCIATION OF COLORADO,
STEVE R. GRABER, INDIVIDUALLY, AS ASSIGNEE OF CLAIMS OF THE SRG 2008 TRUST,
SCHWAB SP500 INDEX FUND, SCHWAB 1000 INDEX FUND, SCHWAB INSTITUTIONAL
SELECT SP500 FUND, SCHWAB DIVIDEND EQUITY FUND, SCHWAB CORE EQUITY FUND,
SCHWAB PREMIER EQUITY FUND, SCHWAB FUNDAMENTAL US LARGE COMPANY INDEX
FUND, SCHWAB TOTALSTOCK MARKET INDEX FUND, SCHWAB SP500 INDEX PORTFOLIO,
SCHWAB MARKETTRACK GROWTH PORTFOLIO, SCHWAB MARKETTRACK BALANCED
PORTFOLIO, SCHWAB INVESTMENTS, SCHWAB CAPITAL TRUST, DR. SALOMON MELGEN,
FLOR MELGEN, SFM HOLDINGS LIMITED PARTNERSHIP, INTERNATIONAL FUND
MANAGEMENT S.A., DEKA INTERNATIONAL S.A. LUXEMBURG, DEKA INVESTMENT
GMBH, DI, AARON KATZ, JOEL KATZ, SYLVIA WEISSMANN, PARKER FAMILY
INVESTMENTS L.L.C., JEFFREY R. PARKER, THE 1997 JEFFREY R. PARKER FAMILY
TRUST, DREW E. PARKER, THE 1994 DREW E. PARKER FAMILY TRUST, KEITH D.
PARKER, JULIE M. SORIN, THE 1991 JEFFREYR. PARKER FAMILYTRUST, THE 1994 JULIE
P. MANTELL FAMILYTRUST, MICHAELA. PARKER, MARK D. WENDER, ELLIOT WENDER,
PENINA WENDER, STANLEY L. WENDER, RAZELLE M. WENDER, JILL W. GOLDSTEIN,
JERRY E. FINGER, AMBASSADOR LIFE INSURANCE COMPANY, SELECT INVESTORS
EXCHANGE FUND, L.P., RICHARD FINGER, JEF FAMILY TRUST, 1976 REAL ESTATE
TRUST, WALTER FINGER, THE JERRY E. FINGER FAMILY TRUST D/T/D 12/28/1989, THE
JERRY E. FINGER FAMILY TRUST, LEO R. JALENAK, PEGGY E. JALENAK, KERS & CO.,
ROBERT GEGNAS, 198 LOCHA DRIVE, JUPITER, FL 334587752, STEVEN L. SHAPIRO,
HARVEY M. MITNICK, NATHANA. FRIEDMAN, BONNIE FRIEDMAN, KENNETHA. CIULLO,
JOANNA CIULLO, THOMAS P. DINAPOLI, COMPTROLLER OF THE STATE OF NEWYORK, AS
ADMINISTRATIVE HEAD OF THE NEW YORK STATE AND LOCAL RETIREMENT SYSTEMS
ANDAS SOLE TRUSTEE OF THE NEWYORK STATE COMMON RETIREMENT FUND, SCHWAB
FINANCIAL SERVICES FUND, O. TEMPLE SLOAN, JR.,
Plaintiffs-Appellees,
v.
BANK OF AMERICA CORP., GARY A. CARLIN, NELSON CHAI, KENNETH D. LEWIS,
JOHN A. THAIN, FRANK P. BRAMBLE, SR., WILLIAM BARNET, III, JOHN T. COLLINS,
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GARYL. COUNTRYMAN, TOMMYR. FRANKS, CHARLES K. GIFFORD, MONICAC. LOZANO,
WALTER E. MASSEY, THOMAS J. MAY, PATRICIA E. MITCHELL, THOMAS M. RYAN,
MEREDITH R. SPANGLER, ROBERT L. TILLMAN, JACKIE M. WARD, NEIL A. COTTY,
JOE L. PRICE, BANC OFAMERICA SECURITIES L.L.C., MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED, BANK OFAMERICA, J. STEELEALPHIN, AMYWOODS BRINKLEY,
BARBARAJ. DESOER, LIAM E. MCGEE, TIMOTHY J. MAYOPOULOS, BRIAN T. MOYNIHAN,
BRUCE L. HAMMONDS, RICHARD K. STRUTHERS, BANK OF AMERICA CORPORATION
CORPORATE BENEFITS COMMITTEE DEFENDANTS, BANK OF AMERICA COMPENSATION
AND BENEFITS COMMITTEE DEFENDANTS, KEITH T. BANKS, TERESABRENNER, CAROLT.
CHRIST, ARMANDOM. CODINA, VIRGISW. COLBERT, GREGORYCURL, JOHND. FINNEGAN,
GREGORY FLEMING, FOX-PITT KELTON COCHRAN CARONIA WALLER (USA) L.L.C.,
J.C. FLOWERS & CO., L.L.C., JUDITH MAYHEW JONAS, AULANA L. PETERS, JOSEPH W.
PRUEHER, ANN N. REESE, MICHAEL ROSS, CHARLES O. ROSSOTTI, PETER STINGI,
THOMAS K. MONTAG, KENNETH D. DAVIS, MARTIN I. FINEBERG, KENNETH A. LEWIS,
MERRILL LYNCH & CO., INC., 4 WORLD FINANCIAL CNETER, NEW YORK, NY 10080,
BANK OF AMERICA CORPORATION, 100 N. TRYON STREET, CHARLOTTE, NC 28255,
JOSEPH L. PRICE, JEREMY FINEBERG,
Defendants-Appellees,
and
PETER KRAUS,
Defendant.
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RULE 26.1 CORPORATE DISCLOSURE STATEMENT
Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure, Objectors-
Appellants AMP Capital Investors Limited, Colonial First State Investments Ltd and
H.E.S.T. Australia Ltd disclose the following:
 AMP Capital Investors Limited is a subsidiary of AMP Capital Holdings
Limited, which in turn is a subsidiary of AMP Limited, a publicly-owned
company listed on the Australian Securities Exchange.
 Colonial First State Investments Ltd is a subsidiary of Colonial First State
Asset Management (Australia) Limited, which in turn is a subsidiary of the
Commonwealth Bank of Australia, a publicly-owned company listed on
the Australian Securities Exchange.
 H.E.S.T. Australia Ltd is a private non-governmental party and there is no
parent corporation or publicly-held corporation which owns more than
10% of its stock.
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TABLE OF CONTENTS
JURISDICTIONAL STATEMENT .......................................................................... 1 
ISSUES PRESENTED FOR APPEAL ..................................................................... 2 
STATEMENT OF THE CASE .................................................................................. 2 
STATEMENT OF FACTS ........................................................................................ 4 
A.  Factual Background ............................................................................... 4 
B.  Procedural History ................................................................................. 8 
SUMMARY OF THE ARGUMENT ...................................................................... 12 
ARGUMENT ........................................................................................................... 13 
I.  THE SETTLEMENT VIOLATES THE DUE PROCESS CLAUSE
AND IS THEREFORE VOID. ...................................................................... 13 
A.  The Due Process Clause Requires That Members Of A
Rule 23(b)(3) Class Be Able To Request Exclusion ........................... 14 
B.  To Invoke Their Due Process Right To Request Exclusion,
Rule 23(b)(3) Class Members Are Not Required To Take
Any Action Before Notice Of Class Certification. ............................. 17 
C.  In Order To Effectuate The Due Process Right To Request
Exclusion, The Rule In American Pipe Deems The Claims
Of All Absent Class Members To Be Interposed Upon The
Timely Commencement of The Class Action. .................................... 18 
D.  Applying The Rule In American Pipe To The Statute Of
Repose Would Not Violate The Rules Enabling Act. ......................... 22 
E.  The District Court’s Incorrect Decision In Footbridge
Resulted In Due Process Being Denied To The Class. ....................... 26 
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II.  THE DISTRICT COURT ABUSED ITS DISCRETION BY FAILING
TO AFFORD CLASS MEMBERS A “SECOND” OPPORTUNITY
TO REQUEST EXCLUSION UNDER RULE 23(e)(4). .............................. 27 
A.  Rule 23(e)(4) Encourages District Courts To Afford Rule 23(b)(3)
Class Members A Second Opportunity To Request Exclusion .......... 27 
B.  A Second Opportunity To Request Exclusion Was Warranted
Because Of The Prejudice To Class Members Caused By The
District Court’s Incorrect Footbridge Decision .................................. 29 
C.  A Second Opportunity To Request Exclusion Was Warranted
By The Disclosure, After The Class Notice, Of Voluminous
New Evidence Underscoring Defendants’ Liability ........................... 31 
CONCLUSION ........................................................................................................ 36 

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TABLE OF AUTHORITIES

Cases
Abrahamson v. Bd. of Education,
374 F.3d 66 (2d Cir. 2004) ............................................................................ 14
Amchem Products, Inc. v. Windsor,
521 U.S. 591 (1997)....................................................................................... 15
American Pipe & Constr. Co. v. Utah,
414 U.S. 538 (1974)............................................................................... passim
Bridgeport Guardians, Inc. v. Delmonte,
602 F.3d 469 (2d Cir. 2010) .......................................................................... 27
Califano v. Yamasaki,
442 U.S. 682 (1979)....................................................................................... 25
Ceres Partners v. GEL Associates,
918 F.2d 349 (2d. Cir. 1990) ......................................................................... 19
City of Pontiac Gen. Employees’ Ret. Sys. v. MBIA, Inc.,
637 F.3d 169 (2d Cir. 2011) .......................................................................... 14
Crowell v. Benson,
285 U.S. 22 (1932) ......................................................................................... 24
Eisen v. Carlisle & Jacquelin,
417 U.S. 156 (1974)....................................................................................... 29
Footbridge Limited Trust v. Countrywide Financial Corp.,
770 F. Supp. 2d 618 (S.D.N.Y. 2011) ................................................... passim
Gert v. Elgin Nat. Industries, Inc.,
773 F.2d 154 (7th Cir. 1985) ......................................................................... 26
Georgine v. Amchem Products, Inc.,
160 F.R.D. 478 (E. D. Pa. 1995) ................................................................... 30
Hecht v. United Collection Bureau, Inc.,
691 F.3d 218 (2d Cir. 2012) .......................................................................... 16
iii
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Impervious Paint Indus., Inc. v. Ashland Oil,
508 F. Supp. 720 (W. D. Ky. 1981) .............................................................. 30
In re AMF Bowling Securities Litigation,
334 F. Supp. 2d 462 (S.D.N.Y. 2004) ........................................................... 28
In re Bank of America Corp. Securities, Derivative, and Employee Retirement
Income Security Act (ERISA) Litigation,
757 F. Supp. 2d 260 (S.D.N.Y. 2010) ............................................................. 8
In re Bank of America Corp. Securities, Derivative, and Employee Retirement
Income Security Act (ERISA) Litigation, No. 09-MD-2058 (PKC),
2011 WL 3211472 (S.D.N.Y. July 29, 2011) ........................................... 8, 34
In re Bank of America Corp. Securities, Derivative, and Employee Retirement
Income Security Act (ERISA) Litigation,
281 F.R.D. 134 (S.D.N.Y. 2012) .................................................................3, 9
In re Federal Skywalk Cases,
97 F.R.D. 370 (W.D. Mo. 1983).................................................................... 30
Joel A. v. Giuliani,
218 F.3d 132 (2d Cir. 2000) .......................................................................... 27
Joseph v. Wiles,
223 F.3d 1155 (10th Cir. 2000) ..................................................................... 20
Nilsen v. York County,
228 F.R.D. 60 (D. Me. 2005) ......................................................................... 28
Phillips Petroleum Co. v. Shutts,
472 U.S. 797 (1985)....................................................................................... 17
Police & Fire Retirement System of the City of Detroit v.
IndyMac MBS, Inc., --- F.3d ---, No. 11-2998-cv,
2013 WL 3214588 (2d Cir. June 27, 2013) ........................................... passim
Shapiro v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
495 F.2d 228 (2d Cir. 1974) .......................................................................... 25
Take-Two Interactive Software, Inc. v. Brant,
No. 06 Civ. 05279 (LTS), 2010 WL 1257351 (S.D.N.Y. Mar. 31, 2010) .... 19
iv
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Tcherepnin v. Knight,
389 U.S. 332 (1967)....................................................................................... 25
Wal-Mart Stores, Inc. v. Dukes,
131 S. Ct. 2541 (2011) ................................................................................... 16
Wal-Mart Stores, Inc. v. Visa U.S.A., Inc.,
396 F.3d 96 (2d Cir. 2005) ............................................................................ 14
Zadvydas v. Davis,
533 U.S. 678 (2001)....................................................................................... 25
Statutes
28 U.S.C. § 1331 ........................................................................................................ 1
Rules Enabling Act, 28 U.S.C. § 2072(b) ................................................... 13, 22, 25
Securities Exchange Act of 1934, Section 10(b) ............................................. passim
Securities Exchange Act of 1934, Section 14(a) ............................................. passim
Securities Exchange Act of 1934, Section 20(a) ....................................................... 1
Securities Exchange Act of 1934, Section 27. ........................................................... 1
Rules
Fed. R. Civ. P. 23(b)(1) ............................................................................................ 16
Fed. R. Civ. P. 23(b)(2) ............................................................................................ 16
Fed. R. Civ. P. 23(b)(3) .................................................................................... passim
Fed. R. Civ. P. 23(c)(2)(B) ............................................................................... 16, 17
Fed. R. Civ. P. 23(e)(4) .................................................................................... passim

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Other Authorities
American Law Institute, Principles of the Law of
Aggregate Litigation (2010) .......................................................................... 28
Benjamin Kaplan, A Prefatory Note, 10 B.C. Ind. & Com. L. Rev. 497 (1969) ..... 14
Benjamin Kaplan, Continuing Work of the Civil Committee:
1966 Amendments of the Federal Rules of Civil Procedure (I),
81 HARV. L. REV. 356 (1967) ........................................................................ 15
Gretchen Morgenson, Merrill Losses Were Withheld Before
Bank Of America Deal, NEW YORK TIMES (June 3, 2012) ............................ 34
Judicial Conference, Report of the Judicial Conference of the United States on
Class Action Settlements (February 2006) .................................................... 28
Stephen B. Burbank, The Class Action Fairness Act of 2005
in Historical Context: A Preliminary View,
156 U. PA. L. REV. 1439 (2008) ………………………………………...….17

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