Romero v. Allstate Ins. Co.

Decision Date17 March 2016
Docket NumberCIVIL ACTION NO. 01-3894,CONSOLIDATED WITH NO. 01-6764
Citation170 F.Supp.3d 779
Parties Gene R. Romero, et al., Plaintiffs, v. Allstate Insurance Company, et al., Defendants.
CourtU.S. District Court — Eastern District of Pennsylvania

170 F.Supp.3d 779

Gene R. Romero, et al., Plaintiffs,
v.
Allstate Insurance Company, et al., Defendants.

CIVIL ACTION NO. 01-3894
CONSOLIDATED WITH NO. 01-6764

United States District Court, E.D. Pennsylvania.

Signed March 17, 2016


170 F.Supp.3d 781

John V. Gorman, James P. Walsh, Jr., Morgan, Lewis & Bockius, LLP, Phila, PA, Mary Ellen Signorille, AARP Foundation Lit. (AFL), Michael D. Lieder, Sprenger & Lang, Michael Wilson, Morgan Lewis & Bockius LLP, Washington, DC, Steven H. Doto, Lauletta, Birnbaum, LLC., Turnersville, NJ, Brian M. Ercole, Morgan Lewis, Miami, FL, Coleen M. Meehan, Jacqueline C. Gorbey, K. Catherine Roney, Marisel Acosta, Paul Anton Zevnik, William P. Quinn, Jr., David W. Marston, Jr., Morgan, Lewis and Bockius LLP, Philadelphia, PA, for Plaintiffs.

Christopher Q. King, Denton US LLP, Donna M. Welch, Hariklia Karis, Richard C. Godfrey, Sallie G. Smylie, Brian Borchard, Jordan M. Heinz, Donna M. Welch, Peter A. Bellacosa, Richard C. Godfrey, Sallie G. Smylie, Erica Zolner, Jordan M. Heinz, Kirkland & Ellis LLP, Chicago, IL, Donald R. Livingston, Tia T. Trout Perez, W. Randolph Teslik, Donald R. Livingston, W. Randolph Teslik, Akin, Gump, Strauss Hauer & Feld LLP, Washington, DC, Katherine M. Katchen, Akin Gump Strauss Hauer & Feld, LLP, Philadelphia, PA,

170 F.Supp.3d 782

Peter A. Bellacosa, Erica Zolner, Kirkland & Ellis LLP, New York, NY, for Defendants.

MEMORANDUM

PAPPERT, District Judge

Before the Court are (1) the Romero Plaintiffs' Motion for Reconsideration of the Court's November 12, 2015 Order, or Alternatively, for Certification of the Order for Immediate Appeal1 and (2) the McLaughlin and Harris Plaintiffs-Intervenors' Motion for Reconsideration of the Court's November 12, 2015 Order, or Alternatively, for Certification of the Order for Immediate Appeal.2 The Court grants both motions for reconsideration.

I. FACTUAL BACKGROUND

The underlying facts are well known to the parties, have been repeatedly summarized, and will not be restated at length here. The Court will focus on the facts most relevant to consideration of the current Motions.

On August 1, 2001, following the Allstate Defendants' (“Allstate” or “Defendants”) implementation of the Preparing for the Future Group Reorganization Program (the “Program”), thirty-two Allstate employee agents (the “Romero Plaintiffs”) filed a lawsuit against Allstate and its CEO Edward M. Liddy (“Liddy”). After several years of litigation before Judge John R. Fullam in our Court and an appeal to the Third Circuit Court of Appeals, the case was remanded to the District Court in January 2010, and re-assigned to Judge Ronald L. Buckwalter. In its remand opinion, the Third Circuit instructed the District Court to resolve the validity of a release (the “Release”) signed by most of the Plaintiffs in connection with the Program. If that Release was deemed to be invalid, the District Court was directed to then allow discovery on the merits of the substantive claims raised in the First Amended Complaint.

The Romero Plaintiffs subsequently filed a Second Amended Complaint on July 28, 2010. The parties proceeded through an extensive and litigious period of discovery on the issue of the validity of the Release, culminating in cross-motions for summary judgment at the end of 2013. On February 27, 2014, Judge Buckwalter ruled on those motions, holding that a genuine issue of fact remained as to whether the Release was knowingly and voluntarily signed. Plaintiffs thereafter sought class certification solely as to Release-related issues. Following denial of that motion, the Court determined that the statute of limitations for the non-named Plaintiffs had resumed running, and that any non-named Plaintiffs who had signed the Release were required to file a lawsuit or join the existing one in order to challenge the Release and pursue their substantive claims.

On February 26, 2015, the original Romero Plaintiffs moved for leave to file a Third Amended Complaint in order to add as Plaintiffs 368 former employee-agents who signed the Release as part of the Program. The following day, the same 368 agents filed their own complaint, but did not move to intervene. (See Compl.,

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Abell v. Allstate Ins. Co., No. Civ.A.15–1049.) Shortly thereafter, thirty other Release-signers (“McLaughlin Plaintiffs” and “Harris Plaintiffs”), filed two separate complaints containing factual and legal allegations identical to those in the Third Amended Complaint, and subsequently moved to intervene in the Romero litigation. (See Compl., McLaughlin v. Allstate Ins. Co., No. Civ.A.15–1017 (“McLaughlin Compl.”); Compl., Harris v. Allstate Ins. Co., No. Civ.A.15–1190 (“Harris Compl.”).) All of these complaints alleged (1) the invalidity of the Releases signed by each Plaintiff and Intervenor; (2) violation of section 510 of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq. ; (3) violation of the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621, et seq. ; (4) breach of contract; and (5) breach of fiduciary duty. On April 21, 2015, the Court granted Plaintiffs' Motion for Leave to File a Third Amended Complaint, as well as both Motions to Intervene.

On July 28, 2015, Defendants Allstate and Liddy filed Motions to Dismiss the Romero Plaintiffs' Third Amended Complaint and the Harris and McLaughlin Plaintiffs' Intervenor Complaints. On November 12, 2015, Judge Buckwalter held that these Plaintiffs' state law claims were barred by the doctrines of tender-back and ratification. The Romero Plaintiffs immediately filed the current Motion for Reconsideration, or Alternatively, for Certification for Immediate Appeal on November 27, 2015, and the Harris and McLaughlin Plaintiffs filed an identical Motion on November 30, 2015. Defendants responded to both Motions on December 14, 2015, and the Romero, Harris, and McLaughlin Plaintiffs (collectively, “Plaintiffs”) filed their Reply Briefs on December 30, 2015. This case was reassigned to this Court on February 1, 2015.

II. STANDARD OF REVIEW

A motion for reconsideration may be granted if the moving party shows: (1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court issued its order; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice. Max's Seafood Café v. Quinteros, 176 F.3d 669, 677 (3d Cir.1999). Motions for reconsideration are granted sparingly. Cont'l Cas. Co. v. Diversified Indus., Inc., 884 F.Supp. 937, 943 (E.D.Pa.1995). The grant of such a motion is not proper where it simply asks the court to “rethink what [it] had already thought through—rightly or wrongly.” Glendon Energy Co. v. Borough of Glendon, 836 F.Supp. 1109, 1122 (E.D.Pa.1993) (internal quotations omitted). Motions for reconsideration may not be used “as a means to argue new facts or issues that inexcusably were not presented to the court in the matter previously decided.” Brambles USA, Inc. v. Blocker, 735 F.Supp. 1239, 1240 (D.Del.1990). “Nor may a motion for reconsideration be used to revisit or raise new issues with the benefit of 'the hindsight provided by the court's analysis.”' Marshak v. Treadwell, No. Civ.A.95–3794, 2008 WL 413312, at *7 (D.N.J. Feb. 13, 2008) (quoting United States v. Jones, 158 F.R.D. 309, 314 (D.N.J.1994) ), aff'd in part and remanded by 595 F.3d 478 (3d Cir.2009).

III. DISCUSSION

The current Motions for Reconsideration present a somewhat unique set of circumstances. Plaintiffs' Motions improperly raise new arguments that were never previously submitted for the Court's consideration. The Motions, however, also identify new facts that bear on the arguments previously raised in response to Allstate's Motion to Dismiss—facts which

170 F.Supp.3d 784

compel the Court to rethink the original ruling as to the state law claims.

A. Whether Plaintiffs' Request for Reconsideration is Procedurally Improper

Allstate first asserts that the Motions are procedurally improper. In particular, it alleges that none of the allegations in the Motions fit within the allowable parameters of a motion for reconsideration as defined by Third Circuit jurisprudence.

The Court agrees in large part. Allstate originally filed a broad Motion to Dismiss alleging, inter alia , that all of Plaintiffs' state law claims were barred under the state law tender-back and ratification doctrines. In response, Plaintiffs contended that: (1) Allstate waived the ratification defense; (2) the tender-back/ratification principles are inapplicable to Plaintiffs' challenges to the Release on the grounds of unconscionability, unclean hands, and the part and parcel doctrine; (3) dismissing Plaintiffs' claims pursuant to the tender-back rule would be inequitable under the circumstances of this case; and (4) since at least 2003, Plaintiffs have been offering to return the consideration received for the Release through an offset to any damage award. The Court considered and discussed each of these arguments, but ultimately disagreed.

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