Weatherly v. Pershing, L.L.C.
| Decision Date | 19 December 2019 |
| Docket Number | C/w 18-11053, Consolidated with 18-11087, Consolidated with 18-11057,No. 18-11052, Consolidated with 18-11056, Consolidated with 18-11072,18-11052 |
| Citation | 945 F.3d 915 |
| Parties | Patsy WEATHERLY; Edith Wichman; Michelle Morrison; Felix Bravo ; Jon Hanna, et al, Plaintiffs–Appellants v. PERSHING, L.L.C., Defendant–Appellee Ethel Bronstein; Mauricio Bigit Posada; Miram Dinora Moreno De Bigit; Martha G. Blanchet; Jose Luis Cabrera Roca, et al, Plaintiffs–Appellants v. Pershing, L.L.C., Defendant–Appellee Jose Diaz; Nancy Diaz; Herman Dittmar; Magaly Vargas Dittmar; Amadeo Montero, et al, Plaintiffs–Appellants v. Pershing, L.L.C., Defendant–Appellee Tom Hawk ; Salma Barbar; Alberto Barbar; Bernardo Ramon Chamorro; Jose E. Colmenares, et al, Plaintiffs–Appellants v. Pershing, L.L.C., Defendant–Appellee Robert Powell; Carlos Alfonsi; Erika Alfonsi; Ida Alterio; Raquel Bassan; Roberto Calderon; Linda Calderon ; Roberto Calvo Murillo; Diana Castresana; Antonio Dotti; Delfina La Rosa; Jesus Garcia; Maria Fernanda Gonzalez; Pablo Guedez; He Huang ; Rafael Camacho, Plaintiffs–Appellants v. Pershing, L.L.C., Defendant–Appellee Braulio A. Vargas Espinosa; Eduardo Belmonte; Mauro Belmonte; Laura Ruiz ; Gian Paolo Belmonte, et al, Plaintiffs–Appellants v. Pershing, L.L.C., Defendant–Appellee |
| Court | U.S. Court of Appeals — Fifth Circuit |
Brian Fitzpatrick, Vanderbilt University School of Law, Nashville, TN, Michael E. Criden, Lindsey Caryn Grossman, Criden & Love, P.A., South Miami, FL, Robert Cecil Gilbert, Esq., Kopelowitz Ostrow Ferguson Weiselberg Gilbert, Coral Gables, FL, for Plaintiffs-Appellants.
Thomas Miles Farrell, Attorney, Houston, TX, Jeffrey J. Chapman, New York, NY, Gilbert Dickey, Washington, DC, Susan E. Groh, Chicago, IL, Brian David Schmalzbach, Richmond, VA, McGuireWoods, L.L.P., Kathy M. Klock, Akerman, L.L.P., West Palm Beach, FL, for Defendant-Appellee.
Before SOUTHWICK, WILLETT, and OLDHAM, Circuit Judges.
These consolidated cases arise from the notorious Stanford Ponzi scheme, the second-biggest investor fraud in U.S. history. Convicted financier Allen Stanford, now serving a 110-year prison term, sold billions of dollars’ worth of bogus CDs to unwitting investors, many of them retirees seeking "safe" investments for their life savings, paying each new investor-victim "profits" out of funds solicited from newly duped investor-victims. Stanford oversaw a sprawling international financial empire. And a phony one.
Stanford used Stanford Group Company to refer investors to Stanford International Bank, Ltd. Plaintiffs–Appellants (the Investors) purchased what they thought were low-risk CDs from SIBL. Defendant–Appellee, Pershing, provided clearing services for SGC.1 The Investors allege that Pershing breached its fiduciary duty and committed indirect fraud under Florida law. But there is a snag. Both claims were filed late under Florida’s statute of limitations. The Investors contend that they were entitled to more time—that the statute of limitations should be tolled because they were putative class members in a previous class action against Pershing. The district court disagreed, holding that the Investors’ claims were late and had no hope of tolling relief.
The question on appeal is simply stated: Are the Investors entitled to tolling? They are not. The Florida Legislature has laid out an exclusive list of tolling exceptions, and class actions are not on the list. The foremost task of legal interpretation is divining what the law is, not what the judge-interpreter wishes it to be. We cannot embellish Florida law under the guise of interpreting it. All to say, we decline to infer such an exception where one does not plainly exist. Embroidering the statute may scratch an equitable itch, but "law, without equity, though hard and disagreeable, is much more desirable for the public good, than equity without law: which would make every judge a legislator, and introduce most infinite confusion."2 Judges must resist the temptation to alter a statute to realign perceived inequities, particularly where, as here, the legislature has proven itself adept at listing exceptions.
The federal policy of tolling for putative class members cannot override the governing statute. Because we hold that the Investors’ claims are barred by Florida’s statute of limitations, we do not reach the merits of those claims.
We AFFIRM the district court’s judgment.
Stanford’s infamous Ponzi scheme became public in February 2009, when the SEC filed its civil complaint. The story was in national newspapers within two days. Later that year, class counsel for swindled investors filed Turk v. Pershing, LLC , No. 9-02199 (N.D. Tex. Nov. 18, 2009), alleging that Pershing, as Stanford’s clearing agent, (1) "was aware or should have been aware of Stanford’s scheme" and (2) profited from Stanford’s shady dealings. Turk had a putative nationwide class of all persons who bought Stanford CDs. But counsel in Turk eventually offered to narrow its Florida subclass to exclude plaintiffs who did not transfer money directly through Pershing.
This case stems from Turk counsel’s attempt to narrow its Florida subclass; the plaintiffs here are those former Turk plaintiffs who did not transfer money directly through Pershing. The Investors filed Weatherly , the first of these cases, on November 20, 2013, and the other five cases between January 28, 2015, and February 2, 2015—all in the Southern District of Florida. The cases were transferred to the Northern District of Texas, home of the Stanford multidistrict litigation.
The Investors assert two claims against Pershing. First, they allege that Pershing committed indirect fraud under Florida law.3 Second, they allege Pershing aided and abetted Stanford’s breaches of fiduciary duty under Florida law.4 A four-year statute of limitations applies to both claims.5
Pershing moved for summary judgment. It argued that all claims were barred by limitations and that the Investors lacked evidence to establish elements on each claim. The district court granted the motion based on the limitations defense. It assumed the Investors should have known of their claims, at the latest, by November 18, 2009, when the Turk class action was filed. Because the Investors filed the first of these cases on November 20, 2013—four years and two days later—these cases were untimely. The district court rejected the argument that the limitations period tolled while the Investors were putative members of the Turk class. It did not address Pershing’s merits-based arguments.
The standards governing this appeal are well settled.
First , the standard of review. We review "grant of summary judgment de novo , applying the same standard on appeal that is applied by the district court."6
Second , the summary-judgment standard. Under Rule 56, summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."7 We review "a district court’s determinations of state law de novo ."8
Without tolling, all six cases were indisputably filed late. The Investors claim that Florida law and federal law support tolling during putative class actions. Pershing says, "no" on both counts. Pershing also contends that not only do the Investors lose under the statute of limitations, but summary judgment is warranted on the merits. We find that neither Florida nor federal law offer the Investors tolling relief, so we decline to reach the merits.
We begin our discussion with Florida law. Because the Investors filed these cases in federal court in Florida, we apply Florida substantive law to the question of whether the Investors’ presence in the Turk lawsuit tolled the statute of limitations for their claims in this case.9 The Florida Supreme Court has not decided whether a statute of limitations is tolled during a putative class action. So we must make "an Erie guess as to what the [Florida] Supreme Court would most likely decide."10 We base our guess, "[a]s a practical matter," on:
(1) decisions of the state supreme court in analogous cases, (2) the rationales and analyses underlying state supreme court decisions on related issues, (3) dicta by the state supreme court, (4) lower state court decisions, (5) the general rule on the question, (6) the rulings of courts of other states to which state courts look when formulating substantive law and (7) other available sources, such as treatises and legal commentaries.11
When making an Erie guess, we do not "adopt innovative theories of state law" but aim simply "to apply that law as it currently exists."12 And we "are emphatically not permitted to do merely what we think best; we must do that which we think the state supreme court would deem best."13
Here, a statute governs the question before us. And when a statute controls, our first stop (and usually our last) is the statutory text. "Text is the alpha and omega of the interpretive process."14 Our precedent demands "unswerving fidelity to statutory language,"15 meaning we take lawmakers at their word and presume they meant what they said.16
Florida law happens to provide a statutory list of grounds for tolling its statutes of limitations. As the district court recognized, and as all parties agree, putative class actions are not on the list. In Florida, statutes of limitations are tolled by:
To continue reading
Request your trial
-
Thomas v. Reeves
...question, I concede uncertainty.").1 United States v. Maturino , 887 F.3d 716, 723 (5th Cir. 2018).2 See Weatherly v. Pershing, L.L.C. , 945 F.3d 915, 921 (5th Cir. 2019) ("[W]hen a statute controls, our first stop (and usually our last) is the statutory text."); United States v. Lauderdale......
-
Vitol, Inc. v. United States
...always "straightforward and easy," "we should not make it gratuitously roundabout and complex").14 See Weatherly v. Pershing, L.L.C. , 945 F.3d 915, 921 (5th Cir. 2019) (Willett, J.) ("Text is the alpha and omega of the interpretive process. Our precedent demands unswerving fidelity to stat......
-
Garcia v. Chiquita Brands Int'l, Inc.
...Texas’ interest in its tolling rule has quite considerable depth. Id. at 1147 (citations omitted); see also Weatherly v. Pershing, LLC , 945 F.3d 915, 925–28 (5th Cir. 2019) (re-affirming Vaught and concluding that, because Florida law does not allow the use of class tolling, state interest......
- Buckner v. Davis, 17-50891