July 14, 2017

Jenner & Block won a victory for Northern Trust when a judge dismissed a complaint filed by beneficiaries of a trust in its portfolio.  The judge also denied as moot the plaintiffs’ motion for class certification.  In Lindie L. Banks et al v. Northern Trust Corporation, the plaintiffs purportedly represented a putative class consisting of beneficiaries of trusts for which Northern Trust serves as trustee and has exclusive investment discretion.  The plaintiffs alleged that Northern Trust undertook a “plan” or “program” to enrich themselves by investing trust assets in company-affiliated investment funds, violating their fiduciary duties.  The plaintiffs sued in December 2016; in June 2017, the court dismissed the original complaint, finding that the claims were precluded by the Securities Litigation Uniform Standards Act (SLUSA) of 1998.  Days later, the plaintiffs filed a first amended class action complaint.  The firm argued that the amended complaint should also be dismissed because the claims were still precluded by SLUSA.  “Defendants argue that the only changes Plaintiffs made to the allegations of their First Amended Complaint were to remove ‘securities law buzzwords’ and delete ‘paragraphs from the original [C]omplaint that obviously triggered SLUSA preclusion, while leaving the substance of their claims intact…The Court agrees,” wrote US District Judge John F. Walter of the Central District of California.  According to his July 14, 2017, ruling, SLUSA requires the dismissal of any “covered class action” alleging that the defendant misrepresented or omitted a material fact or used or employed manipulative or deceptive device in connection with the purchase or sale of a covered security.  The team representing Northern Trust was led by Partner Craig C. Martin and included Partners Amanda S. Amert, Michael T. Brody, Matthew R. Devine, Kenneth K. Lee, Ashley M. Schumacher and Daniel J. Weiss and Associates James Dawson, Brienne M. Letourneau, Laura L. Norris, Lina R. Powell, Chris M. Sheehan, Jennifer S. Senior, and Nathaniel K.S. Wackman.