Iowa Public Employees' Retirement System v. Bank of America Corporation

Background

The court entered a Final Judgment and Order of Dismissal regarding the Credit Suisse defendants after a hearing on the plaintiffs’ request for final approval of a settlement dated January 20, 2022. The plaintiffs were Iowa Public Employees’ Retirement System; Los Angeles County Employees Retirement Association; Orange County Employees Retirement System; Sonoma County Employees’ Retirement Association; and Torus Capital, LLC, acting for themselves and others similarly situated. The opinion’s caption also lists Merrill Lynch entities, Credit Suisse entities, Goldman Sachs entities, J.P. Morgan entities, Morgan Stanley entities, Prime Dealer Services Corp., Strategic Investments I Inc., UBS entities, and EquiLend entities as defendants.

Settlement Class and Certification

For settlement purposes only, the court certified a class consisting of people and entities that, directly or through an agent, entered into stock-loan transactions with specified prime-broker defendants, their direct or indirect parents, subsidiaries, or divisions, or the released Credit Suisse parties in the United States from January 7, 2009, through January 20, 2022. Stock-loan transactions were defined to include temporary stock loans involving collateral, but not non-equity securities lending or stock-repurchase transactions.

The court found that the requirements for a class action under Rules 23(a) and 23(b)(3) were satisfied solely for settlement purposes. It found that the class was numerous, common legal and factual questions predominated, the plaintiffs’ claims were typical, the plaintiffs and their counsel adequately represented the class, and a class action was the superior method for resolving the dispute. Quinn Emanuel Urquhart & Sullivan, LLP, and Cohen Milstein Sellers & Toll PLLC were appointed as settlement class counsel, and the named plaintiffs were appointed as class representatives, also solely for settlement purposes.

The court stated that this settlement-only certification did not waive or prejudice any non-settling defendant’s ability to challenge certification of a class proposed for litigation. It also stated that the settlement certification and related findings could not be used as binding or persuasive authority on a later class-certification motion.

Approval and Dismissal

Under Rule 23(e), the court granted final approval of the settlement after finding that it was fair, reasonable, adequate, and in the best interests of the settlement class. The court found that experienced counsel negotiated the agreement in good faith and at arm’s length, that the case involved serious and contested legal and factual issues, that continued litigation carried uncertainty and expense, and that an immediate monetary recovery outweighed the possibility of obtaining a better result after further litigation. The court also gave substantial weight to the settlement class members’ response.

Except for individual claims of people and entities listed as valid and timely opt-outs, the court dismissed with prejudice the action and all claims covered by the release against the settling defendants and released Credit Suisse parties. The parties were ordered to bear their own costs except as provided in the settlement agreement and other court orders. The court separately recognized that the listed opt-outs were excluded from the settlement class, were not bound by the judgment, and could not claim benefits under the settlement.

Releases and Preserved Claims

Upon the settlement’s effective date, the plaintiffs and settlement class members would release the covered claims against the released Credit Suisse parties and would be permanently barred from bringing those released claims in court, arbitration, or another forum. Claims to enforce the settlement and claims outside the scope of the released claims were preserved.

The released Credit Suisse parties would likewise release claims arising from the class parties’ or class counsel’s institution, prosecution, or settlement of the released claims, except claims concerning enforcement of the settlement. Claims for contribution, indemnification, or similar relief by other defendants against released Credit Suisse parties, insofar as they arose from the released class claims, were also barred to the extent allowed by applicable law.

The judgment expressly preserved the settlement class members’ rights against other defendants in the action, people formerly named in the action, alleged co-conspirators, and other people later added or joined, except as to the settling defendants and released Credit Suisse parties for the released claims. The settlement and judgment were not admissions of wrongdoing or liability.

Continuing Jurisdiction and Effectiveness

The court retained continuing and exclusive jurisdiction over implementation of the settlement, the settlement fund, applications for attorney fees and other awards, and the parties and released persons for interpreting, enforcing, and administering the agreement. The court directed the settling parties to complete the settlement and allowed them to agree to reasonable extensions without another court order.

If the settlement does not become effective, the Final Judgment and Order of Dismissal and related releases will be null and void, the parties will return to their positions as of January 20, 2022, and the action will proceed as though the settlement and related orders had not been entered, subject to specified provisions of the settlement agreement. The clerk was directed to enter the judgment immediately under Rule 54(b). Judge Katherine Polk Failla signed the order on September 11, 2024.