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I.B. of T. Grocery and Food Employees Welfare Fund v. Regions Fin. Corp.

United States District Court, N.D. Alabama, Southern Division

December 18, 2014

LOCAL 703, I.B. OF T. GROCERY AND FOOD EMPLOYEES WELFARE FUND, et al., PLAINTIFFS,
v.
REGIONS FINANCIAL CORPORATION, et al., DEFENDANTS

For Local 703, I B of T Grocery and Food Employees Welfare Fund, individually and on behalf of all others similarly situated, Plaintiff: Andrew J Brown, Matthew Isaac Alpert, ROBBINS GELLER RUDMAN & DOWD LLP, San Diego, CA; James S Ward, WARD & WILSON LLC, Birmingham, AL; Patrick C Cooper, WARD & WILSON LLC, Homewood, AL.

For District No. 9, I.A. of M. & A.W. Pension Trust, Lead Plaintiff, Employees' Retirement System of the Virgin Islands, Lead Plaintiff, Plaintiffs: Andrew J Brown, ROBBINS GELLER RUDMAN & DOWD LLP, San Diego, CA.

For Plaintiffs' Liaison Counsel, Plaintiff: Larry B Moore, MOORE BERRY & LINVILLE, Florence, AL; Patrick C Cooper, WARD & WILSON LLC, Homewood, AL; Roger H Bedford, Jr, ROGER BEDFORD & ASSOCIATES PC, Russellville, AL.

For Regions Financial Corporation, Defendant: John N Bolus, Maibeth J Porter, MAYNARD COOPER & GALE PC, Birmingham, AL; Richard Jon Davis, MAYNARD COOPER & GALE, Birmingham, AL.

For C Dowd Ritter, Irene Esteves, Alton E. Yother, Defendants: Julian D Butler, SIROTE AND PERMUTT PC, Huntsville, AL.

For Burr & Forman LLP, ThirdParty Defendant: Kip Allen Nesmith, BURR & FORMAN LLP, Birmingham, AL.

ORDER

INGE PRYTZ JOHNSON, SENIOR UNITED STATES DISTRICT JUDGE.

Pending before the court is Regions Financial Corporation's motion to amend the Class definition (doc. 270), and the plaintiffs' response to said motion (doc. 274). Plaintiffs' having stated that they do not oppose defendant's proposed amendment, to clarify that the class is comprised of holders of " common stock" rather than " securities; "

It is therefore ORDERED by the court that defendant Regions Financial Corporation's motion to amend be and hereby is GRANTED. The Class to be certified is therefore defined as:

All persons or entities who, between February 27, 2008, and January 19, 2009 (the " Class Period"), purchased or otherwise acquired the common stock of Regions Financial Corporation (" Regions"), and were damaged thereby. Excluded from the Class are current and former defendants, members of the immediate family of any current or former defendants, the directors, officers, subsidiaries and affiliates of Regions, any person, firm, trust, corporation, officer, director, or other individual or entity in which any current or former defendant has a controlling interest, and the legal representatives, affiliates, heirs, successors-in-interest or assigns of any such excluded party.

The court has also considered the plaintiffs' motion to approve the form and manner of Class Notice (doc. 269) and defendant Regions Financial Corporation's (" Regions") opposition to said motion (doc. 271). To the extent that defendant Regions opposed the term " securities" and sought to substitute the term " common stock, " the defendant's opposition is MOOT, for the reasons set forth above.

However, in its opposition Regions also challenges the Class Notice language that " defendants made materially false and misleading statements and omissions about the quality of Regions' loans..." See e.g., doc. 271 at 3-4. Defendant argues that plaintiffs only raised defendants " false and misleading statements" and not " omissions." Id., at 4-5. The court finds this distinction to be one without meaning. As the Eleventh Circuit noted in its opinion in this case,

... a confirmatory misrepresentation is like an omission, because it is an affirmative representation that omits negative information. Thus, like we do here, the District Court noted that this type of misrepresentation would likely yield price stability rather than volatility, just as we would expect with a traditional omission. All the District Court did in this case was recognize the similarity between two different but closely related factual scenarios and draw on precedent from both areas to render its decision. The District Court's decision to do so evidences good, reasoned judging, not an abuse of discretion.

Local 703, I.B. of T Grocery & Food Employees Welfare Fund v. Regions Financial Corp., 762 F.3d 1248, 1256, n.5 (11th Cir. 2014). The failure to disclose a material fact when a duty to do so exists is just as much of a misrepresentation as the affirmative disclosure of a misleading fact. In Basic, Inc. v. Levinson, 485 U.S. 224, 231, 108 S.Ct. 978, 983, 99 L.Ed.2d 194 (1988), the Court held that, " for a misrepresentation or omission to be 'material, ' a substantial likelihood must exist that the true, disclosed fact 'would have been viewed by the reasonable investor as having significantly altered the " total mix" of information made available.'" The Eleventh Circuit previously noted that, " [t]he test for materiality in the securities fraud context is 'whether a reasonable man would attach importance to the fact misrepresented or omitted in determining his course of action.'" S.E.C. v. Merchant Capital, 483 F.3d 747, 766 (11th Cir.2007)(quoting SEC v. Carriba Air, 681 F.2d 1318, 1323 (11th Cir.1982) (citation omitted)). Falsehoods perpetuated through silence are indistinguishable from falsehoods perpetuated through statements when relied on by investors. In either case, the plaintiffs allege the misrepresentations caused them harm.

Having considered the foregoing, and being of the opinion that the plaintiffs' motion to approve the form and manner of class notice (doc. 269) is due to be granted, It is therefore ORDERED by the court that said motion be and hereby is GRANTED to the extent set forth herein. Plaintiffs' shall change the Class Notice to conform to the Class Definition, as set forth above.

In accordance with this Court's Order of December 4, 2014 (doc. 268), it is further ORDERED that the plaintiffs shall withhold the notification of class members until such time as the Eleventh Circuit rules on the defendant's pending Rule 23(f) petition.

DONE and ORDERED.


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