UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

JENNIFER KASILAG, et al.,

Plaintiffs, Civil No. 1:11-cv-01083-RMB-KMW

v.

HARTFORD INVESTMENT 

FINANCIAL SERVICES, LLC,

Defendant.

JENNIFER KASILAG, et al., 

Plaintiffs, Civil No. 1:14-cv-01611-RMB-KMW

v.

HARTFORD FUNDS MANAGEMENT 

COMPANY, LLC,

Defendant.

JENNIFER KASILAG, et al.,

Plaintiffs,

v.

HARTFORD FUNDS MANAGEMENT 

COMPANY, LLC,

Defendant.

Civil No. 1:15-cv-01876-RMB-KMW

DEFENDANTS’ REPLY MEMORANDUM OF LAW IN 

SUPPORT OF THEIR MOTION TO (1) STRIKE PLAINTIFFS’ 

DEMANDS FOR A JURY TRIAL, AND (2) PRECLUDE PLAINTIFFS 

FROM OFFERING EVIDENCE AT TRIAL OF “LOST INVESTMENT 

EARNINGS,” AND MEMORANDUM OF LAW IN OPPOSITION TO 

PLAINTIFFS’ CROSS-MOTION TO EMPANEL AN ADVISORY JURY

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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ...................................................................................III

PRELIMINARY STATEMENT ...............................................................................1

ARGUMENT.............................................................................................................3

I. SECTION 36(B) DOES NOT AFFORD PLAINTIFFS RECOVERY OF 

LOST INVESTMENT EARNINGS. ..............................................................3

A. Section 36(b) Does Not Permit Recovery Of “Lost Investment 

Earnings.” ..............................................................................................3

B. The Law Of The Case Doctrine Bars Plaintiffs’ Request For “Lost 

Investment Earnings.” ...........................................................................8

II. PLAINTIFFS ARE NOT ENTITLED TO A JURY TRIAL ON THEIR 

REQUEST FOR “LOST INVESTMENT EARNINGS.”...............................9

A. Plaintiffs Do Not Dispute That Section 36(b) Actions Are 

Equitable In Nature. ............................................................................10

B. Plaintiffs’ Request For “Lost Investment Earnings” Is A Request 

For Equitable Surcharge......................................................................11

C. Plaintiffs’ Request For “Lost Investment Earnings” Is Inextricably 

Intertwined With The Core Equitable Remedy They Seek. ...............20

III. PLAINTIFFS’ SHOULD BE PRECLUDED FROM SEEKING “LOST 

INVESTMENT EARNINGS.”......................................................................22

A. Plaintiffs Do Not Dispute That They Failed To Disclose 

Computations Of “Lost Investment Earnings.” ..................................22

B. Precluding Plaintiffs From Introducing Evidence Of “Lost 

Investment Earnings” At Trial Is Appropriate....................................23

IV. THE COURT SHOULD NOT EMPANEL AN ADVISORY JURY...........29

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A. Empaneling An Advisory Jury Would Lead To Inefficiency, 

Delay, And A Waste Of Judicial Resources. ......................................31

B. There Is No Special Role For Advisory Juries In Section 36(b) 

Cases, And This Case Does Not Implicate Any Unique Issues 

That Justify Empaneling An Advisory Jury........................................34

CONCLUSION........................................................................................................38

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TABLE OF AUTHORITIES

Page(s)

Cases

Adams v. Cyprus Amax Minerals Co.,

149 F.3d 1156 (10th Cir. 1998) ..........................................................................21

Alexander v. Primerica Holdings, Inc.,

819 F. Supp. 1296 (D.N.J. 1993)........................................................................21

AstraZeneca LP v. Breath Ltd., 

No. 08-1512, 2014 U.S. Dist. LEXIS 136008 (D.N.J. Sept. 26, 

2014) .......................................................................................................23, 24, 27

Baptiste v. Rohn,

No. 13-104, 2016 U.S. Dist. LEXIS 41095 (D.V.I. Mar. 29, 2016) ..................25

Bauer-Ramazani v. Teachers Ins. & Annuity Ass’n of Am.-College 

Ret. & Equities Fund,

No. 09-0190, 2013 U.S. Dist. LEXIS 169261 (D. Vt. Nov. 27, 

2013) ...................................................................................................................17

Beesley v. Int’l Paper Co.,

No. 06-703, 2009 WL 260782 (S.D. Ill. Feb. 4, 2009) ......................................35

Bethea v. Merchants Commercial Bank,

No. 11-51, 2015 WL 1577976 (D.V.I. Apr. 1, 2015).........................................20

Byrd v. Shannon,

715 F.3d 117 (3d Cir. 2013) .................................................................................7

Cent. States, Se. & Sw. Areas Health & Welfare Fund v. Bollinger, 

Inc.,

573 F. App’x 197 (3d Cir. 2014)........................................................................19

Chauffeurs, Teamsters & Helpers, Local 391 v. Terry,

494 U.S. 558 (1990)................................................................................11, 12, 20

CIGNA Corp. v. Amara,

563 U.S. 421 (2011)......................................................................................17, 18

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iv

City of Rome v. Hotels.com, L.P.,

549 F. App’x 896 (11th Cir. 2013).....................................................................26

In re Currency Conversion Fee Antitrust Litig.,

No. 04-5723, 2012 WL 4361443 (S.D.N.Y. Sept. 11, 2012).................30, 31, 32

Curtis v. Loether,

415 U.S. 189 (1974)............................................................................................12

Dayton Valley Inv’rs, LLC v. Union Pac. R.R. Co.,

No. 08-127, 2010 U.S. Dist. LEXIS 108232 (D. Nev. Sept. 24, 

2010) ...................................................................................................................25

Desmond v. Ng,

No. 15-11155, 2015 WL 5886187 (D. Mass. Oct. 8, 2015)...............................19

Dewey Elecs. Corp. v. Montage, Inc.,

117 F.R.D. 73 (M.D. Pa. 1987) ....................................................................32, 33

Doe v. Barrow County,

No. 03-156, 2005 WL 6033020 (N.D. Ga. Mar. 3, 2005)..................................30

EEOC v. HI 40 Corp., Inc.,

No. 93-0230, 1994 WL 421494 (W.D. Mo. Apr. 5, 1994).................................38

Eichorn v. AT&T Corp.,

484 F.3d 644 (3d Cir. 2007) ...............................................................................19

Ellis v. Rycenga Homes, Inc.,

No. 04-0694, 2007 WL 1032367 (W.D. Mich. Apr. 2, 2007)............................17

In re Evangelist,

760 F.2d 27 (1st Cir. 1985)...............................................................................5, 7

F.A.A. v. Cooper,

132 S. Ct. 1441 (2012)......................................................................................6, 7

Fleming v. Peavy-Wilson Lumber Co.,

38 F. Supp. 1001 (W.D. La. 1941) .....................................................................30

Forrest v. Omega Protein, Inc.,

No. 11-92, 2011 WL 4352302 (E.D. Va. Sept. 16, 2011)..................................32

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v

In re Franklin Mut. Funds Fee Litig.,

478 F. Supp. 2d 677 (D.N.J. 2007)...................................................................3, 4

Gabriel v. Alaska Elec. Pension Fund,

773 F.3d 945 (9th Cir. 2014) ..............................................................................15

Gardner v. Calvert,

253 F.2d 395 (3d Cir. 1958) .................................................................................7

In re Gartenberg,

636 F.2d 16 (2d Cir. 1980) ...............................................................................5, 9

Glielmi v. Raymond Corp.,

No. 09-5734, 2013 U.S. Dist. LEXIS 7128 (D.N.J. Jan. 17, 2013) ............passim

In re Globe Parcel Serv., Inc.,

75 B.R. 381 (E.D. Pa. 1987)...............................................................................20

Golden v. Kelsey-Hayes Co.,

73 F.3d 648 (6th Cir. 1996) ................................................................................21

Great-West Life & Annuity Ins. Co. v. Knudson,

534 U.S. 204 (2002).....................................................................................passim

Green v. Fund Asset Mgmt., L.P.

286 F.3d 682 (3rd. Cir 2002)............................................................................3, 4

Hatco Corp. v. W.R. Grace & Co.,

59 F.3d 400 (3d Cir. 1995) .................................................................................10

Healthcare Strategies, Inc. v. ING Life Ins. & Annuity Co.,

No. 11-282, 2012 WL 162361 (D. Conn. Jan. 19, 2012)...................................20

Hecht Co. v. Bowles,

321 U.S. 321 (1944)............................................................................................14

Hellman v. Cataldo,

No. 12-02177, 2013 WL 4482889 (E.D. Mo. Aug. 20, 2013)...........................20

In re Iron Workers Local 25 Pension Fund,

Nos. 04-40243, 07-12368, 2011 U.S. Dist. LEXIS 34505 (E.D. 

Mich. Mar. 31, 2011)....................................................................................12, 17

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vi

Jones v. Harris Assocs. L.P.,

559 U.S. 335 (2010)..............................................................................1, 2, 34, 35

Kalish v. Franklin Advisers, Inc.,

928 F.2d 590 (2d Cir. 1991) .................................................................................5

Kalish v. Franklin Advisers, Inc.,

No. 87-6919, 1988 U.S. Dist. LEXIS (S.D.N.Y. Feb. 29, 1988), 

aff’d, 928 F.2d 590 (2d Cir. 1991)........................................................................5

Kasilag v. Hartford Inv. Fin. Servs.,

Civ. Nos. 11-1083, 14-1611, 2016 U.S. Dist. LEXIS 47063 (D.N.J. 

Mar. 24, 2016).................................................................................................8, 31

Kodak Graphic Commc’ns Can. Co. v. E.I. Du Pont de Nemours & 

Co.,

No. 08-6553, 2013 U.S. Dist. LEXIS 151922 (W.D.N.Y. Oct. 22, 

2013) .............................................................................................................25, 28

Kramer v. Banc of Am. Sec., LLC,

355 F.3d 961 (7th Cir.), cert. denied, 542 U.S. 932 (2004) ...............................37

Maharaj v. Cal. Bank & Tr.,

288 F.R.D. 458 (E.D. Cal. 2013)........................................................................26

Mercedes Benz USA LLC v. Coast Auto. Grp. Ltd.,

No. 99-3121, 2008 U.S. Dist. LEXIS 72172 (D.N.J. Sept. 23, 

2008) ...................................................................................................................28

Midwest Elec. Coop. Corp. v. Tri-State Generation & Transmission 

Ass’n, Inc.,

No. 10-2349, 2014 U.S. Dist. LEXIS 58574 (D. Colo. Apr. 28, 

2014) ...................................................................................................................26

MKB Constructors v. Am. Zurich Ins. Co.,

No. 13-611, 2014 U.S. Dist. LEXIS 137495 (W.D. Wash. Sept. 29, 

2014) ...................................................................................................................25

Morrissey v. Curran,

650 F.2d 1267 (2d Cir. 1981) .............................................................................15

Moss v. Lane Co., Inc.,

471 F.2d 853 (4th Cir. 1973) ..............................................................................29

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vii

NAACP v. Acusport Corp.,

226 F. Supp. 2d 391 (E.D.N.Y. 2002)..........................................................36, 37

Nicholas v. Pa. State Univ.,

227 F.3d 133 (3d Cir. 2000) .........................................................................23, 28

Norfolk S. Ry. Co. v. Pittsburgh & W. Va. R.R.,

No. 11-1588, 2015 U.S. Dist. LEXIS 92159 (W.D. Pa. July 15, 

2015) ...................................................................................................................26

Ollier v. Sweetwater Union High Sch. Dist.,

267 F.R.D. 338 (S.D. Cal. 2010) ..................................................................30, 38

In re Pan Am Corp.,

No. 93-7125, 1994 WL 174318 (S.D.N.Y. May 3, 1994)..................................33

Parsons v. Bd. of Trs. of Nev. Resort Ass’n – I.A.T.S.E. Local 702 Ret. 

Plan,

No. 12-00299, 2013 WL 5324946 (D. Nev. Sept. 20, 2013) .......................19, 36

Pereira v. Farace,

413 F.3d 330 (2d Cir. 2005) ...............................................................................18

RDK Truck Sales & Serv. Inc. v. Mack Trucks, Inc.,

No. 04-4007, 2009 WL 1441578 (May 19, 2009)................................................7

Reich v. King,

861 F. Supp. 379 (D. Md. 1994).........................................................................29

Rosen v. Dick,

83 F.R.D. 540 (S.D.N.Y. 1979)..........................................................................33

Schuster v. Shepard Chevrolet, Inc.,

No. 99-8326, 2002 WL 507130 (N.D. Ill. Apr. 3, 2002) ...................................37

Sergent v. McKinstry,

472 B.R. 387 (E.D. Ky. 2012)............................................................................19

Silver State Broad., LLC v. Beasley FM Acquisition,

No. 11-1789, 2016 U.S. Dist. LEXIS 8904 (D. Nev. Jan. 25, 2016)...........24, 25

Sivolella v. AXA Equitable Funds Mgmt., LLC, 

No. 11-4194, 2013 U.S. Dist. LEXIS 115622 (D.N.J. July 3, 2013).............1, 18

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Skoldberg v. Villani,

601 F. Supp. 981 (S.D.N.Y. 1985) ...............................................................32, 33

Soley v. Wasserman,

08-9262, 2013 WL 1655989 (S.D.N.Y. Apr. 17, 2013).....................................19

Stoneback v. ArtsQuest,

No. 12-3286, 2012 WL 4963624 (E.D. Pa. Oct. 17, 2012)................................19

Termini v. Life Ins. Co. of N. Am.,

474 F. Supp. 2d 775 (E.D. Va. 2007).................................................................13

Tull v. United States,

481 U.S. 412 (1987)......................................................................................20, 22

United Power Ass’n v. Fed. Emergency Mgmt. Agency,

No. 99-180, 2001 WL 1789404 (D.N.D. Aug. 14, 2001)...................................38

Van Asdale v. Int’l Game Tech.,

No. 04-703, 2010 WL 1490349 (D. Nev. Apr. 13, 2010) ..................................32

In re Visteon Corp.,

612 F.3d 210 (3d Cir. 2010) .................................................................................7

White v. Smiths Detection, Inc.,

No. 10-4078, 2013 WL 1845072 (D.N.J. Apr. 30, 2013) ................................8, 9

Young v. Pleasant Valley Sch. Dist.,

No. 07-854, 2011 U.S. Dist. LEXIS 42353 (M.D. Pa. Apr. 19, 

2011) .............................................................................................................24, 26

In re YRC Worldwide, Inc. ERISA Litig.,

No. 09-2593, 2010 U.S. Dist. LEXIS 125654 (D. Kan. Nov. 29, 

2010) .................................................................................................16, 17, 20, 21

Statutes

15 U.S.C. § 80a-35(b).......................................................................................passim

Rules

Fed. R. Civ. P. 26(a).................................................................................2, 22, 27, 28

Fed. R. Civ. P. 37(c).................................................................................................23

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Fed. R. Civ. P. 39(c).............................................................................................2, 29

Other Authorities

1 Austin Wakeman Scott et al., Scott and Ascher on Trusts (5th ed. 

2015) .............................................................................................................13, 14

George G. Bogert & George T. Bogert, The Law of Trusts & Trustees

(Sept. 2015).........................................................................................................13

8 J.W. Moore et al., Moore’s Federal Practice (3d ed. 2004) ................................30

John H. Langbein, What ERISA Means by “Equitable”: The Supreme 

Court’s Trail of Error in Russell, Mertens and Great-West, 103 

Colum. L. Rev. 1317 (2003)...............................................................................15

Restatement (2d) of Trusts (1959).....................................................................13, 14

Restatement (3d) of Trusts (2012)...........................................................................15

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PRELIMINARY STATEMENT

Plaintiffs do not dispute that no court in the forty-six year history of Section 

36(b) has ever held that a party is entitled to a jury trial in an action seeking 

recovery under Section 36(b). No fewer than eighteen decisions have found that 

Section 36(b) does not afford a right to a jury trial and, consistent with this 

established precedent, all eight Section 36(b) actions that have been tried—

including most recently the AXA litigation tried in the District of New Jersey 

earlier this year—have been tried before courts. Indeed, the Supreme Court’s 

seminal decision in Jones v. Harris Associates L.P. consistently speaks of courts, 

not juries, assessing whether a fee violates Section 36(b). 559 U.S. 335, 349-52 

(2010); see Defs.’ Br. at 10.1

 

In response to Defendants’ motion, Plaintiffs attempt to sweep away this 

extensive precedent on the grounds that, after the decision in AXA striking the 

plaintiffs’ jury demands in that case, they amended their complaint in this action to 

seek an unprecedented form of relief never before seen in Section 36(b) actions—

“lost investment earnings” to the Funds on the amount of any fees deemed 

excessive. But “lost investment earnings” is not a cognizable form of relief under 

Section 36(b), whose statutory text and legislative history demonstrate an intent to 

 1 Capitalized terms not defined herein have the meanings ascribed in Defendants’ 

opening brief.

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try breach of fiduciary duty claims before courts, not juries. Even if it were 

cognizable, such relief would fall distinctly within the realm of equitable relief for 

which there is no right to a jury trial. None of Plaintiffs’ authorities, which do not 

involve Section 36(b) or the Investment Company Act of 1940, compels a different 

conclusion. 

Finally, even if Plaintiffs could overcome all of these hurdles, they have no 

legitimate answer to their failure to meet their obligation under Rule 26 to disclose 

a computation of alleged lost investment earnings during fact discovery or 

otherwise raise the topic in expert discovery. Accordingly, they should be 

precluded from offering evidence on the subject at trial.

Plaintiffs’ cross-motion for an advisory jury should also be denied. Far from 

making trial of this case more efficient, an advisory jury would undermine the 

purpose of Rule 39(c)(1) of the Federal Rules of Civil Procedure by imposing 

significant and unnecessary burdens and delay on both the Court and the parties. 

Nor does Plaintiffs’ Section 36(b) claim entail the application of community-based 

standards. To the contrary, Plaintiffs’ claim is governed by specific analytical 

factors that have been defined by the Supreme Court in Jones and in numerous 

appellate and district courts in more than forty years of litigation under Section 

36(b). In short, an advisory jury would have no proper role in this case, and 

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empaneling an advisory jury would only serve to heighten the complexity and 

burden of this trial.

ARGUMENT

I. SECTION 36(B) DOES NOT AFFORD PLAINTIFFS RECOVERY OF 

LOST INVESTMENT EARNINGS.

Plaintiffs’ assertion that “lost investment earnings” is a remedy available 

under Section 36(b), which no court has ever held, contradicts the statutory text of 

Section 36(b), congressional intent, and case law interpreting the statute. As the 

statute and cases construing it show, Section 36(b) provides a limited remedy—

repayment of the allegedly excessive portion of the fee.

A. Section 36(b) Does Not Permit Recovery Of “Lost Investment 

Earnings.”

Section 36(b) is a limited statute and its text, legislative history, and 

longstanding case law affirm that it was intended to provide a narrow and specific 

federal remedy. As the Third Circuit held in Green v. Fund Asset Management, 

L.P., Section 36(b) was “intended to provide a very specific, narrow federal 

remedy” that is “significantly more circumscribed than common law fiduciary duty 

doctrines.” 286 F.3d 682, 685 (3d Cir. 2002); see also In re Franklin Mut. Funds 

Fee Litig., 478 F. Supp. 2d 677, 683 (D.N.J. 2007) (the fiduciary duty imposed by 

Section 36(b) is “significantly narrower than the fiduciary relationship recognized 

by common law”). Among other things, a shareholder may sue only the recipient 

of the fees (unlike the common law rule permitting shareholders to sue fund 

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directors) and the plaintiff bears the burden of proving a breach of fiduciary duty 

(in contrast to the common law rule that requires a fiduciary to justify its conduct). 

Green, 286 F.3d at 685. The legislative history of Section 36(b) confirms that the 

statute’s narrow scope was intended to “curb the potential for increased costs of 

litigation and the abusive use of lawsuits.” In re Franklin, 478 F. Supp. 2d at 686;

see also id. at 687 (noting Congress’ intent to “prevent the harassment of 

investment advisers by ill-founded or nuisance law suits, the so-called strike suit.”) 

(internal quotation marks omitted). 

Among other limitations, Section 36(b)(3) sets forth explicit constraints on 

allowable recovery under the statute,stating that “[n]o award of damages shall be 

recoverable for any period prior to one year before the action was instituted” and 

that any award of relief “shall in no event exceed the amount of compensation or 

payment received from such investment company.” 15 U.S.C. § 80a-35(b)(3) 

(emphasis added). In construing Section 36(b)(3), Plaintiffs attempt to read 

expansive language into the statute that does not exist, contending that “lost 

investment earnings” are a proper form of relief so long as the “total amount of 

damages does not exceed the total amount of advisory fees paid to Defendants 

annually.” See Pls.’ Br. at 2 (emphasis added). But nowhere does Section 

36(b)(3) contain these additional words. On its face, the statute evidences an intent 

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to cabin relief for an alleged breach of fiduciary duty to the compensation or fees 

paid to the investment adviser. 

In light of the limiting language in Section 36(b)(3) and against the backdrop 

of Section 36(b)’s legislative history, courts have narrowly interpreted Section 

36(b) as providing only for recovery of the allegedly excessive portion of a 

manager’s fees. See In re Evangelist, 760 F.2d 27, 29-30 (1st Cir. 1985) (“the 

remedy Congress created [is] the payment of any excess fee to the company” and 

“legislative history makes clear [that] the limitation [of recovery] prevents . . . 

special damages that the excess payments may have caused”) (emphasis added);

Kalish v. Franklin Advisers, Inc., 928 F.2d 590, 592 (2d Cir. 1991) (“The central 

issue in this action is whether the fund adviser . . . exacted an exorbitant fee. Any 

unreasonable portion of the fee must be returned to the fund.”); see also Defs.’ Br. 

at 18-19 (citing various Section 36(b) cases that characterize relief as restitution of 

allegedly excessive management compensation).2

 2 Plaintiffs rely heavily on the fact that the court in In re Gartenberg, 636 F.2d 16,

18 (2d Cir. 1980), stated that it was “leaving for another day a determination of 

whether a plaintiff making a bona fide claim for damages” is entitled to a jury trial. 

But the court’s expression that its decision was limited to the facts of that case is 

hardly a determination that any such bona fide claims exist, nor did the court 

attempt to define the term. See also Kalish v. Franklin Advisers, Inc., No. 87-

6919, 1988 U.S. Dist. LEXIS, at *3 (S.D.N.Y. Feb. 29, 1988) (implicitly 

questioning “bona fide claim for damages” concept), aff’d, 928 F.2d 590 (2d Cir. 

1991).

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Confronted with Section 36(b)’s limited scope and existing case law, 

Plaintiffs urge the Court to adopt a particular meaning of “actual damages” that 

would encompass lost investment earnings by relying on constructions of that 

phrase in entirely different statutory contexts. Pls.’ Br. at 5. But the Supreme 

Court has unequivocally rejected the argument that the term “actual damages” has 

a particularized meaning independent of the statutory context in which it is used. 

In F.A.A. v. Cooper, the Supreme Court considered precisely the question of 

whether the term “actual damages” has a specific meaning. 132 S. Ct. 1441, 1449 

(2012). The Supreme Court—acknowledging the same principle of statutory 

construction that Plaintiffs seek to apply here whereby a term of art presumably 

adopts the “cluster of ideas” attached to it—rejected its application, stating, “[e]ven 

as a legal term, however, the meaning of ‘actual damages’ is far from clear.” Id. 

(emphasis added) The Supreme Court observed that the meaning of the term found 

in Black’s Law Dictionary was “of little value” and declared that “the precise 

meaning of [actual damages] changes with the specific statute in which it is 

found.” Id. (citation and internal quotation marks omitted). The Court in Cooper

continued on to explore the various contexts in which the term “actual damages” 

has been employed, and delineated its different meanings. Id. at 1449-50. 

Summarizing its point, the Court affirmed that “[b]ecause the term ‘actual 

damages’ has this chameleon-like quality, we cannot rely on any all-purpose 

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definition but must consider the particular context in which [it] appears.” Id. at 

1450 (emphasis added); cf. Byrd v. Shannon, 715 F.3d 117, 123 (3d Cir. 2013) (“In 

determining whether the language of a particular statutory provision has a plain 

meaning, we consider the language in the context of the entire statute.”). 

Ignoring Cooper, Plaintiffs invoke various cases that have nothing to do 

with Section 36(b) to assert that “actual damages” should incorporate lost 

investment earnings.3

 But in light of the Supreme Court’s admonishment that a 

particular meaning of “actual damages” does not exist, no basis exists to apply 

Plaintiffs’ asserted meaning here. As the court in In re Evangelist noted and as the 

text and history of Section 36(b) confirm, the “remedy Congress created” is limited 

to “the payment of any excess fee to the company.” 760 F.2d at 29; see In re 

Visteon Corp., 612 F.3d 210, 221 (3d Cir. 2010) (“The words of a statute are not to 

be lightly jettisoned by courts looking to impose their own logic on a statutory 

scheme.”). Section 36(b)(3) “prevents . . . special damages that the excess 

payments may have caused.” In re Evangelist, 760 F.2d at 30. 

 3 Plaintiffs’ case law ranges from breach of an oral agreement in an admiralty suit 

to the scope of damages under the Unfair Practices Act. See generally Gardner v. 

Calvert, 253 F.2d 395 (3d Cir. 1958); RDK Truck Sales & Serv. Inc. v. Mack 

Trucks, Inc., No. 04-4007, 2009 WL 1441578 (May 19, 2009). 

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8

B. The Law Of The Case Doctrine Bars Plaintiffs’ Request For “Lost 

Investment Earnings.” 

Plaintiffs’ argument that they are entitled to lost profits in the form of lost 

investment earnings is further precluded by the law of the case doctrine. In the 

Court’s recent summary judgment opinion, in deciding Plaintiffs’ cross-motion for 

partial summary judgment regarding damages, the Court confronted the question of 

what damages are available under Section 36(b) and determined that the “proper 

measure of damages ‘shall be limited to the actual damages resulting from the 

breach of fiduciary duty’ . . . . In this case, the actual damages would be the 

difference between the fee paid and a fee that would have been ‘fair’ – i.e., a fee 

that could have been negotiated at arm’s length.” Kasilag v. Hartford Inv. Fin. 

Servs., Civ. Nos. 11-1083, 14-1611 (RMB/KMW), 2016 U.S. Dist. LEXIS 47063, 

at *61-62 (D.N.J. Mar. 24, 2016) (emphasis added) (citing In re Evangelist, 760 

F.2d at 29).

The law of the case doctrine “limits relitigation of an issue once it has been 

decided in the same litigation” and, for finality purposes, “posits that when a court 

decides upon a rule of law, that decision should continue to govern the same issues 

in subsequent stages in the same case.” White v. Smiths Detection, Inc., No. 10-

4078, 2013 WL 1845072, at *18 (D.N.J. Apr. 30, 2013) (citation and internal 

quotation marks omitted). Reconsideration of an issue is barred by the doctrine 

unless “extraordinary circumstances” exist, including “where (1) new evidence is 

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available; (2) a supervening new law has been announced; or (3) the earlier 

decision was clearly erroneous and would create manifest injustice.” Id. at *19 

(citation and internal quotation marks omitted). 

No such extraordinary circumstances exist here: there is no new evidence, 

no new law, and this Court’s decision—in line with years of 36(b) case law 

construing damages for breach of fiduciary duty as the amount of the allegedly 

excessive fee—is not clearly erroneous or manifestly unjust. The law of the case 

doctrine forecloses Plaintiffs’ attempt to relitigate this issue. 

II. PLAINTIFFS ARE NOT ENTITLED TO A JURY TRIAL ON THEIR 

REQUEST FOR “LOST INVESTMENT EARNINGS.”

Even if Section 36(b) permitted Plaintiffs to recover “lost investment 

earnings,” which it does not, Plaintiffs would not be entitled to a jury trial by virtue 

of requesting such relief. Plaintiffs suggest in a single line of their brief, 

unsupported by explanation or citation, that “the construction” of Section 36(b) is 

“silent regarding the right to a jury trial.” Pls.’ Br. at 7. In doing so, Plaintiffs 

leave many of Defendants’ arguments unaddressed, tacitly conceding them. 4 

Plaintiffs do not address the fact that the only references in Section 36(b) to who 

decides a claim under that section speak of courts, not juries, performing the 

 4 Although the court in In re Gartenberg, 636 F.2d at 17, which Plaintiffs did not 

invoke in this portion of their brief, remarked that the statute is “silent” on the 

“jury-non-jury issue” in the course of finding that no right to a jury trial existed in 

that case, there is no indication from the court’s brief discussion of the issue that it 

considered the same arguments raised by Defendants. 

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Section 36(b) analysis. Defs.’ Br. at 11. Likewise, they do not respond to any of 

the legislative history cited by Defendants demonstrating Congress’s intent to 

create an equitable cause of action and equitable remedy. Defs.’ Br. at 13-15. For 

the reasons stated in Defendants’ opening brief, Section 36(b)’s text and legislative 

history demonstrate an intent to try Section 36(b) claims before courts, not juries. 

Plaintiffs instead turn to a secondary question that they can only reach if the 

statutory text or Congress’s intent is unclear: whether the Seventh Amendment 

protects a right to a jury trial on their requested remedies. See Defs.’ Br. at 10. 

But even if Section 36(b) or its legislative history were ambiguous on the jury trial 

question, there is no constitutional right to a jury trial to be found here. The 

Seventh Amendment right to a jury trial arises only for claims and remedies 

concerning legal rights, not equitable ones. The breach of fiduciary duty claim that 

Plaintiffs bring here and the remedies they seek, including their request for “lost 

investment earnings,” are distinctly equitable. 

A. Plaintiffs Do Not Dispute That Section 36(b) Actions Are 

Equitable In Nature.

As noted in Defendants’ opening brief, where a statute’s text is ambiguous 

on the right to a trial by jury, the Seventh Amendment protects the right to a jury 

trial only in legal—not equitable—actions. Hatco Corp. v. W.R. Grace & Co., 59 

F.3d 400, 411 (3d Cir. 1995). Under the Seventh Amendment, a court must engage 

in two-step analysis to ascertain whether the claims and remedies involve legal 

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rights or only equitable rights. See Defs.’ Br. at 16; Pls.’ Br. at 8. First, the court 

must evaluate the nature of the claim in comparison to 18th-century actions 

brought in the courts of England prior to the merger of law and equity. Chauffeurs, 

Teamsters & Helpers, Local 391 v. Terry, 494 U.S. 558, 565 (1990). Next, it must 

determine whether the remedy sought is legal or equitable. Id. Under both the first 

and second inquiries, Plaintiffs’ request for alleged “lost investment earnings” falls 

distinctly within the realm of equity. 

Significantly, with respect to the first step, the nature of the action, Plaintiffs 

do not dispute that claims for breaches of fiduciary duty are equitable in nature, nor 

could they, given that breach of fiduciary duty claims have been regarded as 

equitable claims for centuries. Pls.’ Br. at 12-13. Indeed, conceding the equitable 

nature of Section 36(b), Plaintiffs withdrew their jury demand on their Section 

36(b) claim to the extent they seek the return of the allegedly excessive fees. Pls.’ 

Br. at 1; Defs.’ Br. at 19. Put simply, Plaintiffs admit they do not meet the first 

prong of the Seventh Amendment test. 

B. Plaintiffs’ Request For “Lost Investment Earnings” Is A Request 

For Equitable Surcharge.

With respect to the second prong of the Seventh Amendment test, Plaintiffs 

do not dispute that the core relief they seek—the return to the Funds of the 

allegedly excessive fees—is equitable. Instead, they claim that their ancillary 

request for “lost investment earnings” associated with those fees is a legal remedy. 

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It is not. Despite Plaintiffs’ efforts to call it something else, Plaintiffs’ request for 

“lost investment earnings” is nothing other than a request for the longstanding 

equitable remedy of surcharge against a fiduciary—a type of relief available only

in courts of equity. 

Plaintiffs argue that they do not “make a claim for surcharge” in their 

complaint (Pls.’ Br. at 13), but merely changing the name of the remedy in a 

complaint or brief does not transform equitable relief into legal relief. In re Iron 

Workers Local 25 Pension Fund, Nos. 04-40243, 07-12368, 2011 U.S. Dist. 

LEXIS 34505, at *45-46 (E.D. Mich. Mar. 31, 2011) (“Plaintiffs’ request for relief 

is not legal simply because they label the request as one for money damages. . . .”). 

Moreover, the determination as to whether relief is equitable or legal does not 

hinge on whether the relief requested is characterized as monetary damages; rather, 

it hinges on the nature of the remedy itself. Curtis v. Loether, 415 U.S. 189, 196 

(1974); Chauffeurs, 494 U.S. at 571; In re Iron Workers Local 25 Pension Fund, 

2011 U.S. Dist. LEXIS 34505, at *46-48, *53. 

In maintaining that their request for “lost investment earnings” is not a 

request for equitable surcharge, Plaintiffs largely ignore the fact that their claim 

under Section 36(b) is an equitable claim for breach of fiduciary duty—a fact 

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Plaintiffs themselves concede. As the Restatement of Trusts5 emphasizes, the 

“remedies of the beneficiary against the trustee are exclusively equitable.” 

Restatement (2d) of Trusts § 197 (1959), at 433 (emphasis added). During the 

days of the divided bench, beneficiaries could not obtain relief against fiduciaries 

in a court of law. 1 Austin Wakeman Scott et al., Scott and Ascher on Trusts

§§ 1.1, 24.1 (5th ed. 2015).6

 Rather, they could only seek relief in a court of 

equity. Scott & Ascher, supra, §§ 1.1, 24.1. Courts of equity, unlike courts of law, 

could compel fiduciaries to act in accordance with their fiduciary duties and had 

the power to fashion whatever remedy was necessary under the circumstances to 

best protect the beneficiary—including compensating the beneficiary for losses

when the trustee’s action caused the beneficiary to suffer harm—without regard to 

the rigid, technical constraints that governed the ability of courts of law to fashion 

legal relief. Scott & Ascher, supra, §§ 24.1, 24.3; George G. Bogert & George T. 

Bogert, The Law of Trusts & Trustees § 861 (Sept. 2015) (“Equity . . . will provide 

the beneficiary with whatever remedy is necessary to protect him and recompense 

 5 Although, as noted above, Section 36(b) is significantly more circumscribed than 

common-law breach of fiduciary duty, the Restatement of Trusts is apt to the 

analysis of the nature of Plaintiffs’ requested remedy for “lost investment 

earnings,” given that claims for breach of fiduciary duty were historically 

“examined under trust law principles.” Termini v. Life Ins. Co. of N. Am., 474 F. 

Supp. 2d 775, 778 (E.D. Va. 2007). 

6 The relevant portions of the Scott & Ascher treatise cited herein, which do not 

appear to be available on LEXIS or Westlaw, are attached as Exhibit 1 to the 

Declaration of Robert C. Hora, dated June 24, 2016 (“Hora Decl.”). 

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him for loss . . . .”) (emphasis added); Hecht Co. v. Bowles, 321 U.S. 321, 329 

(1944).

Thus, in actions where a beneficiary sues a fiduciary for its breach of duty, 

the fiduciary could be required to restore the beneficiary to the “position in which 

he would have been if the trustee had not committed the breach of trust.” 

Restatement (2d) of Trusts, supra, § 205 cmt. a, at 458; see also id. § 205, at 458; 

Scott & Ascher, supra, § 24.3.3 (“If the trustee has committed a breach of trust, the 

beneficiaries can maintain a suit in equity to compel the trustee to redress the 

breach of trust by making specific reparation, paying money, or otherwise”); id. at 

§ 24.3 (listing money payment designed to redress fiduciary breach as one of the 

“equitable remedies” available to a beneficiary). Indeed, in many cases described 

by the comments, the Restatement makes clear that the fiduciary could be liable for 

monetary payment as part of putting the plaintiff back in the position he would 

have been in without the breach. See, e.g., Restatement (2d) of Trusts, supra, § 

205 illus. 1, at 459 (“A is trustee of $10,000 in cash. As a result of his negligence 

the money is stolen. A is liable for $10,000.”).

As noted in Defendants’ opening brief, the recovery of losses from a 

breaching fiduciary was and is an express type of equitable relief known as 

surcharge, which seeks to put the beneficiary back in the position he or she would 

have been if the fiduciary breach had not occurred. Restatement (2d) of Trusts, 

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supra, § 205(a); Restatement (3d) of Trusts § 95 cmt. b (2012); Morrissey v. 

Curran, 650 F.2d 1267, 1282 (2d Cir. 1981) (“At common law, an accounting 

surcharging a trustee for breach of his fiduciary duty was a readily available 

remedy.”); see also Gabriel v. Alaska Elec. Pension Fund, 773 F.3d 945, 962-63 

(9th Cir. 2014) (in ERISA action, finding equitable surcharge remedy available for 

losses resulting from breach of fiduciary duty); see also Defs.’ Br. at 21-22. 

Although surcharge is akin to the legal remedy of damages in that it can include 

monetary relief for losses suffered by the plaintiff (rather than the restitution of 

improper gains by the defendant), it was clearly equitable: it was regularly and 

exclusively granted in courts of equity.7

 

In arguing that their request for “lost investment earnings” seeks legal rather 

than equitable relief, Plaintiffs primarily rely on Great-West Life & Annuity 

Insurance Co. v. Knudson, 534 U.S. 204 (2002). Pls.’ Br. at 8-9. But nothing in 

Great-West undermines the conclusion that Plaintiffs’ request for “lost investment 

earnings” is anything other than a request for equitable surcharge. Great-West 

involved a provision in an ERISA plan that required beneficiaries to reimburse the 

plan for monies advanced for medical expenses if they later recovered money from 

 7 See Restatement (3d) Trusts § 95, Reporter’s Notes on cmts. a-c (noting that 

equity may grant money damages); John H. Langbein, What ERISA Means by 

“Equitable”: The Supreme Court’s Trail of Error in Russell, Mertens and GreatWest, 103 Colum. L. Rev. 1317, 1353 (2003) (“it may once have been technically 

correct to say that damages were exclusively a common law remedy, but only 

because damages in equity were called surcharge”).

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a third party. Id. at 207. In that case, the defendant Knudson, a plan beneficiary, 

was injured in a car accident, and plaintiff Great-West covered her medical 

expenses on behalf of her husband’s plan. Id. at 207-08. Knudson filed a tort suit 

against a third party, and recovered money in a settlement agreement. Id. GreatWest then filed a claim under Section 502(a)(3) of ERISA, which only allows for 

equitable relief, seeking to compel Knudson to reimburse the plan by paying a 

portion of her settlement. Id. at 208. The Court explained that “the imposition of 

personal liability on respondents for a contractual obligation to pay money,” id. at 

221, was relief that was typically “not available in equity,” id. at 211. Since 

Section 502(a)(3) of ERISA permits only equitable relief, id. at 209-10, the court 

found Great-West’s action was not authorized by that section, id. at 221.

Great-West hardly governs here: It did not involve the right to a jury trial 

under the Seventh Amendment; did not involve a claim under Section 36(b) of the 

Investment Company Act; and did not involve a claim against a fiduciary or a 

claim premised on a breach of fiduciary duty. Rather, “in Great-West, the 

Supreme Court was considering a claim more akin to a breach of contract action, 

arising from a contractual duty instead of a fiduciary duty, and the Court quite 

unremarkably determined that such a claim was a legal claim, distinguished from 

equitable claims that ordinarily involved imposition of constructive trusts.” In re 

YRC Worldwide, Inc. ERISA Litig., No. 09-2593, 2010 U.S. Dist. LEXIS 125654, 

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at *13-14 (D. Kan. Nov. 29, 2010). Plaintiffs are not bringing any contractual 

claims here, but instead are expressly suing for breach of fiduciary duty under 

Section 36(b), a claim they concede is equitable in nature. 

Since Great-West was decided, numerous courts have refused to accept 

arguments by plaintiffs bringing breach of fiduciary duty claims that Great-West 

somehow means that “a surcharge action against a fiduciary seeking payment to 

the trust estate arising from the fiduciary’s breach of duty is a ‘suit at common law’ 

within the meaning of the Seventh Amendment, even though no common-law 

court in the colonial Anglo-American legal system would ever have entertained 

such a suit or granted such relief.” Ellis v. Rycenga Homes, Inc., No. 04-0694, 

2007 WL 1032367, at *4 (W.D. Mich. Apr. 2, 2007); In re YRC Worldwide, 2010 

U.S. Dist. LEXIS 125654, at *13-14 (distinguishing Great-West). Similarly, 

numerous courts have stricken jury demands in breach of fiduciary duty cases in 

which plaintiffs relied on Great-West, finding such reliance misplaced.8

 

In Amara, decided nine years after Great-West, the Supreme Court noted in 

the context of interpreting Section 502(a)(3) of ERISA, the same section of ERISA 

 8 See, e.g., Bauer-Ramazani v. Teachers Ins. & Annuity Ass’n of Am.-College Ret. 

& Equities Fund, No. 09-0190, 2013 U.S. Dist. LEXIS 169261, at *35 (D. Vt. 

Nov. 27, 2013) (finding Great-West distinguishable in ERISA breach of fiduciary 

duty claim); In re Iron Workers Local 25 Pension Fund, 2011 U.S. Dist. LEXIS 

34505, at *47-48 (declining to apply Great-West to ERISA breach of fiduciary 

duty claim, and collecting cases holding the same); In re YRC Worldwide, Inc., 

2010 U.S. Dist. LEXIS 125654, at *13-14 (distinguishing fiduciary duties at issue 

in ERISA action from contractual duties at issue in Great-West).

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at issue in Great-West, that the fact that “relief takes the form of a money payment 

does not remove it from the category of traditionally equitable relief”; recognized 

that “[e]quity courts possessed the power to provide relief in the form of monetary 

‘compensation’ for a loss resulting from a trustee’s breach of duty”; and noted that 

“prior to the merger of law and equity this kind of monetary remedy against [a 

fiduciary], sometimes called a ‘surcharge,’ was ‘exclusively equitable.’” CIGNA 

Corp. v. Amara, 563 U.S. 421, 441-42 (2011) (citation omitted). Plaintiffs 

characterize these statements as dicta because the Supreme Court grounded its 

decision on the technical pension plan question presented in that case on another 

section of the ERISA statute (Section 502(a)(1)(B)), but nowhere do they dispute 

these longstanding principles regarding equitable relief, nor could they—as noted 

above, these principles have been settled for hundreds of years.9 Nor do the other 

cases that Plaintiffs invoke in their discussion of Amara, none of which involves 

 9 Plaintiffs’ reliance on Pereira v. Farace, 413 F.3d 330 (2d Cir. 2005), an out-ofcircuit case that does not involve Section 36(b) and pre-dates Amara, does not shift 

the Seventh Amendment analysis in their favor. Citing to Pereira, Plaintiffs claim 

that their request for “lost investment earnings” qualifies as legal relief. Pls.’ Br. at 

9. In Pereira, the court considered whether damages that plaintiffs sought from a 

fiduciary, stemming from payment of dividends at the time of insolvency in 

violation of Delaware Corporate Law, qualified as legal or equitable relief. 

Pereira, 413 F.3d at 335-36. Although the court in Pereira described such relief as 

legal relief, it did not address the equitable remedy of surcharge. Moreover, the 

Court in AXA considered and rejected arguments that the holdings in Great-West

and Pereira establish that Section 36(b) provides a legal remedy. Sivolella v. AXA 

Equitable Funds Mgmt., LLC, No. 11-4194, 2013 U.S. Dist. LEXIS 115622, at 

*15-17 (D.N.J. July 3, 2013). The AXA Court found no such support. Id.

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Section 36(b), indicate that surcharge is not an equitable remedy, or establish that it 

is not what Plaintiffs are seeking here.10 

In arguing that they are seeking legal relief, Plaintiffs also rely on a series of 

quotes excerpted from a variety of cases that either do not involve breach of 

fiduciary duty claims, or rely on misapplications of Great-West. Pls.’ Br. at 10-12; 

see, e.g., Stoneback v. ArtsQuest, No. 12-3286, 2012 WL 4963624, at *9-10 (E.D. 

Pa. Oct. 17, 2012) (in whistleblower action, finding that underlying claims and 

relief sounded in tort for wrongful discharge); Desmond v. Ng, No. 15-11155, 2015 

WL 5886187, at *6 (D. Mass. Oct. 8, 2015) (in bankruptcy adversary proceeding, 

awarding jury trial only for breach of contract and other legal claims).11 Nothing in 

 10 See Parsons v. Bd. of Trs. of Nev. Resort Ass’n – I.A.T.S.E. Local 702 Ret. Plan, 

No. 12-00299, 2013 WL 5324946, at *10 (D. Nev. Sept. 20, 2013) (in motion to 

dismiss plaintiffs’ action for unearned wages, dismissing action where plaintiff 

failed to adequately plead breach of fiduciary duty) (cited in Pls.’ Br. at 14); see 

also Sergent v. McKinstry, 472 B.R. 387, 407-08 (E.D. Ky. 2012) (in premature 

bankruptcy adversary proceeding on claims for gross negligence and breach of 

fiduciary duty where no equitable remedy was sought and duties arose from 

employment rather than fiduciary relationship, finding jury trial available for 

determination of legal restitution) (cited in Pls.’ Br. at 14).

11 Plaintiffs’ other citations are unavailing for the same reasons. See, e.g., Eichorn 

v. AT&T Corp., 484 F.3d 644, 657-58 (3d Cir. 2007) (in ERISA action, affirming 

grant of summary judgment against former employees who sought back pay for 

unearned benefits they were barred from receiving by an agreement between their 

former employer and its parent company); Cent. States, Se. & Sw. Areas Health & 

Welfare Fund v. Bollinger, Inc., 573 F. App’x 197, 201-02 (3d Cir. 2014) (in 

ERISA action, affirming motion to dismiss plaintiffs’ claims for reimbursement of 

duplicative medical benefits); Soley v. Wasserman, 08-9262, 2013 WL 1655989, at 

*2-3 (S.D.N.Y. Apr. 17, 2013) (applying state law to determine that compensation 

claim qualified as legal remedy without any consideration of surcharge, and 

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these cases, none of which involves Section 36(b), alters the longstanding rule that 

a request for losses resulting from a breach of fiduciary duty is exclusively 

equitable, or establishes that Plaintiffs’ request for “lost investment earnings” is 

anything but a request for equitable surcharge. The Seventh Amendment does not 

afford Plaintiffs a right to a jury trial on the request for lost investment earnings.

C. Plaintiffs’ Request For “Lost Investment Earnings” Is

Inextricably Intertwined With The Core Equitable Remedy They 

Seek.

Even if Plaintiffs’ request for “lost investment earnings” was not a request 

for equitable surcharge, which it is, a plaintiff is not entitled to a jury trial where a 

request for monetary damages is “inextricably intertwined” with equitable relief. 

Chauffeurs, 494 U.S. at 570-71; Tull v. United States, 481 U.S. 412, 424 (1987); In 

re YRC Worldwide, 2010 U.S. Dist. LEXIS 125654, at *16. Plaintiffs’ request for 

“lost investment earnings” on the amount of any fees deemed excessive is entirely 

 

denying jury trial on equitable accounting claim); Bethea v. Merchants 

Commercial Bank, No. 11-51, 2015 WL 1577976, at *3-4 (D.V.I. Apr. 1, 2015) (in 

ERISA action considering whether losses qualified as legal or equitable restitution, 

but failing to consider surcharge); Hellman v. Cataldo, No. 12-02177, 2013 WL 

4482889, at *1, *4 (E.D. Mo. Aug. 20, 2013) (in ERISA action, finding that 

plaintiffs’ requested remedy qualified as legal restitution); Healthcare Strategies, 

Inc. v. ING Life Ins. & Annuity Co., No. 11-282, 2012 WL 162361, at *7 (D. Conn. 

Jan. 19, 2012) (in ERISA action post-Amara, striking jury demands for equitable 

claims, and not addressing Supreme Court’s Amara analysis with respect to 

restitution claim); In re Globe Parcel Serv., Inc., 75 B.R. 381, 383 (E.D. Pa. 1987) 

(in bankruptcy adversary proceeding for negligence, conversion, breach of contract 

and breach of fiduciary duty, finding jury trial available where majority were legal 

claims). 

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dependent on and intertwined with their equitable claim for the return of those 

fees, and thus does not afford Plaintiffs a jury trial. 

In Alexander v. Primerica Holdings, Inc., 819 F. Supp. 1296, 1309 (D.N.J. 

1993), for instance, the plaintiffs brought a breach of fiduciary duty claim under 

ERISA for reinstatement of certain plan benefits. The plaintiffs also sought 

monetary damages for expenses and costs incurred as a result of the alleged breach 

of fiduciary duty in changing the benefit plan. Id. Noting that the “main thrust” of 

plaintiffs’ requested relief was “restitution and [was] equitable,” the court held that 

the monetary relief was “incidental to the overriding equitable relief sought by the 

class of Plaintiffs as a whole” and did not afford plaintiffs to a jury trial. Id. at 

1310; see also In re YRC Worldwide, Inc., 2010 U.S. Dist. LEXIS 125654, at*16 

(holding that relief was “inextricably intertwined” where “plaintiffs would not be 

entitled to money damages on behalf of the plan until they obtained a ruling that 

defendants breached their fiduciary duties”); see also Adams v. Cyprus Amax 

Minerals Co., 149 F.3d 1156, 1161 (10th Cir. 1998) (denying jury trial where 

threshold equitable issue was determinate of any claim for monetary damages);

Golden v. Kelsey-Hayes Co., 73 F.3d 648, 661 (6th Cir. 1996) (same). 

This case is no different. Plaintiffs’ request for “lost investment earnings” 

on any fees deemed excessive is wholly dependent on this Court’s determinations 

as to whether Defendants have breached any fiduciary duty and should return any 

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fees to the funds as restitution. Plaintiffs themselves argue that “lost investment 

earnings” requires a finding that the fees are excessive and cannot be computed 

absent such a finding. Pls.’ Br. at 17. Thus, even according to Plaintiffs, “lost 

investment earnings” do not constitute relief that is separable from Plaintiffs’ 

equitable claims and on which Plaintiffs could base an independent cause of action. 

Cf. Tull, 481 U.S. at 424 (relief is not intertwined if it qualifies as a separate and 

independent remedy). Accordingly, such request for relief does not entitle 

Plaintiffs to a jury trial.

III. PLAINTIFFS’ SHOULD BE PRECLUDED FROM SEEKING “LOST 

INVESTMENT EARNINGS.”

In any event, Plaintiffs should be precluded from offering evidence on “lost 

investment earnings” due to their acknowledged failure to comply with their 

discovery obligations under the Federal Rules.

A. Plaintiffs Do Not Dispute That They Failed To Disclose 

Computations Of “Lost Investment Earnings.”

Notably, Plaintiffs do not dispute that they failed to disclose computations of 

“lost investment earnings” in their initial disclosures, or at any point during the 

more than two years of fact or expert discovery, and thus violated Rule 26. See 

Fed. R. Civ. P. 26(a)(1)(A)(iii). As a result, the Court has discretion to preclude 

Plaintiffs from introducing any evidence of “lost investment earnings” at trial, 

unless Plaintiffs demonstrate that their failure to disclose was substantially justified 

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or harmless. See Fed. R. Civ. P. 37(c)(1); Nicholas v. Pa. State Univ., 227 F.3d 

133, 148 (3d Cir. 2000) (affirming order precluding plaintiff from introducing any 

evidence of future lost earnings at trial); Glielmi v. Raymond Corp., No. 09-5734, 

2013 U.S. Dist. LEXIS 7128, at *21 (D.N.J. Jan. 17, 2013) (articulating burden). 

Plaintiffs fail to carry their burden. Plaintiffs do not argue that their failure 

to disclose during discovery is substantially justified. Rather, Plaintiffs are left to 

argue that their failure to disclosure computations of alleged “lost investment 

earnings” as required is immaterial. See Pls.’ Br. at 2, 15-20. As explained below, 

it is not. The Court should therefore preclude Plaintiffs from introducing evidence 

of “lost investment earnings” at trial. 

B. Precluding Plaintiffs From Introducing Evidence Of “Lost 

Investment Earnings” At Trial Is Appropriate.

To determine whether the sanction of excluding evidence from trial is 

warranted, courts in the Third Circuit consider several factors, often referred to as 

the Pennypack factors, including: (1) the prejudice or surprise of the party against 

whom the evidence would be offered; (2) the ability of that party to cure the 

prejudice; (3) the extent to which permitting the evidence would disrupt the orderly 

and efficient trial of the case; (4) the presence of any bad faith or willfulness in not 

disclosing the evidence; and (5) the importance of the evidence. See, e.g., 

Nicholas, 227 F.3d at 148; AstraZeneca LP v. Breath Ltd., No. 08-1512, 2014 U.S. 

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Dist. LEXIS 136008, at *12 (D.N.J. Sept. 26, 2014) (Bumb, J.). Each factor falls 

decidedly in favor of exclusion.

1. Defendants Would Suffer Incurable Prejudice.

With respect to the first factor, Defendants would be prejudiced if Plaintiffs 

were permitted to seek lost investment earnings at trial. See Defs.’ Br. at 25-26. 

Courts in the Third Circuit routinely find that the first Pennypack factor favors 

exclusion where, as here, the litigation has progressed through discovery and the 

party against whom the evidence would be offered is preparing for trial. See, e.g., 

AstraZeneca LP, 2014 U.S. Dist. LEXIS 136008, at *13-14; Glielmi, 2013 U.S. 

Dist. LEXIS 7128, at *21-22; Young v. Pleasant Valley Sch. Dist., No. 07-854, 

2011 U.S. Dist. LEXIS 42353, at *4-5 (M.D. Pa. Apr. 19, 2011). 

Plaintiffs assert that there is no prejudice to Defendants because the 

information needed to calculate “lost investment earnings” is accessible to 

Defendants, presumably somewhere in the more than 2.5 million pages produced 

during discovery in this case. See Pls.’ Br. at 2, 17-20. This assertion sets the 

discovery process and the burden of proof at trial on their heads. See Silver State 

Broad., LLC v. Beasley FM Acquisition, No. 11-1789, 2016 U.S. Dist. LEXIS 

8904, at *11 (D. Nev. Jan. 25, 2016) (“[A] plaintiff cannot shift to the defendant 

the burden of attempting to determine the amount of the plaintiff’s alleged 

damages.”) (citation and internal quotation marks omitted). 

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Unsurprisingly, courts have repeatedly rejected the argument Plaintiffs make 

here. For example, in Silver State, the court held that the “risk of prejudice to the 

defendants is substantial,” despite plaintiffs’ argument that they provided 

“documents and evidence from which the defendants could discern the damages 

computation.” Id. at *10, *13. The court explained that requiring defendants to 

proceed to trial without an understanding of how “damages were calculated is trial 

by ambush.” Id. at *13.12 This is precisely the situation Defendants face here. 

Similarly, courts have rejected Plaintiffs’ argument that there is no prejudice 

to Defendants because the damages computation is purportedly simple. See, e.g., 

Dayton Valley Inv’rs, LLC v. Union Pac. R.R. Co., No. 08-127, 2010 U.S. Dist. 

LEXIS 108232, at *13-14 (D. Nev. Sept. 24, 2010) (“The simplicity of the 

calculation simply underscores the gravity of the [non-disclosing party’s] 

failure.”). 13 Plaintiffs’ argument is also belied by the fact that Plaintiffs still have 

 12 See also MKB Constructors v. Am. Zurich Ins. Co., No. 13-611, 2014 U.S. Dist. 

LEXIS 137495, at *19 (W.D. Wash. Sept. 29, 2014) (“[T]he fact that the [plaintiff] 

provided other documents or information within the discovery period from which 

[defendant] might have divined [plaintiff’s] . . . damages calculation is insufficient 

to avoid prejudice or harm to [defendant].”); Kodak Graphic Commc’ns Can. Co. 

v. E.I. Du Pont de Nemours & Co., No. 08-6553, 2013 U.S. Dist. LEXIS 151922, 

at *14 (W.D.N.Y. Oct. 22, 2013) (prejudice weighed “decidedly in favor of 

preclusion,” despite “claim that the damages were contained within the 600,000 

pages of discovery exchanged in this case”).

13 In discussing the first Pennypack factor, Plaintiffs rely upon four cases that 

purportedly have “similar circumstances” to those presented here. Pls.’ Br. at 17-

18. Plaintiffs are incorrect. Notably, unlike here, the non-disclosing party in each 

case disclosed a computation of damages. See, e.g., Baptiste v. Rohn, No. 13-104, 

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not provided any computation of “lost investment earnings,” notwithstanding the 

alleged simplicity of the calculation.14 

Turning to the second Pennypack factor, there is no cure for the prejudice 

Defendants would suffer if Plaintiffs are allowed to seek “lost investment 

earnings” at trial. Any measure to cure such prejudice will interrupt trial 

preparation and result in unnecessary burden and expenses to Defendants. See, 

e.g., Glielmi, 2013 U.S. Dist. LEXIS 7128, at *22 (second factor weighed in favor 

of exclusion where prejudice could not be “cured in a timely and cost-efficient 

manner”); Young, 2011 U.S. Dist. LEXIS 42353, at *5 (“unclear how [defendants’] 

prejudice can be cured” where permitting undisclosed evidence would “interrupt 

 

2016 U.S. Dist. LEXIS 41095, at *5 (D.V.I. Mar. 29, 2016) (plaintiff provided 

“calculation of damages for her lost wages claim”); Norfolk S. Ry. Co. v. 

Pittsburgh & W. Va. R.R., No. 11-1588, 2015 U.S. Dist. LEXIS 92159, at *3-4 

(W.D. Pa. July 15, 2015) (plaintiffs disclosed “calculation of damages” and 

“itemize[d]” the dollar amount sought); Midwest Elec. Coop. Corp. v. Tri-State 

Generation & Transmission Ass’n, Inc., No. 10-2349, 2014 U.S. Dist. LEXIS 

58574, at *5 (D. Colo. Apr. 28, 2014) (plaintiffs provided “calculation of 

damages”); Maharaj v. Cal. Bank & Tr., 288 F.R.D. 458, 463 (E.D. Cal. 2013) 

(plaintiff disclosed computation of lost wages but no “analysis of her 

computation”).

14 Plaintiffs contend that lost investment earnings can only be calculated after trial 

once the amount of allegedly excessive fees has been determined. See Pls.’ Br. at 

17. This contention has no basis. Plaintiffs’ expert Dr. Pomerantz submitted a 

report computing the amounts of allegedly excessive fees. Hora Decl. Ex. 2. 

Plaintiffs’ contention also fails as a matter of law. See City of Rome v. Hotels.com, 

L.P., 549 F. App’x 896, 905 (11th Cir. 2013) (failure to compute damages was not 

justified, despite plaintiffs’ argument that they lacked “certified data” to calculate 

damages and a “final recalculation of damages would have been necessary”).

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trial preparation”). The Federal Rules require complete disclosure of Plaintiffs’ 

“lost investment earnings” theory, including computations in their initial 

disclosures and a written report from an expert that will testify at trial on this 

theory. See Fed. R. Civ. P. 26. Despite more than two years of discovery, 

Plaintiffs have failed to comply with these basic disclosure requirements. 

Reopening discovery on the eve of trial and forcing Defendants to, among other 

things, analyze any new disclosures that Plaintiffs are required to provide on lost 

investment earnings, retain an expert to rebut Plaintiffs’ “lost investment earnings” 

computations (which still have not been disclosed), and engage in further expert 

depositions will only accentuate the prejudice to Defendants. See, e.g., 

AstraZeneca LP, 2014 U.S. Dist. LEXIS 136008, at *13-14 (prejudice incurable 

where expert discovery had closed and thus defendants were “unable to hire an 

expert of their own to conduct the tests, or to otherwise adequately rebut 

[Plaintiffs’ expert’s] results”).

2. The Remaining Pennypack Factors Favor Exclusion.

The remaining Pennypack factors also favor precluding Plaintiffs from 

introducing evidence of “lost investment earnings” at trial. With respect to the 

third factor, allowing Plaintiffs to introduce such evidence would result in a “more 

complicated and lengthy trial,” thereby disrupting the efficient resolution of this 

litigation. See Glielmi, 2013 U.S. Dist. LEXIS 7128, at *23. Plaintiffs themselves 

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suggest that allowing the introduction of evidence of “lost investment earnings” 

will result in an additional trial phase. See Pls.’ Br. at 19-20 (“[A]fter a finding of 

liability has been made and the amount of excessive fees determined, Plaintiffs will 

furnish evidence . . . that will allow the trier of fact to calculate lost investment 

earnings.”). Moreover, Defendants would need to call additional witnesses to 

rebut Plaintiffs theories and calculations.

Turning to the fourth factor, Plaintiffs argue that they have not acted in bad 

faith (Pls.’ Br. at 19),15 but the relevant factor is bad faith or willful failure to 

disclose evidence. Nicholas, 227 F.3d at 148. A party’s failure is willful where 

the party offers no reasonable explanation for its failure. See Mercedes Benz USA 

LLC v. Coast Auto. Grp. Ltd., No. 99-3121, 2008 U.S. Dist. LEXIS 72172, at *10-

11 (D.N.J. Sept. 23, 2008). Here, Plaintiffs have offered no reasonable explanation 

for their failure to compute the alleged “lost investment earnings” in their initial 

disclosures as required by Rule 26(a). The only rationale offered is that “lost 

investment earnings” can only be calculated after trial once the amount of 

allegedly excessive fees has been determined. But this argument rings hollow for 

 15 Plaintiffs argue that bad faith does not exist because Defendants purportedly 

“had the opportunity to explore any bases for [lost investment earnings] during 

discovery.” Pls.’ Br. at 19. This argument again misconstrues the parties’ burdens 

in the discovery process. See, e.g., Kodak Graphic, 2013 U.S. Dist. LEXIS 

151922, at *11 (rejecting argument that party should have asked “the right 

deposition questions regarding a computation that [was] never provided” because 

“[s]uch a result would be contrary to the purpose of the discovery rules”).

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the reasons set forth above (see p. 26 n.14): Plaintiffs’ expert Dr. Pomerantz 

submitted a report computing the amounts of allegedly excessive fees. Hora Decl. 

Ex. 2.

Finally, with respect to the fifth factor, evidence of “lost investment 

earnings” is not important. As explained above, “lost investment earnings” is not a 

cognizable remedy under Section 36(b). See Section I.A. Furthermore, Plaintiffs 

apparently did not believe such relief was important—they did not raise the 

concept in discovery or their expert reports. See Glielmi, 2013 U.S. Dist. LEXIS 

7128, at *23 (finding undisclosed information not important to case because if it 

was, it “would have undoubtedly been produced earlier”).

In sum, each of the Pennypack factors warrants precluding Plaintiffs from 

introducing evidence of lost investment earnings at trial.

IV. THE COURT SHOULD NOT EMPANEL AN ADVISORY JURY.

Plaintiffs’ cross-motion to empanel an advisory jury should be denied. An 

advisory jury would have no proper role in this case. Although Federal Rule of 

Civil Procedure 39(c)(1) provides a court with discretion to “try any issue with an 

advisory jury,” advisory juries are used only in rare and exceptional circumstances. 

See, e.g., Moss v. Lane Co., Inc., 471 F.2d 853, 855 (4th Cir. 1973) (use of 

advisory juries “should be restricted . . . to the exceptional case where there are 

peculiar and unique circumstances supporting its use”); Reich v. King, 861 F. 

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Supp. 379, 385 (D. Md. 1994) (denying motion in case “for a breach of fiduciary 

duty under ERISA,” where circumstances were “not so unique or exceptional as to 

warrant the use of an advisory jury”).16 A critical consideration that courts 

examine in deciding whether to use an advisory jury is whether doing so would be 

an efficient use of judicial resources and jurors’ time, a question that Plaintiffs 

conspicuously avoid.17 Because advisory juries add inefficiencies and 

complications, they are used typically only when: (1) a plaintiff asserts multiple 

claims, some of which will be tried to a jury as of right, and a court allows the jury 

to advise on non-jury claims with overlapping issues; or (2) an advisory jury would 

assist the court in determining community norms where the underlying legal 

 16 See also, e.g., In re Currency Conversion Fee Antitrust Litig., No. 04-5723, 2012 

WL 4361443, at *2-3 (S.D.N.Y. Sept. 11, 2012) (denying motion for advisory jury 

in antitrust lawsuit, and noting parenthetically that such juries are not empaneled 

except in “extraordinary or peculiar or unique, or exceptional cases where there are 

unique circumstances”); Ollier v. Sweetwater Union High Sch. Dist., 267 F.R.D. 

338, 339 (S.D. Cal. 2010) (same in Title IX lawsuit, where “no special factors or 

extraordinary circumstances present”); Doe v. Barrow County, No. 03-156, 2005 

WL 6033020, at *5 (N.D. Ga. Mar. 3, 2005) (same in constitutional challenge); 

Fleming v. Peavy-Wilson Lumber Co., 38 F. Supp. 1001, 1003 (W.D. La. 1941) 

(same in Fair Labor Standards Act lawsuit, reasoning that: “The right to direct the 

trial of issues with an advisory jury will not be exercised by a court of equity 

without substantial reasons. An advisory jury is used only in extraordinary cases, 

to inform the conscience of the court.”) (citation and internal quotation marks 

omitted); 8 J.W. Moore et al., Moore’s Federal Practice § 39.41, at 39-87 (3d ed. 

2004).

17 See, e.g., Ollier, 267 F.R.D. at 339 (denying motion for advisory jury in Title IX 

case because it “would add unnecessary expense, time and complexity to a case 

that has no special factors or extraordinary circumstances” warranting an advisory 

jury).

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standards in the case require an application or understanding of such norms. 

Neither of these circumstances is present here. 

A. Empaneling An Advisory Jury Would Lead To Inefficiency, 

Delay, And A Waste Of Judicial Resources.

The Court indicated in its recent summary judgment decision that it does not 

expect trial in this matter to take more than a few days. Kasilag, 2016 U.S. Dist. 

LEXIS 47063, at *60. Empaneling an advisory jury, however, would impose 

unnecessary burdens, inefficiencies, and delay on the Court and the parties. As 

Plaintiffs’ brief indicates, advisory juries are most often used in cases with 

overlapping factual issues that cut across claims that are triable to a jury and others 

that are triable to the court. But those are not the facts of this case. The only 

claims in this lawsuit arise under Section 36(b), and there is no right to a jury trial 

on those claims for the reasons already stated in Defendants’ briefing.18 Under 

these circumstances, courts rarely empanel a jury to serve exclusively in an 

advisory capacity because of the substantial burdens a jury trial places on the 

parties, the court, and, of course, the jurors compelled to serve. See, e.g., In re 

Currency Conversion Fee Antitrust Litig., 2012 WL 4361443, at *2 (denying 

motion for advisory jury, reasoning that, “[b]ecause none of Plaintiffs’ claims are 

 18 Plaintiffs argue that an advisory jury should be empaneled because it would 

“promote judicial efficiency” if “it is subsequently determined on appeal that 

Plaintiffs have a right to a jury trial.” See Pls.’ Br. at 22. But for all of the reasons 

articulated in Defendants’ briefing, there is nothing uncertain about the 

unavailability of a jury trial under Section 36(b). No court has ever granted one.

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triable of right by a jury, empaneling an advisory jury to determine whether 

Defendants engaged in a conspiracy would waste judicial resources and generate 

inefficiencies”); Forrest v. Omega Protein, Inc., No. 11-92, 2011 WL 4352302, at 

*4 (E.D. Va. Sept. 16, 2011) (“empaneling a jury in an advisory capacity would 

result in an inefficient use of judicial resources”); Skoldberg v. Villani, 601 F. 

Supp. 981, 982 (S.D.N.Y. 1985) (denying request for advisory jury because any 

role it would play did “not justify the additional time and expense involved in 

presenting this case to a jury”).19 

Indeed, as in the Currency Conversion, Forrest, and Skoldberg cases, 

empaneling an advisory jury here would result in substantial inefficiencies, 

additional complexities, and considerably more work for the Court and the parties. 

For example, the use of an advisory jury here would require, among other things:

• Voir dire;

• Repeated sidebars during the course of trial;

• Preparation and consideration of jury instructions and the holding of 

one or more jury instruction conferences;

• Reading into the record or reviewing in open court recorded testimony 

that the Court could otherwise accept and review at a later time;

 19 See also Van Asdale v. Int’l Game Tech., No. 04-703, 2010 WL 1490349, at *7 

(D. Nev. Apr. 13, 2010) (denying advisory jury request in Sarbanes-Oxley action, 

reasoning that, inter alia, it “imposes a burden on jurors whose ultimate decision 

may not matter”); Dewey Elecs. Corp. v. Montage, Inc., 117 F.R.D. 73, 75 (M.D. 

Pa. 1987) (same in patent infringement case because bench trial would save 

judicial resources).

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• Extensive requests during the course of trial for limiting instructions;

• Complex evidentiary rulings;

• Far more extensive motions in limine to prevent confusion regarding 

complicated economic evidence bearing on economies of scale, 

comparative fee structures, expense allocations and profitability, 

among other things, that would more readily be weighed and 

understood by the Court sitting as the trier of fact;

• Far more extensive trial objections which otherwise might not be 

made; and

• Jury deliberations.

All of these time-consuming tasks would be avoided in a bench trial. See, e.g.,

Dewey, 117 F.R.D. at 75; cf. Rosen v. Dick, 83 F.R.D. 540, 544 (S.D.N.Y. 1979) 

(“A bench trial always moves more expeditiously than a jury trial.”).

Moreover, none of these significant burdens would be offset by any material 

advantages. As a number of courts have noted, the “interests of judicial economy 

would not be served . . . by empaneling an advisory jury because the Court will 

still have to make its own findings of fact and conclusions of law.” In re Pan Am 

Corp., No. 93-7125, 1994 WL 174318, at *4 (S.D.N.Y. May 3, 1994); see also, 

e.g., Skoldberg, 601 F. Supp. at 982 (“Whatever value the views of a jury may 

have is diminished by the fact that the Court must still come to its own judgment in 

accordance with Fed. R. Civ. P. 52(a).”).

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B. There Is No Special Role For Advisory Juries In Section 36(b) 

Cases, And This Case Does Not Implicate Any Unique Issues That 

Justify Empaneling An Advisory Jury.

Ignoring the inefficiencies and needless complexities that an advisory jury 

would create, Plaintiffs argue that, because one of Defendants’ experts commented 

in a background section of his report that many individuals have purchased subadvised mutual funds, an advisory jury would be especially appropriate for this 

Section 36(b) case. Pls.’ Br. at 26. Plaintiffs are wrong.

Plaintiffs’ Section 36(b) claim does not require defining a community-based 

standard of morality or “reasonableness.” Quite the contrary, “reasonableness” is 

an impermissible standard for judging advisory fees in Section 36(b) lawsuits. 

Jones, 559 U.S. at 341. As the Supreme Court observed, “Congress rejected a 

‘reasonableness’ requirement that was criticized as charging the courts with ratesetting responsibilities. . . .” Id. at 352. The inquiry under Section 36(b) focuses 

on the adviser itself, the value of its services rendered, and a series of additional 

factors that the courts weigh (see id. at 349-52)—all in an attempt to determine 

whether the fees charged fall within a range of what arm’s-length negotiations 

among fiduciaries and investment advisors might produce.20 The inquiry does not

 20 One of these factors is the fees charged by comparable mutual funds, and because 

Defendants’ expert discusses this factor—as experts regularly do in Section 36(b) 

cases—Plaintiffs’ claim that this case is well-suited for an advisory jury. Pls.’ Br. 

at 26. But a jury would bring no special expertise to bear on this technical 

question—which does not involve any “community standards” —and Jones makes 

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involve the sort of shifting community norms that might help judges determine 

whether, for example, a photograph is obscene. As another district court held 

recently in a breach of fiduciary duty case under ERISA, “[w]hile Plaintiff argues 

that an advisory jury would incorporate the public’s views of morality, it is the job 

of the Court to decide the legal viability of Plaintiff’s claims and the Court has an 

extensive and comprehensive statutory and regulatory framework . . . to rely on.” 

Beesley v. Int’l Paper Co., No. 06-703, 2009 WL 260782, at *6 (S.D. Ill. Feb. 4, 

2009) (advisory jury would not promote judicial economy but would “prolong 

proceedings, substantially increase the cost of the trial to the parties, and divert the 

Court’s resources”). This reasoning is particularly apt here.

Furthermore, no court has ever empaneled an advisory jury in connection 

with a Section 36(b) case. Plaintiffs suggest that their request for an advisory jury 

is bolstered by an order entered sua sponte by a district judge in the Western 

District of Pennsylvania in a separate litigation brought by Plaintiffs’ lawyers 

 

clear that the analysis necessary to determine whether an advisory fee violates 

Section 36(b) must be assessed by courts. Jones, 559 U.S. at 349-52 (“courts may 

give such comparisons [of fees charged to funds and other investment advisory 

clients] the weight that they merit in light of the similarities and differences 

between the services that the clients in question require, but courts must be wary of 

inapt comparisons”; “courts should be mindful that the Act does not necessarily 

ensure fee parity between mutual funds and institutional clients contrary to 

petitioners’ contentions”; “[w]here a board’s process for negotiating and reviewing 

investment-adviser compensation is robust, a reviewing court should afford 

commensurate deference to the outcome of the bargaining process”; “the standard 

for fiduciary breach under § 36(b) does not call for judicial second-guessing of 

informed board decisions”).

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against a different mutual fund advisor. Pls.’ Br. at 25. However, this issue was 

never briefed in that case. Moreover, because the case was never tried, no advisory 

jury was ever empaneled. In any event, a review of the order in question 

underscores the needless complexity which an advisory jury would add to this 

case: the order required, inter alia, that the parties prepare “verdict forms 

consisting of specific interrogatories that correlate to the separate components of 

the Gartenberg standard as construed and clarified in Jones and in a manner that 

identifies each central fact inquiry or mixed question of law and fact under that 

construction. . . .” Declaration of Daniel S. Sweetser, dated June 6, 2016 (ECF No. 

199-2), Ex. D.

Plaintiffs’ other citations do not in any way suggest that an advisory jury 

should be empaneled here. The authority on which Plaintiffs rely principally to 

support their request for an advisory jury is NAACP v. Acusport Corp., 226 F. 

Supp. 2d 391, 398 (E.D.N.Y. 2002). But that case is simply illustrative of one of 

the categories of cases discussed above, i.e., those requiring a definition of a 

community-based standard. In Acusport, the NAACP sued gun manufacturers and 

distributors for injunctive relief, contending that their marketing methods 

endangered the “public health, safety, and peace.” Id. at 400. Observing that 

advisory juries originally were conceived by the English Chancery Court “to have 

its conscience enlightened,” the district judge in Acusport reasoned that an 

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advisory jury might be helpful because the NAACP’s claims implicated 

“community-based standards,” which themselves “may incorporate the public’s 

views of morality and changing common law.” Id. at 397-98 (citation and internal 

quotation marks omitted). The court concluded that, in determining whether the 

gun manufacturers and distributors had unlawfully endangered the public health, 

safety and peace, it was appropriate “to take into consideration the values and 

standards of the community” via an advisory jury “representative of our diverse 

community.” Id. at 400.21

Courts regularly deny requests for advisory juries when, as here, a jury is not 

already being empaneled to hear legal claims and “community standards” are not 

at issue. See, e.g., Kramer v. Banc of Am. Sec., LLC, 355 F.3d 961, 967 (7th Cir.), 

cert. denied, 542 U.S. 932 (2004) (affirming denial of request for advisory jury on 

disability discrimination claim where district court “saw no point to the expense 

and time of an advisory jury, particularly on an issue that I suspect I need no 

advice”) (citation and internal quotations marks omitted); Schuster v. Shepard 

Chevrolet, Inc., No. 99-8326, 2002 WL 507130, at *11 (N.D. Ill. Apr. 3, 2002) 

 21 Not surprisingly, a number of the authorities cited in Acusport as examples of the 

use of advisory juries also involved causes of action dependent upon community 

standards of morality or requiring application of a “reasonableness” standard. 226 

F. Supp. 2d at 398-99 (citing to cases involving whether the community would 

consider magazines to be obscene; issues of what constitutes “reasonable 

suspicion” justifying a search; whether community viewed nearby landfill to be a 

nuisance; and whether distress claimed by plaintiffs from having mail opened by 

the CIA “was of the sort that would be experienced by reasonable people”).

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(same in age discrimination case, where “the benefit to be derived from an 

advisory verdict would not outweigh [the] additional burdens that would be 

imposed on the jury”); Ollier, 267 F.R.D. at 339 (advisory jury “would add 

unnecessary expense, time and complexity” to Title IX case); see also United 

Power Ass’n v. Fed. Emergency Mgmt. Agency, No. 99-180, 2001 WL 1789404, at 

*3 (D.N.D. Aug. 14, 2001) (declining request in FEMA case); EEOC v. HI 40 

Corp., Inc., No. 93-0230, 1994 WL 421494, at *1 (W.D. Mo. Apr. 5, 1994) (same 

in EEOC case).

Finally, it is insufficient for Plaintiffs to invoke “national public policy” as a 

purported justification for empaneling an advisory jury here. Pls.’ Br. at 23. 

Countless equitable actions involve the enforcement of federal statutes that, by 

definition, involve issues of national policy. But that has never been deemed 

sufficient when, as here, there are no resulting trial efficiencies and the legal 

standards to be applied are not community based. See, e.g., Ollier, 267 F.R.D. at 

339 (rejecting “subtle suggestion” of proponent of advisory jury that Title IX 

“should be influenced by community beliefs about the funding of sports programs 

in the local schools or gender equality”).

CONCLUSION

For all the reasons stated above and in Defendants’ opening brief, 

Defendants respectfully request that the Court strike Plaintiffs’ jury demands in 

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their entirety, preclude Plaintiffs from offering evidence of “lost investment 

earnings,” and deny Plaintiffs’ cross-motion to empanel an advisory jury.

Dated: June 24, 2016

MILBANK, TWEED, HADLEY 

& MCCLOY LLP

Sean M. Murphy (pro hac vice)

Robert C. Hora (pro hac vice)

28 Liberty Street

New York, NY 10005-1413

(212) 530-5000

Of Counsel

SHERMAN WELLS SYLVESTER 

& STAMELMAN LLP

By: /s/ Anthony Sylvester 

Anthony Sylvester

210 Park Avenue, 2nd Floor

Florham Park, NJ 07932

(973) 302-9700

Attorneys for Defendants 

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