Opinion ID: 149655
Heading Depth: 2
Heading Rank: 1

Heading: Lawton and Miller

Text: The following facts are taken from appellants' amended complaints unless otherwise noted. Appellants William D. Lawton and Gerald G. Miller, Jr. were both longtime employees of Xerox. Xerox employees who were eligible for retirement could elect to receive either lifetime monthly retirement benefits or a one-time lump sum retirement benefit. Appellee David Isabella was a Senior Vice-President of Morgan Stanley, a retirement specialist, and a former Xerox employee. At various times between 1994 and 2001, Lawton and Miller consulted with Isabella about retirement. Lawton and Miller allege that during these meetings, Isabella provided retirement but not investment advice, performed various calculations, and advised them that they had sufficient savings to retire early and comfortably. Specifically, Lawton and Miller allege that Isabella advised them that if they could live on annual withdrawals of approximately ten percent of their retirement savings, they could retire early without exhausting their savings' principal, a concept appellants refer to as the retirement income premise. Lawton and Miller further allege that they elected early retirement in reliance on Isabella's advice, leaving behind job security and substantial benefits. Both elected to take a lump sum retirement benefit, which they invested, about eighteen months after they first met with Isabella, in various securities through Morgan Stanley. Subsequently, the value of their portfolios dropped precipitously, resulting in substantially reduced monthly withdrawals and significant financial hardship. Lawton and Miller filed (and subsequently amended) a putative class action against Isabella and Morgan Stanley. The amended complaint asserted various state law causes of action, including negligence, breach of fiduciary duty, negligent misrepresentation, and breach of contract, as well as an unfair and deceptive trade practices claim under Section 349 of the New York General Business Law. N.Y. Gen. Bus. L. § 349 (McKinney 2010). The amended complaint defined the putative class as Xerox employees who received similar retirement advice from Isabella and alleged that the putative class's size was between 100 to 300 or more persons. Morgan Stanley and Isabella, relying on SLUSA, removed the case to federal court, and moved to dismiss. Lawton and Miller cross-moved to remand on the ground that they had not asserted federal claims.