Court Opinion

ID: 3021057
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:24:02.10396+00
Date Added: 2024-06-11T09:52:52.670420
License: Public Domain

United States Court of Appeals
                                FOR THE EIGHTH CIRCUIT

                                          ___________

                                          No. 97-2132
                                          ___________

In Re: Piper Funds, Inc.               *
Institutional Government Income        *
Portfolio Litigation.                  *
------------------------------------------------
                                       *
Richard J. Rodney, Jr.,                *
                                       *
      Plaintiff - Appellee,            *
                                       * Appeal from the United States
      v.                               * District Court for the
                                       * District of Minnesota
Piper Funds, Inc. Institutional        *
Government Income Portfolio, et al.,   *       [UNPUBLISHED]
                                       *
      Defendants - Appellees.          *
                                       *
Leon J. Savoie, et al.,                *
                                       *
      Appellants.                      *
                                  ___________

                                       Submitted: April 13, 1998
                                           Filed: July 24, 1998
                                         ___________

Before RICHARD S. ARNOLD,* Chief Judge, LAY and LOKEN, Circuit Judges.
                            ___________

       *
       The Honorable Richard S. Arnold stepped down as Chief Judge of the United
States Court of Appeals for the Eighth Circuit at the close of business on April 17,
1998. He has been succeeded by the Honorable Pasco M. Bowman, II.
PER CURIAM.

        Appellants are a class of trust settlors and beneficiaries. Their trustee,
Merchants Trust Company of Burlington, Vermont, invested some $40 million in the
Piper Funds, Inc. Institutional Government Income Portfolio. When that investment
soured, appellants sued Merchants in the United States District Court for the District
of Vermont. Meanwhile, a securities class action brought in the District of Minnesota
against the Portfolio and related defendants resulted in a settlement approved by the
district court.1 Merchants as trustee was the class member ostensibly entitled to the $4
to $4.5 million of settlement fund proceeds allocated to its Portfolio investments.
Merchants argued it was entitled to these settlement proceeds outright, as an offset to
voluntary payments it had made to restore appellants’ trusts. Appellants countered by
filing their own claims as members of the Piper class, moving to intervene, objecting
to the class action settlement because it provides for payment directly to Merchants,
and asserting a claim for attorney’s fees out of the settlement fund.

       The district court concluded it had jurisdiction to adjudicate all aspects of the
class action litigation but declined to exercise any supplemental jurisdiction it might
have to resolve the dispute between appellants and Merchants. The court denied
appellants’ motion to intervene and their direct claims against the settlement fund.
Acknowledging that the settlement class was broadly defined in the settlement
agreement, the court reasoned that allowing trust beneficiaries and their trustee to
participate in the settlement would result in a double recovery, and that the
beneficiaries should be excluded because they had no direct cause of action against the
Piper defendants. However, to protect the beneficiaries’ interests vis-a-vis Merchants,
the court invalidated Merchants’ Claim and Release Form to the extent it designated
Merchants as Payee, directed that no distribution of settlement proceeds be made to

      1
        The HONORABLE PAUL A. MAGNUSON, Chief Judge of the United States
District Court for the District of Minnesota.

                                          -2-
Merchants for sixty days to give appellants an opportunity to seek further relief from
a Vermont court, and ordered that any subsequent distribution to Merchants be made
payable “to Merchants, as trustee for the Trust.” Finally, the court denied appellants’
claim for attorney’s fees from the settlement fund, concluding that appellants’ attorneys
had not conferred benefit on any member of the settlement class.

       Appellants challenge the district court’s final order on numerous grounds, while
the Piper class plaintiffs and class defendants join in urging us to affirm. After careful
review of the record, we conclude the district court made an appropriate disposition of
the disputed portions of the settlement fund and did not abuse its discretion in declining
to exercise supplemental jurisdiction and in denying appellants’ claim for an attorney’s
fee award. The court carefully preserved appellants’ ability to litigate their unresolved
claims against Merchants in Vermont, while ensuring that distribution of this portion
of the settlement proceeds would serve to release claims of appellants and Merchants
against the Piper class defendants. We conclude that an extended opinion would be of
no precedential value. Accordingly, we summarily affirm. See 8th Cir. R. 47B.
Appellants’ motion for leave to file a supplemental memorandum is denied.

      A true copy.

             Attest:

                     CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

                                           -3-