United States District Court, E.D. Arkansas, Western Division
BRENDA MORGAN, on behalf of herself and on behalf of all other persons similarly situated; and DONNA KELLETT, on behalf of herself and on behalf of all other persons similarly situated PLAINTIFFS
AFFILIATED FOODS SOUTHWEST, INC. DEFENDANT
OPINION AND ORDER
LEON HOLMES UNITED STATES DISTRICT JUDGE.
Foods Southwest, Inc., filed a petition for bankruptcy on May
5, 2009. On that same day, Affiliated Foods terminated the
employment of approximately 180-200 of its employees,
including the named plaintiffs, Brenda Morgan and Donna
Kellett. The present action began as an adversary proceeding
in bankruptcy on July 10, 2009. The plaintiffs filed a class
action complaint, alleging that Affiliated Foods violated the
Worker Adjustment and Retraining Notification Act (WARN
by failing to give employees at least sixty days advance
notice of termination. Affiliated Foods filed a motion to
withdraw the reference pursuant to 28 U.S.C. § 157(d),
Bankruptcy Rule 5011, and Local Rule 83.1(c) on April 30,
2015. The plaintiffs did not object to withdrawing the
reference and the motion was granted. The plaintiffs then
filed a motion for class certification pursuant to Federal
Rule of Civil Procedure 23. The Court granted the motion on
April 26, 2016. Document #42. Now, Affiliated Foods has filed
a motion for reconsideration. For the following reasons, the
motion for reconsideration is denied.
ruling on the motion for class certification, the Court
overruled an argument by Affiliated Foods that the named
plaintiffs would not be appropriate class representatives
because they are not subject to a defense - the liquidating
fiduciary principle - that applies to other class members.
The Court noted that it would not be proper in ruling on a
motion for class certification to determine whether that
principle shields Affiliated Foods from liability, and then
the Court included the following footnote:
Affiliated Foods initially filed for Chapter 11
reorganization bankruptcy on May 5, 2009 and did not convert
it to a Chapter 7 liquidation bankruptcy until July 6, 2009.
By June 12, 2009, only 49 employees remained with additional
employees scheduled for dismissal on June 19. Document #11-6.
The larger group of employees was terminated on May 5 and-as
admitted by Affiliated Foods-are unlikely to be subject to
the defense at all. Document #11-4; Document #11-5; Document
#19 at 28.
Document #42 at 10, n. 3. Affiliated Foods contends that the
Court misapprehended its position and requests that the Court
strike the last sentence of this footnote. Affiliated Foods
now says that it did not argue that the liquidating fiduciary
principle would apply only after its bankruptcy was converted
from Chapter 11 to Chapter 7. But the Court did not say that
that was the position of Affiliated Foods. Rather, the Court
recited the argument by Affiliated Foods that Morgan and
Kellett were not similarly situated to plaintiffs terminated
after May 5 because those plaintiffs are subject to the
liquidating fiduciary defense. The Court did not make any
statement predicting the defense’s applicability to
plaintiffs terminated after the bankruptcy filing but prior
to its conversions to a Chapter 7 bankruptcy.
Court did not misapprehend the position of Affiliated Foods.
Affiliated Foods argued:
further conflict is created because certain of the
putative class members are subject to the liquidating
fiduciary defense that would not entitle them to relief under
WARN Act. Plaintiffs, who were terminated prior to the
bankruptcy filing, are not similarly situated to
this group. Thus, Plaintiffs’ interests are not
co-extensive with that of the other class members, despite
allegations to the contrary." Document #19 at 28
(emphasis added). The Court accurately recited this position
in its opinion in order to address the arguments against
class certification, pointing out that "an inquiry into
the adequacy of class representatives concerns whether the
representatives are subject to a unique defense, not whether
other members of the class are subject to a unique
defense." Document #42 at 9 (citing In re Milk
Prods. Antitrust Litig., 195 F.3d 430, 437 (8th Cir.
1999). The Court was also clear that "[e]ven if the
Court were to recognize the liquidating fiduciary principle,
it [was] not proper to determine at [that] stage whether it
shields Affiliated Foods from WARN Act liability."
Document #42 at 10.
Affiliated Foods will be precluded in the future from arguing
that the liquidating fiduciary principle applies to the class
as a whole is not properly before the Court at this time.
Motions for reconsideration "serve a limited function:
to correct manifest errors of law or fact or to present newly
discovered evidence." Keene Corp. v. Int’l
Fidelity Ins. Co., 561 F.Supp. 656, 665-66 (N.D. Ill.
1982) (citations omitted). The Court did not make an error of
law or fact: rather, the Court accurately recited the
position of Affiliated Foods and properly certified the
class. Affiliated Foods has not presented newly discovered
evidence showing that class certification was
foregoing reasons, the motion for reconsideration is DENIED.
 29 U.S.C. § 2101, et