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Plumbers and Pipefitters Local Union No. 630 Pension-Annuity Trust Fund v. Smith

United States District Court, M.D. Tennessee, Nashville Division

December 22, 2014

PLUMBERS AND PIPEFITTERS LOCAL UNION NO. 630 PENSION-ANNUITY TRUST FUND, Derivatively on Behalf of Community Health Systems, Inc., and ROOFERS LOCAL NO. 149 PENSION FUND, Plaintiffs,
v.
WAYNE T. SMITH, et al., Defendants.

ORDER

JOHN T. NIXON, Senior District Judge.

Pending before the Court is Defendants Wayne T. Smith, et al.'s Motion for Reconsideration of Order Granting In Part and Denying In Part Motion to Dismiss ("Motion for Reconsideration"). (Doc. No. 89.) For the reasons given below, Defendant's Motion for Reconsideration is DENIED and Defendant's Motion to Ascertain Status of Case (Doc. No. 103) is TERMINATED AS MOOT.

I. BACKGROUND

A. Factual Background

The Court adopts the factual background set forth in its order on Defendants' Motion to Dismiss. (Doc. No. 87 at 1-9.)

B. Procedural Background

Plaintiffs filed a Complaint in this Court on May 24, 2011 (Doc. No. 1), and subsequently filed an Amended Consolidated Complaint on March 15, 2012 ("Complaint") (Doc. No. 50), following the consolidation of this case with two other shareholder derivative lawsuits filed in this district (Case Nos. 3:11-cv-00952, 3:11-cv-00598) (Doc. No. 46). Plaintiffs originally alleged (1) breach of fiduciary duty; (2) gross mismanagement; (3) corporate waste; and (4) unjust enrichment, all derivatively on behalf of Community Health Systems, Inc. ("CHS"), a Delaware corporation that operates general acute care hospitals throughout the country with its executive offices located in Franklin, Tennessee. (Doc. No. 50.) Defendants filed a Motion to Dismiss on May 14, 2012 (Doc. No. 53), with a Memorandum in Support (Doc. No. 54), a declaration of John R. Jacobson (Doc. No. 55), and several exhibits (Doc. Nos. 55-1 to 55-11). Plaintiffs filed a Response on July 13, 2012 (Doc. No. 58), to which Defendants filed a Reply on August 27, 2012 (Doc. No. 60). The Court heard oral arguments on the Motion to Dismiss on June 13, 2013. (Doc. No. 73.)

On September 27, 2013, the Court granted Defendants' Motion to Dismiss with respect to Plaintiffs' claims for gross mismanagement, corporate waste, and unjust enrichment while denying Defendants' Motion with respect to Plaintiffs' breach of fiduciary duties claim. (Doc. No. 87.) On October 14, 2013, Defendants filed a Motion for Reconsideration (Doc. No. 89), along with a Memorandum of Law in Support (Doc. No. 90) and a Motion to Stay Discovery (Doc. No. 91). Plaintiffs filed an Opposition to Defendants' Motion for Reconsideration of Order Granting In Part and Denying In Part Motion to Dismiss on October 30, 2013. (Doc. No. 95.)

II. LEGAL STANDARD

Federal Rule of Civil Procedure 59(e) allows district courts to alter or amend a judgment "if there is a clear error of law, newly discovered evidence, an intervening change in controlling law, or to prevent manifest injustice." GenCorp, Inc. v. Am. Int'l Underwriters, 178 F.3d 804, 834 (6th Cir. 1999) (internal citations omitted). However, a Rule 59(e) motion "does not simply provide an opportunity to reargue a case." Whitehead v. Bowen, 301 F.Appx. 484, 489 (6th Cir. 2008). "Such a motion is extraordinary and is seldom granted because it contradicts notions of finality and repose." Gascho v. Global Fitness Holdings, LLC, 918 F.Supp.2d 708, 714 (S.D. Ohio, 2013).

"[A] Rule 59(e) motion may not be used to argue a new legal theory.'" Roger Miller Music, Inc. v. Sony/ATV Publ'g, LLC, 477 F.3d 383, 395 (6th Cir. 2007) (quoting FDIC v. World Univ., Inc., 978 F.2d 10, 16 (1st Cir. 1992)). Instead, a party "must either clearly establish a manifest error of law or must present newly discovered evidence." Id. "Rule 59(e) motions are aimed at re consideration, not initial consideration. Thus, parties should not use them to raise arguments which could, and should, have been made before judgment issued." World Univ., Inc., 978 F.2d at 16 (citations and internal quotation marks omitted); see also Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367, 374 (6th Cir. 1998) (internal citations omitted).

III. ANALYSIS

In their Motion for Reconsideration, Defendants request the Court reconsider its previous order on Defendants' Motion to Dismiss because it was improperly analyzed. (Doc. No. 89.) First, Defendants implore the Court to reconsider inferences it made regarding the Board of Directors' involvement with admissions policies because those inferences were not well-pleaded in Plaintiffs' complaint and are disproved by documents before the Court. Second, Defendants contend that because Plaintiffs did not allege any viable damages that might be recoverable by the ...


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