Thomas v. Metropolitan Life Insurance
631 F.3d 1153
| 10th Cir. | 2011Background
- Thomases filed a putative class action alleging IAA securities-fraud claims and related claims from Met's sale of a VULP life policy.
- The district court dismissed the federal securities claims for lack of standing and later granted leave to amend to add Amanda Thomas as a named plaintiff for IAA claims.
- Discovery showed the Thomases bought only life insurance products, not securities, during the class period, so no named plaintiff had standing to assert securities claims.
- The district court partially denied leave to amend but allowed Amanda Thomas to be added; the TAC was filed asserting IAA claims only.
- Plaintiffs challenge the district court’s interpretation of the broker-dealer exemption under the IAA and Met’s summary-judgment win on that issue.
- The appeal is limited to whether the district court erred in (i) denying leave to amend to add securities-fraud claims and (ii) granting summary judgment on the IAA issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to amend for securities claims | Thomases had standing to add claims on appeal | Thomases lacked standing to challenge an order affecting nonparties | Dismissed for lack of standing |
| Broker-dealer exemption interpretation under IAA | Laxton’s advice was not solely incidental; he received special compensation | District court correctly held advice was solely incidental and no special compensation | Summary judgment affirmed; Laxton exempt |
Key Cases Cited
- Machella v. Cardenas, 653 F.2d 923 (5th Cir. 1981) (standing to amend pre-certification usually lacks appellate jurisdiction)
- Uselton v. Commercial Lovelace Motor Freight, Inc., 9 F.3d 849 (10th Cir. 1993) (aggrieved party requirement for standing on appeal)
- Clark v. State Farm Mut. Auto. Ins. Co., 590 F.3d 1134 (10th Cir. 2009) (live controversy pre-class certification governs standing)
- Amazon, Inc. v. Dirt Camp, Inc., 273 F.3d 1271 (10th Cir. 2001) (sua sponte standing duty and jurisdiction concerns)
- Fin. Planning Ass'n v. SEC, 482 F.3d 481 (D.C. Cir. 2007) (broker-dealer exemption context for IAA interpretation)
- United States v. Elliott, 62 F.3d 1304 (11th Cir. 1995) (broad definition of compensation for investment advisers)
- Russello v. United States, 464 U.S. 16 (1983) (distinction between compensation and special compensation)