Minnesota Court Denies Blue Cross Blue Shield Request for New Trial Against Wells Fargo

U.S. District Judge Donovan Frank has denied plaintiffs’ request for a new trial against Wells Fargo for securities lending related losses stemming from the financial crisis.

Last year, a jury in Minnesota ruled in favor of Wells Fargo, who faced a class action lawsuit from institutional investors, led by Blue Cross Blue Shield.

At that time, the court, bound by the jury’s verdict, also ruled that Wells Fargo did not breach its fiduciary duty for both Employee Retirement Income Security Act (ERISA) and non-ERISA claims.

However, the plaintiffs have recently tried to gain a new trial on the basis that “the Court’s findings in this case, are against the weight of the evidence and that the jury verdict resulted in a miscarriage of justice. Plaintiffs generally argue that they established each of the elements of their breach of fiduciary duty claims, and the jury’s verdict was therefore unsupported,” say court documents.

In particular, the plaintiffs claim that Wells Fargo breached its fiduciary duty such as with the construction of the securities lending program’s portfolio, changing redemption rights, and misrepresentations regarding the securities lending program.

Yet the Minnesota court concluded that the court jury reached the verdict using evidence, “although reasonable persons could differ regarding the conclusions to be drawn from the evidence presented, the jury’s verdict was not so contrary to the evidence as to amount to a miscarriage of justice.”

While the court noted that it still would have reached a different decision than that of the jury (as it said previously), the court denied the plaintiffs’ request for a new trial on the basis that the proceedings were carried out appropriately.

“We agree with the court’s findings in the rulings. As we stated previously, Wells Fargo was focused at all times on serving our clients’ interests and we worked very hard and responsibly to achieve the best results for all of the participants in the program during very difficult economic conditions,” says Wells Fargo.