United States District Court, S.D. Mississippi, Southern Division
THOMAS JONES, JOSEPH CHARLES LOHFINK, SUE BEAVERS, RODOLFOA REL, and HAZEL REED THOMAS, on behalf of themselves and others similarly situated PLAINTIFFS and MARTHA EZELL LOWE, individually and on behalf of a class of similarly situated employees
KPMG, LLP and TRANSAMERICA RETIREMENT SOLUTIONS CORP. DEFENDANTS
ORDER DENYING KPMG'S MOTION TO CERTIFY ORDER FOR
GUIROLA, JR. UNITED STATES DISTRICT JUDGE
THE COURT is the  Motion to Certify Order for
Interlocutory Appeal in which the defendant KPMG, LLP, asks
the Court to certify its  Memorandum Opinion and Order
denying KPMG's Motion to Dismiss for interlocutory
appeal. The parties have fully briefed the Motion to Certify.
After reviewing the submissions of the parties, the record in
this matter, and the applicable law, the Court finds that
KPMG's Motion to Certify should be denied.
putative class action arose out of the alleged under-funding
of the Singing River Health System Employees' Retirement
Plan and Trust. Lowe has sued KPMG, the company that audited
the annual financial statements of Singing River Health
System, and the Plan. The sole claim against KPMG is that it
“knowingly participated in and/or aided and abetted in
a breach of fiduciary duty by the Individual Trustees”
in its 2010 and 2011 audit reports by allowing or failing to
correct misleading statements that attributed the Trust's
under-funding to returns on investments and changed actuarial
filed a Motion to Dismiss arguing, inter alia, that no
Mississippi court has ever recognized a claim of aiding and
abetting breach of fiduciary duty. When denying KPMG's
Motion, the Court assumed, based on a prior case decided by
this Court, that Mississippi state courts would recognize a
cause of action for aiding and abetting breach of fiduciary
duty under the Restatement (Second) of Torts § 876(b).
KPMG filed the present Motion to Certify the Memorandum
Opinion and Order denying its Motion to Dismiss, asserting
for the first time that the Court erred by creating a new
Mississippi state law cause of action.
interlocutory appeals are governed by 28 U.S.C. §
1292(b), which creates a “narrow exception” to
the final judgment rule. In re Rolls Royce Corp.,
775 F.3d 671, 676 (5th Cir. 2014). Therefore, an
interlocutory appeal “is available only in limited
circumstances.” In re Lloyd's Register N. Am.,
Inc., 780 F.3d 283, 288 (5th Cir. 2015).
When a district judge, in making in a civil action an order
not otherwise appealable under this section, shall be of the
opinion that such order involves a controlling question of
law as to which there is substantial ground for difference of
opinion and that an immediate appeal from the order may
materially advance the ultimate termination of the
litigation, he shall so state in writing in such order.
28 U.S.C. § 1292(b).
requests certification of the following question: “Was
it error for the district court to make an Erie
guess as to the existence of an aiding and abetting breach of
fiduciary duty claim under Mississippi law?”
(Def.'s Mem. 2, ECF No. 27.) This question is a
controlling question of law.
Court must next determine whether there is a substantial
ground for difference of opinion as to this question of law.
KPMG cites In re DePuy Orthopaedics, Inc.,
Pinnacle Hip Implant Products Liability Litigation, 888
F.3d 753, 781-82 (5th Cir. 2018), for the proposition that,
“When sitting in diversity, a federal court exceeds the
bounds of its legitimacy in fashioning novel causes of action
not yet recognized by the state courts.” However, the
plaintiff, Martha Ezell Lowe, has identified a case in which
the Mississippi Supreme Court has recognized a cause of
action for aiding and abetting breach of fiduciary duty.
See Knox Glass Bottle Co. v. Underwood, 89 So.2d
799, 820-24 (Miss. 1956). In Knox, a corporation
sued several individuals, including former corporate officer
C. Alberta Luter, seeking to recover profits that the
individuals obtained by leasing trucks to the corporation.
KPMG claims that the Knox decision did not actually
create a cause of action for aiding and abetting breach of
fiduciary duty, but the following excerpt of the opinion
belies KPMG's assertion:
[T]he Court holds, that Miss Luter actively participated and
joined C.R. Underwood, with actual knowledge of the breach of
his fiduciary duties, in obtaining profits by truck rentals
from complainant corporation, and that she is liable for the
net profits received by her from the truck rentals on and
after January 1, 1952. All of these and other circumstances
render it manifest that C. R. Underwood and Luter were close
personal friends and business associates, and that she
knowingly participated with him and E. F. and J. H. Underwood
in the breach of their fiduciary duties to the corporation,
by the continuance in effect of the leases by her to the
corporation after Roy's death. She comes clearly within
the universally accepted rule that one who participates
with a fiduciary in a breach of his duties, with
knowledge that he is violating his obligations, is liable for
the profits received thereby from the corporation.
Id. at 824 (emphasis added).
this Court previously predicted that the Mississippi state
courts would recognize a cause of action for aiding and
abetting. See Dale v. Ala Acquisitions,Inc., 203 F.Supp.2d 694, 700-01 (S.D.Miss. 2002). As
a result, there are no conflicting opinions concerning
whether a cause of action for aiding ...