Opinion
Case No. 94 C 1890.
March 12, 2001.
MEMORANDUM, OPINION AND ORDER
This case is before the Court on Defendants' Motion for Summary Judgment, Plaintiffs' Renewed Motion to Bifurcate, and Defendants' Motion to Decertify the Class. For the following reasons, the motion for summary judgment is granted in part and we decline to exercise supplemental jurisdiction over the remaining state law claims. The motion to bifurcate and the motion to decertify the class are denied as moot.
BACKGROUND
The following factual allegations are taken from Defendants' Amended Rule 56.1 Statement of Material Facts and Plaintiffs' Rule 56.1(b)(3)(B) Statement of Material Facts. EdgeMark was an Illinois multi-bank holding company. From December of 1988 to May of 1994, EdgeMark had five subsidiary commercial banks: Merchandise National Bank, Edgewood Bank, First National Bank of Lockport, EdgeMark Bank of Rosemont and EdgeMark Bank of Lombard. On May 5, 1994, EdgeMark was merged into Old Kent-Illinois. Old Kent Illinois is an Illinois bank holding company which is a subsidiary of Old Kent Financial Corporation. This lawsuit concerns alleged material omissions that accompanied the merger between EdgeMark and Old Kent.
EdgeMark was formed with the purpose of selling itself to a larger regional or national bank holding company. This plan was the means by which the investors intended to realize the full value of their investment and was the basis upon which most of them had made their initial investment. The EdgeMark Voting Trust was formed in connection with the initial public offering of EdgeMark stock in December of 1988. Stockholders pledged their shares to the trust and in exchange received certificates in the Voting Trust. Approximately 62% of the issued and outstanding shares of EdgeMark were held in the Voting Trust from December of 1988 through December of 1992. The Voting Trust expired, by its own terms, on December 31, 1992, at which time the Trustees distributed the EdgeMark stock held in the Trust to the holders of the Voting Trust certificates.
In December of 1988, Blanchard, the class representative, purchased a Voting Trust certificate representing 2200 shares of stock in EdgeMark. He made this purchase with knowledge of the corporation's plan to sell EdgeMark to a larger bank holding company. In December of 1992, Blanchard exchanged his Voting Trust certificate for 2200 shares of EdgeMark common stock. Blanchard sold 1,200 shares of EdgeMark for $21.00 per share on July 12, 1993, and 1000 shares for $22.00 per share on August 10, 1993. Plaintiff sold his shares because he believed that EdgeMark was not moving towards selling the company to another bank holding company.
Since its inception, EdgeMark entered into several different negotiations in order to sell the corporation. On May 4, 1990, EdgeMark hired the investment banking firm of Blunt Ellis Loewi to act as its exclusive financial adviser for the purpose of selling the company to a third party. None of the parties have provided this Court with evidence as to whether EdgeMark announced the retention of earlier investment banking firms or whether EdgeMark publically reported on the status of early negotiations. Although that evidence would have been helpful, we will analyze only the evidence before the Court. On June 27, 1990, EdgeMark and Blunt Ellis entered into a letter agreement confirming their understanding that the minimum acceptable selling price for EdgeMark would be at least forty dollars per share. Blunt Ellis was unable to effectuate a sale of the company. On December 19, 1990, EdgeMark allowed the retention agreement to expire.
On June 4, 1991, EdgeMark hired Kemper Securities to act as its exclusive financial advisor for the purpose of assisting in the sale of the company. Kemper met with and obtained confidentiality agreements from Old Kent, First of America, and Firstar. However, Kemper was unable to effectuate a sale of the company. On August 23, 1991, EdgeMark terminated the Kemper agreement.
On October 30, 1992, the First Bank of Oak Park submitted a proposal to EdgeMark to acquire one of EdgeMark's subsidiary banks, Merchandise National Bank. EdgeMark's board considered and rejected the First Bank of Oak Park's offer.
The allegations in the instant complaint stem from EdgeMark's interactions with Donaldson, Lufkin, Jenrette ("DLJ"). George Morvis, an individual who performed marketing and public relations services for EdgeMark, invited Charles A. Bruning, the President and CEO of EdgeMark, to have dinner with him and David Olsen. Olson was an investment banker at DLJ. Shortly before November 6, 1992, Morvis, Bruning and Olson had dinner together. Bruning and Olson had never met or heard of each other before the dinner. At the dinner Olson gave a general "marketing spiel" about DLJ and Bruning discussed EdgeMark in general terms. The parties dispute whether Bruning implied that DLJ would be hired by EdgeMark. However, at the time of the November 1992 dinner, EdgeMark was not searching for investment banker and was not considering new plans to sell the entire holding company. Bruning did not advise the EdgeMark Board of Directors of his dinner with Olson and Morvis. Bruning requested that Olsen send him information on DLJ and a draft retention letter.
After the dinner, Olson sent Bruning a cover letter, enclosing a draft engagement letter and a booklet discussing DLJ and its financial institutions group. The booklet, although it contained the name EdgeMark on the first two pages, was a generic sales piece. Plaintiffs allege that a timetable was sent but have provided no evidence to support their claim and have improperly responded to defendants' Statement of Material Facts. For the purpose of this motion the letter was accompanied by only two enclosures. Bruning had no contact with Olson between the November 1992 dinner and May of 1993.
On December 2, 1992, at the request of Harris Bank, Bruning and Frank Novel of EdgeMark met with Tim Broccolo and Donald Boreman, officers of Harris Bank. They discussed the financial outlook for Merchandise National Bank and EdgeMark. Bruning stated that "the plan for 1993 is to spin off Merchandise to shareholders tax free after December 1993 and then sell the remaining four banks."
On January 12, 1993, Bruning met with Broccolo, Boreman and Bill Potterton for an update on EdgeMark's loans with Harris Bank. Bruning said "he would like to sell the remaining four banks, not Merchandise N.B. at the end of 1993 when the 5 year waiting period for a tax free spin off will occur." Merchandise's earnings improved dramatically in the first two quarters of 1993. After the turnaround, Bruning changed his mind about selling Merchandise individually.
In February of 1993, EdgeMark's shares began trading on the NASDAQ Small-Cap Market. On May 20, 1993, the Board discussed the proposal received from DLJ and authorized Bruning to enter into an engagement letter with DLJ. The EdgeMark Board of Directors executed an engagement letter with DLJ on June 1, 1993. DLJ delivered to EdgeMark an outline of its proposed analysis of strategic alternatives and a document request list. Before deciding whether to disclose the retention of DLJ to the shareholders, Bruning sought legal advice as to whether disclosure was legally required. EdgeMark's corporate counsel advised that disclosure was not required and EdgeMark did not disclose its retention of DLJ.
On August 2, 1993, Olson sent confidentiality agreements to several banks. Old Kent signed a confidentiality agreement on August 2, 1993. On August 24, 1993, Olson divided possible suitors into several tiers. Tier 1 consisted of Banc One, Old Kent and NBD. The Board directed Olson to contact the Tier 1 group. Olson stated that "a price range of between $35.00 and $45.00 per share could be attainable."
In September, Olson had initial discussions with NBD. In October, Banc One, Old Kent and Huntington Bancshares submitted indications of interest in EdgeMark. On October 21, 1993, DLJ advised the Board that indications of interest had been received from Banc One, Old Kent and Huntington Bancshares and that NBD had dropped out of the process. DLJ made a presentation analyzing the three different proposals and the EdgeMark Board directed Olson to proceed with negotiations with Old Kent.
On November 1, 1993, the EdgeMark board decided to enter into the agreement with Old Kent. On November 2, 1993, EdgeMark announced to the public that it had signed an agreement to be acquired by Old Kent. At the special meeting of stockholders convened to approve the sale of EdgeMark to Old Kent on April 5, 1994, Bruning announced that the sale was the "culmination of a five year Strategic Plan."
On August 17, 2000, plaintiffs filed their Fourth Amended Complaint. In Count I, they allege a violation of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (t). In Count II, in a state common law claim, plaintiffs allege that EdgeMark and the Director defendants concealed and intentionally took action to prevent the class from learning the material facts by failing to disclose them and omitting the facts from communications. The plaintiffs allege that the defendants committed common law fraud. In Count III, in a state common law claim, plaintiffs allege that defendants breached their fiduciary duties to the class. In Count IV, in a state common law claim, plaintiffs allege that defendants knowingly induced Beale, a former class representative, to breach his fiduciary duties to the class by entering into an individual settlement agreement with Beale.
We adopted the findings of the Magistrate Judge granting plaintiffs' motion for class certification and certified a class. Beale v. EdgeMark, 164 F.R.D. 649, Case No. 94 C 1890 (N.D.Ill. May 26, 1995). After an alteration, the class is currently defined as "all persons who sold, relinquished rights in or were deprived of ownership of shares of EdgeMark common stock on or after November 1, 1992 and on or before November 1, 1993."
DISCUSSION
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions of file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ P. 56(c). The party seeking summary judgment carries the initial burden of demonstrating an absence of evidence to support the position of the nonmoving party. Doe v. R.R. Donnelley Sons Co., 42 F.3d 439, 443 (7th Cir. 1994). The nonmoving party must then set forth specific facts showing that there is a genuine issue of material fact and that the moving party is not entitled to judgment as a matter of law. Anderson v. Liberty Lobby, 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986). A genuine dispute about a material fact exists only if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).
In making this determination, the Court must draw every reasonable inference from the record in the light most favorable to the nonmoving party and should not make credibility determinations or weigh evidence. Association Milk Producers, Inc. v. Meadow Gold Dairies, Inc., 27 F.3d 268, 270 (7th Cir. 1994). The nonmoving party must support its contentions with admissible evidence and may not rest upon the mere allegations in the pleadings or conclusory statements in affidavits. Celotex, 477 U.S. at 324. The plain language of Rule 56(c) mandates the entry of summary judgment against a party who fails to establish the existence of an element essential to its case and on which that party will bear the burden of proof at trial. The production of only a scintilla of evidence will not suffice to oppose a motion for summary judgment. Anderson, 477 U.S. at 252.
Defendants request that we enter summary judgment in their favor because they argue that: (1) plaintiffs cannot identify any material misstatements, (2) plaintiffs cannot identify any special relationship or fiduciary duty other than during the Voting Trust period, (3) the alleged nondisclosures were immaterial as a matter of law, (4) plaintiffs are unable to prove "loss causation", and (5) the alleged inducement to breach a fiduciary duty caused no damages to the class.
I. Count I
Plaintiffs allege a violation of Section 10(b) of the Securities Exchange Act of 1934. The Act makes it unlawful for any person, in connection with the sale or purchase of a security, "to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading." 17 C.F.R. § 240.10b-5 (1979). Plaintiffs must prove that defendants made an omission of material fact, with scienter, in connection with the purchase or sale of securities, upon which plaintiffs relied, and that reliance proximately caused plaintiffs' injury. Stransky v. Cummins Engine Co., 51 F.3d 1329, 1331 (7th Cir. 1995). Furthermore, the plaintiffs must establish that the defendants had a duty to disclose the omitted information. Basic, Inc. v. Levinson, 485 U.S. 224, 239 (1988).
A. Duty
We must determine which of the alleged material omissions, as a matter of law, could be actionable. An omission is only actionable when the defendants owe the plaintiffs a duty. Basic, 485 U.S. at 239 n. 17. The duty arises from the common law that imposed a duty of disclosure when one party had information "that the other [party] is entitled to know because of a fiduciary or other similar relation of trust and confidence between them." Chiarella v. United States, 445 U.S. 222, 228 (1980). Plaintiffs argue that defendants owed them a fiduciary duty because of a general fiduciary duty that the corporation and its directors owe shareholders and because of the existence of the Voting Trust.
1. General Corporate Duty
Plaintiffs argue that the defendants had a duty to disclose all material information because they had a general fiduciary duty created by corporate law. We have already held that defendants were under no duty to disclose, other than during the period of the Voting Trust, unless they acted in a manner which triggered a duty, for example, using the information to engage in insider trading. Blanchard v. EdgeMark, Case No. 94 C 1890, 1999 WL 59994, *6-8 (N.D.Ill. Feb. 3, 1999).
Plaintiffs have provided only one case in which a general duty of disclosure was found. Kaufman v. Motorola, Inc., 1999 WL 688780 *8 (N.D.Ill. 1999). Kaufman does not state any authority for the proposition that a corporation and its directors have a general duty towards their stockholders. In fact, Kaufman cites Schlifke, which states that "even absent any misleading statements, an independent duty to disclose material facts may be triggered by a fiduciary-type relationship." Schlifke v. Seafirst Corp., 866 F.2d 935, 944 (7th Cir. 1989). Schlifke does not state that a Corporation and its directors have a fiduciary type relationship that always requires disclosure. Id.
This Court agrees with the analysis contained in one learned treatise, "[i]t is highly doubtful that Rule 10b-5 alone is sufficient to trigger a similar duty of disclosure . . . the language of the rule does not provide any basis for such an affirmative disclosure requirement. Mere nondisclosure, absent insider trading or some other collateral activity, will not establish a violation under Rule 10b-5." Cox, James D., Hazen, Thomas Lee O'Neal, F. Hodge, Corporations § 12.11 (2000). In addition to the statutorily mandated periodic filings, a corporation and its directors only have an affirmative duty to disclose when they have engaged in some other activity, such as insider trading or issuing an affirmatively misleading statement, which triggers a fuller disclosure. Absent some other fiduciary relationship, which only exists in the instant case during the Voting Trust period, a corporation and its shareholders do not have the kind of fiduciary relationship which requires total disclosure. Therefore, EdgeMark's complete silence about the merger negotiations cannot serve as a basis for liability under the Securities Exchange Act. Plaintiffs argue that defendants' breach of duty during the Voting Trust period means that the continuing omissions are actionable. Since we do not find a breach during the Voting Trust period, their argument is immaterial. Defendants' motion is granted and summary judgment is entered on all alleged omissions which occurred after December 31, 1992.
2. Other Arguments Attempting to Establish a Fiduciary Relationship
Plaintiffs, in the Fourth Amended Complaint, attempt to argue that they have a fiduciary relationship with defendants on grounds other than the Voting Trust. Plaintiffs cite several factors to support a general duty. First, they allege that a duty was created because class members invested in EdgeMark under the belief that the company would be sold soon after its formation. Second, they allege that a duty was created because class members lived in physical proximity to the Directors and were part of the same social community. Plaintiffs have provided no case law to support their theories and this Court has been unable to find any support for their argument. Furthermore, plaintiffs seem to have abandoned this manner of showing a duty because it is not mentioned in their response brief. Therefore, we find that defendants' duty is limited to the Voting Trust period.
3. The Voting Trust
When analyzing the motion to dismiss in the instant case we found that plaintiffs had alleged a sufficient fiduciary duty with regard to the relationship between the defendants and plaintiffs during the Voting Trust period. Blanchard, 1999 WL 59994 at *7. The Voting Trust was a pledge by the stockholders for the purpose of allowing EdgeMark to buy enough stock to meet the Federal Reserve capitalization requirements to become a multi-bank holding company. Neither party submitted evidence, in their Statements of Material Facts, on the Voting Trust other than to state that it expired by its terms on December 31, 1992. For the purpose of this Summary Judgment motion, we will analyze the issue in line with our earlier ruling on the motion to dismiss and assume that defendants owed a fiduciary duty to the members of the Voting Trust.
B. Materiality
Defendants argue that the activity during the existence of the Voting Trust could not have been material. In order for an omitted fact to be material, "there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the `total mix' of information made available." TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 449 (1976), applied to § 10(b) and Rule 10b-5 in Basic, Inc., 485 U.S. at 232. In Basic, the Supreme Court rejected the use of the bright line agreement-in-principle test in determining whether preliminary merger discussions were material. Id. The Court held that "[w]hether merger discussions in any particular case are material therefore depends on the facts", and directs a factfinder to consider "board resolutions, instructions to investment bankers, and actual negotiations between principals or their intermediaries." Id. at 239.
Before Basic, the Seventh Circuit had relied on the agreement-in-principle test to determine whether premerger activity is material. Jordon v. Duff and Phelps, Inc., 815 F.2d 429, 431 (7th Cir. 1987), Flamm v. Eberstadt, 814 F.2d 1169, 1174 (7th Cir. 1987). After Basic, the Seventh Circuit noted that determining materiality requires a delicate assessment of the inferences a reasonable shareholder would draw and that "materiality is necessarily a fact-specific inquiry, so `any approach that designates a single fact or occurrence determinative of . . . materiality must necessarily be over or underinclusive.'" Rowe v. Maremont Corp., 850 F.2d 1226, 1234 (7th Cir. 1988) (Quoting Basic, Inc. v. Levinson). When analyzing whether information concerning speculative or contingent events, such as a merger, are material depends "upon a balancing of both the indicated probability that the event will occur and the anticipated magnitude of the event in light of the totality of the company activity." Basic, 485 U.S. at 238. We will analyze materiality according to the specific factual allegations involved in this case.
We are mindful of the Supreme Court's often repeated warning that we should be careful "not to set too low a standard of materiality" because "a minimal standard might bring an overabundance of information within its reach, and lead management `simply to bury the shareholders in an avalanche of trivial information — a result that it hardly conducive to informed decisionmaking.'" Basic, 485 U.S. at 231 (Quoting TSC Industries, 426 U.S. at 448-449).
Plaintiffs argue that investors believed that EdgeMark had abandoned its plan to try to sell itself to another holding company. Specifically, Blanchard testified that the "tenor" of EdgeMark's reports suggested that "there was nothing dynamic or dramatic going on." Blanchard testified that he sold his stock because of that perception.
The plaintiffs, including Blanchard, were not "reasonable investors" because they did not reasonably interpret defendants' communications. In our February 3, 1999, Memorandum we held that "defendants failure to disclose did not render other statements made by EdgeMark misleading." Blanchard, 1999 WL 59994, *5. We determined that the statements regarding EdgeMark's book value, earnings and the announcement of a promotion had nothing to do with the sale of EdgeMark, that no reasonable person could have concluded that EdgeMark had abandoned its efforts to find a buyer and that plaintiffs' interpretations of EdgeMark's statements were implausible. Id. Therefore, a reasonable investor, given the information available at the time, would have believed that EdgeMark was still attempting to find an appropriate buyer for the holding company. Further, as is uncontested in defendants' Statement of Material Facts, public corporations typically do not disclose possible merger transactions prior to the execution of a definitive merger agreement. Plaintiffs' expert, Martin Ferguson, searched for references to firms announcing the retention of an investment banker during 1992, 1993 and 1994. He found that only 23 out of 8,986 acquisitions during that period involved a disclosure of the retention of an investment banker. The activity during the voting trust was preliminary to hiring an investment banker. In that context, none of the three omissions are material.
The plaintiffs allege that the material omissions began on November 1, 1992. Only the alleged omissions between November 1, 1992, and December 31, 1992, are potentially actionable. During that time period plaintiffs, in their Fourth Amended Complaint, allege three omissions: (1) the November 1992 dinner between Bruning, Morvis and Olson regarding the retention of DLJ, (2) the November 5, 1992, "presentation" by DLJ of its qualifications, which included a generic brochure on DLJ and a proposed retention agreement, and (3) the plan disclosed to Harris Bank on December 2, 1992 to spin off Merchandise National Bank to shareholders and sell the remaining four banks by the end of 1993.
The failure to disclose the dinner involving Bruning, Morvis and Olson was not a material omission. It is undisputed that this dinner was a "cold call", that Bruning had never met Olson before, and that most of the dinner was spent discussing golf. Plaintiffs are no doubt correct that the contacts made during this dinner paved the way for the eventual retention of DLJ by EdgeMark. However, the fact that Bruning and Olson had dinner together could not have changed the mix of information available to a reasonable investor nor have been significant to a reasonable investor. Given our earlier holding that a reasonable investor would think that EdgeMark was still attempting to sell itself and that corporations do not usually disclose this type of information, knowledge of this meeting would have been meaningless. Plaintiffs do not dispute the fact that no agreement was reached and that the discussion at the meeting was generic in nature. Therefore, as a matter of law, defendants' failure to disclose the November dinner did not violate the Securities Exchange Act of 1934.
The information sent to Bruning by Olson also fails to rise to the level of materiality. Olson sent Bruning a letter, dated November 6, 1992, touting DLJ's generic qualities. The first enclosure was a generic DLJ booklet. Although the name "EdgeMark Financial Corporation" had been printed on the first and second pages, the booklet was not created specifically for EdgeMark and merely described DLJ's financial institutions group. The second enclosure was a sample proposed retention agreement. Although the inclusion of the sample letter suggests that the contact was of some significance, several factors undermine that conclusion. The body of Olson's cover letter emphasizes that the engagement letter is a draft included at Bruning's suggestion. There is no dispute that the cover letter and enclosures represent Olson's attempt to persuade EdgeMark to hire DLJ. Therefore, the letter does not prove that Bruning had already decided to retain DLJ. In fact, EdgeMark did not retain DLJ until six months later, in May of 1993. In hindsight, it seems that the letter could have been material. However, given the information at time, the letter was merely an attempt by Olson to sell EdgeMark on the qualities of DLJ. Knowledge of the letter could not have altered the mix of information available to a reasonable investor. The failure to disclose the letter and enclosures, as a matter of law, was not material.
The third and final alleged omission during the relevant period is the meeting between Bruning and Harris Bank on December 2, 1992. Since only the first of the two meetings between EdgeMark and the Harris Bank occurred during the existence of the Voting Trust, only the alleged omission of reporting the first meeting is potentially actionable. At the meeting, Bruning announced his eventual goal of spinning off the Merchandise National Bank to shareholders and selling the remaining four banks by the end of 1993. There is no evidence that anyone else on the Board agreed to this plan. The unique facts of this case show that individuals related to EdgeMark were constantly generating ideas for selling the corporation. As we noted earlier, the idea of selling the five banks to a larger bank holding company was the reason that EdgeMark was formed. The fact that the plan advocated by Bruning at these meetings never came to fruition, or even serious consideration by the Board, shows the kind of atmosphere which prevailed at EdgeMark at that time. In that atmosphere of attempting to sell EdgeMark, this one plan advanced by Bruning, that was never implemented and never voted on by the Board, cannot serve as the basis of a material omission suit. This information would not, as a matter of law, altered the mix of information available to a reasonable investor at the time.
Plaintiffs knew that EdgeMark was attempting to sell itself to a larger holding company. Further, corporations virtually never disclose the type of initial contacts plaintiffs allege. All three of the omissions during the Voting Trust period represented very early steps in effectuating a goal that a reasonable investor would have known that the defendants were pursuing. The defendants never even spoke directly with another corporation during the period, they were speaking to a broker as a first step before more extensive negotiations. As a matter of law, omissions of this nature cannot be actionable because to allow plaintiffs to maintain a suit on the basis of these omissions would bring about the avalanche of trivial information that the Supreme Court has warned us to avoid. Directors would have to report any social meal at which an item of business was discussed, corporations would have to report every solicitation received by any individual connected with the business of mergers and corporations would have to publically report every idea advanced by a director. Not only would the quality of this information be of no use to a reasonable investor, its disclosure would drown out all potentially useful and appropriate public disclosures. Therefore, we find, as a matter of law, that the alleged omissions which occurred during the period in which the defendants owed a duty to the class were not material. We grant defendants motion and enter summary judgment on Count One of the Fourth Amended Complaint.
II. Counts II, III and IV
In the Fourth Amended Complaint, plaintiffs allege three state law causes of action. They allege common law fraud, breach of fiduciary duty and knowing inducement of breach of fiduciary duty. Because there are no surviving federal claims in this case, we decline to exercise supplemental jurisdiction over the remaining state law claims contained in these Counts. See, e.g., Centres, Inc. v. Town of Brookfield, Wisc., 148 F.3d 699, 704 (7th Cir. 1998), Kennedy v. Schoenberg, Fisher Newman, Ltd., 140 F.3d 716, 727 (7th Cir. 1998). Therefore, we dismiss Counts II, III and IV without prejudice.
CONCLUSION
Defendants' motion for summary judgment is granted in part. We enter judgment in favor of the defendants on Count I. Because the remaining claims are all issues of state law, we decline to exercise supplemental jurisdiction and dismiss Counts II, III and IV. The remaining motions are all denied as moot. This case is terminated.
It is so ordered.