U.S. Supreme Court decision supports Madison County class action dismissal

Steve Korris Jun. 2, 2006, 7:28am

Troy Bozarth

Justices of the United States Supreme Court have hastened the end of a proposed class action suit in Madison County.

Gary Manderscheid voluntarily dismissed a class action claim against Allstate Life Insurance May 18 after a Supreme Court decision strengthened Allstate's position.

Allstate attorney Troy Bozarth of Edwardsville argued in April that under a Supreme Court decision in Merrill Lynch vs. Dabit, federal law pre-empted class actions based on state law over securities trades.

According to Bozarth, the Supreme Court declared that it could not overstate the federal interest in the integrity and efficiency of the securities market.

Manderscheid sued Allstate Life in 2004, after learning he would have to wait 10 years for the guaranteed returns of a variable annuity.

James Rosemurgy of the Danis Law Firm in Clayton, Mo., signed the complaint.

Allstate removed the suit to U.S. District Court in East St. Louis, arguing that the claim arose under federal law.

U.S. District Judge David Herndon remanded the case to Madison County because Allstate failed to remove it within 30 days.

Bozarth last year asked Circuit Judge Phillip Kardis to dismiss, arguing again that U.S. securities law pre-empted the claim.

Kardis set a hearing but retired before the hearing date.

At a March 29 management conference Circuit Judge Don Weber gave Allstate 21 days to amend its motion to dismiss. He gave Manderscheid 30 days to respond.

Weber set a June 22 hearing on the motion to dismiss.

Bozarth filed an amended motion April 19 with a memorandum announcing the Supreme Court decision to Weber.

On May 18, as Rosemurgy's deadline to respond arrived, he moved to dismiss.

Weber signed an order dismissing the case May 23.

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