Imagine this: you are in-house counsel for a Fortune 500 company and you have just authorized a $100 million class action settlement. You tell the board of directors that the settlement will bring the certainty and finality that class settlements always tend to bring. The court approves the settlement without hesitation.

One year later, certain members of the class file an arbitration claim, seemingly arising out of the very same course of conduct. “Huh,” you might ask? You assume the claim will be dismissed but it is not. Your company is now subject to a potential flood of new claims that you thought were settled for a very large sum of money.

That is not a good day. Yet the recent case of Ameriprise Financial Services, Inc. v. Beland makes it slightly more likely it could actually happen. In a decision that could wreak havoc with the finality companies hope to achieve with class settlements, the 2nd Circuit recently held that investors could still pursue arbitration claims against Ameriprise Financial, despite the plaintiffs’ membership in a $100 million class settlement.

Plaintiffs (the Belands) invested the principal of their trust with Ameriprise under instructions to invest conservatively. From 1995 until 2009, Ameriprise, allegedly, disregarded this order in favor of riskier investments such as high-yield junk bonds, preferred mutual funds and speculative tech stocks. When a group of similarly situated plaintiffs brought a consolidated class action for similar alleged conduct, the Belands were part of that putative class. The class claimed that, from 1999 to 2006, Ameriprise’s employees mismanaged their accounts, gave pre-determined investment recommendations, pushed clients to specific mutual funds that reaped millions in kickbacks and never gave fair, individualized investment advice.

In July of 2007, the class reached a proposed $100 million settlement, and the Belands never opted out. The court approved the class settlement, releasing all claims against Ameriprise arising out of the class allegations. Ameriprise paid handsomely, but it was getting the finality and certainty that settlements of this type can offer. Or so it seemed.

One year later, the Belands filed a FINRA arbitration complaint against Ameriprise, asserting “suitability” claims for breach of fiduciary duty, breach of contract, common law fraud and negligent misrepresentation. Not surprisingly, Ameriprise asked the district court to enforce the class settlement and the district court agreed, holding that the Belands, as prior class members, released all of their claims against Ameriprise by failing to opt out of the class settlement.

On appeal, the 2nd Circuit acknowledged that the class settlement released Ameriprise from its agreement to arbitrate all claims covered by that settlement. Therefore, the case turned on a single question: whether any of the Belands’ FINRA claims fell outside the class settlement and therefore were subject to arbitration?

The court first affirmed the district court’s authority to enjoin the private arbitration, insofar as it dealt with claims covered by the settlement. The court then agreed that the settlement clearly released some of the Belands claims, specifically those involving investments in preferred mutual funds. But some of the suitability claims did not “entirely overlap” with the claims released by the class settlement because the settlement expressly excluded from its release those suitability claims that did not arise out of the common course of conduct alleged (or that could have been alleged) by the class.

In finding that some of the Belands’ claims did not overlap, the court compared the course of conduct alleged by the class to the course of conduct alleged by the Belands. The court determined that the class alleged that Ameriprise’s course of conduct was “steering clients into Proprietary or Shelf Space funds through managed programs,” and that the class included investors who were “sold financial plans and or advice that was standardized recommendations rather than individualized advice.” By contrast, the Belands’ alleged that “Ameriprise mismanaged [the Belands’] trusts contrary to their instructions and investment goals.” The court found these allegations sufficiently distinct to allow the arbitration claims to proceed.

This was not an obvious conclusion. The court viewed the conduct alleged by the class narrowly, and the Belands’ alleged conduct broadly, and that made all the difference. But the court just as easily could have found that the class action was based on Ameriprise’s mismanagement of clients’ money and disregard of clients’ instructions, which is, in substance, what the Belands alleged in their FINRA complaint.

It remains to be seen whether the decision actually threatens the efficiency and finality of class settlements, or whether this was a one-off case distinguishable on its facts. For in-house counsel and the companies they represent, let’s hope for the latter.