United States District Court, S.D. California
September 20, 2005.
IN RE PEREGRINE SYSTEMS, INC. SECURITIES LITIGATION. This Document Relates to: All Actions.
The opinion of the court was delivered by: ROGER BENITEZ, District Judge
SUR-REPLY OF DEFENDANT ARTHUR ANDERSEN LLP IN OPPOSITION TO
MOTION OF PLAINTIFFS THE LORAN GROUP FOR ENTRY OF JUDGMENT
PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 54(b) Under Submission By Order Entered September 9, 2005.
On or about May 5, 2005, Plaintiffs The Loran Group filed a
motion under Federal Rules of Civil Procedure, Rule 54(b), asking
the Court to enter separate judgments on two earlier orders of
the Court (the "Orders") that had dismissed certain claims in
this action against certain defendants (the "54(b) Motion"). The
54(b) Motion was set for hearing on September 19, 2005. Defendant
Arthur Andersen LLP ("Andersen") filed Opposition to the 54(b)
Motion on July 8, 2005, contending that the Orders were not final
as to any claim in the operative Consolidated First Amended
Complaint. On August 11, 2005, Plaintiffs filed a Reply to
Andersen's Opposition, contending that the Orders were final,
relying heavily on, and quoting from, the United States Supreme
Court's decision in Gillespie v. United States Steel Corp.,
379 U.S. 148
(1964). Plaintiffs' Reply Memorandum at page 1, line 18
to page 2, line 11; page 4, line 25 to page 5, line 1; and page
5, line 13 to page 6, line 7. In Gillespie, the Supreme Court
agreed to hear an appeal from a lower court decision that
arguably did not meet the strict requirements of finality
ordinarily applied in the federal courts. Plaintiffs argued that
the more lenient standard of Gillespie should be applied in
this case to allow an immediate appeal under Rule 54(b). The
Gillespie case was not cited anywhere in Plaintiffs' original
The Court has now taken the hearing on Plaintiffs' 54(b) Motion
off calendar and has taken the Rule 54(b) Motion under
submission. Because Andersen has not otherwise had an opportunity
to comment on Plaintiffs' reliance on the Gillespie case,
Andersen lodges this Sur-Reply to call to the Court's attention
that Gillespie has in fact been severely limited by both the
United States Supreme Court and by the Ninth Circuit.
The Supreme Court has expressly stated that the more lenient
standard of finality applied in Gillespie can be justified only
because "an unsettled issue of national significance" was at
stake. Coopers & Lybrand v. Livesay, 437 U.S. 463, 477 n. 30
(1978). In the words of the Supreme Court, "If Gillespie were
extended beyond the unique facts of that case, § 1291 would be
stripped of all significance." Id. (emphasis added). Similarly, the Ninth Circuit has declined to apply Gillespie
routinely when determining whether an order is final, instead
following the Supreme Court's ruling that Gillespie is limited
to cases involving unsettled issues of national significance.
All Alaskan Seafoods, Inc. v. M/V Sea Producer, 882 F.2d 425,
428 n. 2 (9th Cir. 1989). In All Alaskan Seafoods the Ninth
Circuit wrote, "[T]he exception to the finality requirement
carved out by Gillespie is a narrow one, applicable only `to
orders involving unsettled issues of national importance where
immediate review would serve the purpose of judicial economy
underlying the finality rule . . .'" Id. (emphasis added). I declare that I am employed in the office of a member of the
bar of this court at whose direction the service was made.
I declare under penalty of perjury under the laws of the State
of California that the above is true and correct.
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