The opinion of the court was delivered by: Lucy H. Koh United States District Judge
For the Northern District of California United States District Court
ORDER DENYING MOTION FOR
LEAVE TO FILE MOTION FOR
RECONSIDERATION AND DENYING
MOTION TO CERTIFY THE JANUARY 5, 2011 ORDER FOR INTERLOCUTORY APPEAL
Defendants have jointly moved for leave to file a motion for
reconsideration with respect to
the portion of the Court's January 5, 2011 Order related to the
affirmative defense of "loss 20 causation." See Dkt. #85. Pursuant to
the Local Rules, the motion for leave to file a motion for 21
reconsideration was not noticed for a hearing. See Civ. L.R. 7-9(d).
In the event that the Court 22 denies the motion for reconsideration,
Defendants also filed a separate motion requesting that the
Court certify the January 5, 2011 Order for interlocutory appeal. See
Dkt. #86. The motion for 24 interlocutory appeal is noticed for a
hearing on July 28, 2011. The Court deems both motions 25 appropriate
for resolution without oral argument, and vacates the July 28, 2011
See Civ. L.R. 7-1(b). As explained below, the Court DENIES both motions.
by the U.S. District Court for the Southern District of New York dismissing Section 11 and Section 3 Securities Act claims at the motion to dismiss stage for failure to establish loss causation. See 4 (S.D.N.Y. Mar. 31, 2011). The Court denies the motion for leave to file a motion for 6 reconsideration because Defendants have not shown "the emergence of new material facts or a 7 change of law" occurring after the January 5, 2011 Order, or shown "[a] manifest failure by the Defendants argue that their motion for leave is triggered by a recent out-of-Circuit decision
In re State Street Bank & Trust Co. Fixed Income Funds Invs. Litig., 2011 U.S. Dist. LEXIS 35857 Court to consider material facts or dispositive legal arguments" that make reconsideration 9 necessary or appropriate. See Civil. L.R. 7-9(b)(2)-(3). In the Ninth Circuit, loss causation, as it 10 was at the time of the January 5, 2011 Order, is not an element of a Section 11 or Section 12 Cir. 2005) ("A plaintiff is not required to show 'that a misrepresentation was the sole reason for the 14 investment's decline in value' in order to establish loss causation."). At this point, it is not clear to 15 the Court solely from the face of the Complaint that Plaintiffs could not establish loss causation.
Feb. 18, 2011) ("A court has substantial discretion in deciding whether to grant a party's motion 19 for certification."). The Court may only certify an order for immediate appeal upon finding: (1) the 20 existence of a controlling question of law, (2) substantial grounds for difference of opinion, and (3) 21 that an immediate appeal would materially advance the ultimate termination of the litigation. See 1982). Defendants have not established the exceptional circumstances necessary to "invoke the 24 narrow exception to the final judgment rule embodied in 28 U.S.C. § 1292(b)." See Couch v. 25
Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010). Defendants' affirmative defense of the absence 26 of loss causation is not a pure question of law, and is, in any event, not evident from the face of 27
Securities Act claim, but Defendants may assert lack of loss causation as an affirmative defense.
See 15 U.S.C. 77k(e); see also See Sparling v. Daou (In re Daou Sys.),411 F.3d 1006, 1025 (9th 13
Similarly, the Court declines to certify the January 5, 2011 Order for immediate appeal.
See Matsunoki Group, Inc. v. Timberwork Or., Inc., 2011 U.S. Dist. LEXIS 33178, *7 (N.D. Cal. 1
28 U.S.C. §1292(b); see also In re Cement Antitrust Litigation, 673 F.2d 1020, 1026 (9th Cir.
Plaintiffs' Complaint. Moreover, "an interlocutory appeal prior to any discovery would deprive the appellate court of a factual record that likely would aid its consideration of the legal questions 2 presented." See Lenz v. Universal Music Corp., 2008 U.S. Dist. LEXIS 91890, *7 (N.D. Cal. Oct. 28, 2008). In these circumstances, development of the factual record will likely be helpful in 4 determining loss causation, or the absence thereof, and will thus be critical to this Court's (and, in 5 the event of ...