McCauley et al v. Najafi et al

Filing 84

*ORDER: Plaintiffs' Motion for Reconsideration 78 is denied. See order for details. Signed by Judge Steven P Logan on 4/30/2020. (LMR) *Modified document from Standard to Written Opinion on 5/1/2020 (EJA).

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Bill McCauley, et al.,

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Plaintiffs,

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vs.

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Jahm J. Najafi, et al.,

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Defendants.

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No. CV-16-03461-PHX-SPL
ORDER

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On March 25, 2020, this Court granted in part Defendants’ Motion to Dismiss.

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(Docs. 63, 73) Specifically, the Court dismissed with prejudice Count Three of Plaintiffs’

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Third Amended Complaint (Doc. 62), which pled a claim for “control person” liability

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under Arizona Revised Statute (“A.R.S.”) § 44-1999(B). (Doc. 73 at 13) Plaintiffs have

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filed a Motion for Reconsideration (the “Motion”) pursuant to Local Rule 7.2(g), which

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the Court construes as a Motion to Alter or Amend the Judgment pursuant to Federal Rule

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of Civil Procedure (“Rule”) 59(e).1 (Doc. 78) The Court ordered Defendants to file a

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response, and the response was timely filed on April 21, 2020. (Docs. 79, 80)
Reconsideration is appropriate only in rare circumstances. Kona Enters., Inc. v.

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A motion for reconsideration can be brought before the Court under either Rule
59(e) or 60(b). Such a motion is treated as a motion to alter or amend the judgment
pursuant to Rule 59(e) if it is brought within 28 days after entry of a final order or judgment.
Otherwise, it is treated as a Rule 60(b) motion for relief from judgment or order. See Am.
Ironworks & Erectors, Inc. v. N. Am. Const. Corp., 248 F.3d 892, 898-99 (9th Cir. 2001).
Because the Motion was filed within 30 days of the final order, this Court will treat the
motion as a Rule 59(e) motion to alter or amend the judgment.

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Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000). The Court may grant a motion under

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Rule 59(e) if the district court is presented with newly discovered evidence, committed

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clear error, the initial decision was manifestly unjust, or there is an intervening change in

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controlling law. Sch. Dist. No. 1J, Multnomah Cty., Or. V. ACandS, Inc., 5 F.3d 1255,

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1263 (9th Cir. 1993).

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Plaintiffs argue that the Court’s decision was manifest error because courts in other

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jurisdictions “have repeatedly held that joinder of a bankrupt issuer is not required to state

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a claim for control liability against the issuers’ officers and director.” (Doc. 78 at 2) In

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response, Defendants argue that this Court’s decision cannot be manifest error because

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Plaintiffs fail to cite to any controlling authority supporting their interpretation of A.R.S. §

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44-1999(B). (Doc. 80 at 3-4) Defendants maintain that, absent any controlling authority,

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Arizona rules of statutory construction require the plain language of the statute to control.

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(Doc. 80 at 5)

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Because Plaintiffs fail to cite any controlling law interpreting A.R.S. § 44-1999(B),

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the Court finds that the Motion does not satisfy the requirements of Rule 59(e). See E.

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Vanguard Forex, Ltd. v. Ariz. Corp. Comm’n, 79 P.3d 86, 97 (Ariz. Ct. App. 2003)

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(explaining that Arizona courts “may look to federal court decisions for interpretive

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guidance [on A.R.S. § 44-1999(B)], . . . but are not bound even by the United States

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Supreme Court’s interpretation of analogous federal securities laws.”). Accordingly,

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IT IS ORDERED that Plaintiffs’ Motion for Reconsideration (Doc. 78) is denied.

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Dated this 30th day of April, 2020.

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Honorable Steven P. Logan
United States District Judge

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