Abdo et al v. Fitzsimmons et al

Filing 185

ORDER by Judge Thomas S. Hixson denying (178) Motion for Leave to File in case 3:17-cv-00851-TSH; denying (179) Motion for Leave to File in case 3:17-cv-01232-TSH. (tshlc2S, COURT STAFF) (Filed on 8/3/2020)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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JOHN E. ABDO, et al.,
Plaintiffs,

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v.
MICHAEL FITZSIMMONS, et al.,
Defendants.

United States District Court
Northern District of California

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ORDER DENYING MOTION FOR
LEAVE TO FILE MOTION FOR
RECONSIDERATION
Abdo Dkt. No. 178,
Rising Tide Dkt No. 179

RISING TIDE I, LLC, et al.,

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Case No. 17-cv-00851-TSH

Plaintiffs,

Case No. 17-cv-01232-TSH

v.
MICHAEL FITZSIMMONS, et al.,
Defendants.

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On July 6, 2020, having reviewed the Parties’ competing proposals regarding the timing

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and scope of summary judgment briefing, the Court entered an Order Setting Summary Judgment

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Briefing Schedule and Referring Parties for a Settlement Conference (the “Briefing Order”). ECF

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No. 173 (Abdo)/169 (Rising Tide). The Court limited memoranda of law in support of motions

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for summary judgment to 50 pages per side, with all moving Defendants filing one combined brief

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and all moving Plaintiffs filing one combined brief. The Court limited memoranda of law in

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opposition to motions for summary judgment to 50 pages per side and replies in support of

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motions to 30 pages per side. The Court additionally ordered that, if Plaintiffs and Defendants are

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unable to agree on a joint statement of facts, all moving Defendants collectively and all moving

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Plaintiffs collectively should file a single statement of facts, controverting statement facts, and

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reply statement of facts.

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Defendant James C. Peters moves for leave to file a motion for reconsideration (the

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“Motion”) of the Court’s Briefing Order. ECF No. 178-1. Peters asserts as grounds for his

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Motion that he is uniquely situated among the Defendants because he was “not around when the

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vast majority of alleged violations and underlying events occurred.” Mot. at 2. He argues that

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therefore his set of facts are so different from the other Defendants that he “should be allowed to

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present his own case for summary judgment via his own motion focused on his unique set of facts,

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making the legal and factual arguments that are in his best interest.” Mot. at 2. He argues that he

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will be prejudiced if forced to file a pleading along with the other Defendants. He also points out

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that actual conflicts of interest exist between the Defendants, and that the firm originally
representing all Defendants has advised them to retain separate counsel and that most Defendants

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United States District Court
Northern District of California

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have done so. He asks that he be allowed to file a separate brief consistent with the Local Rules’

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page limitations.

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The Court will deny Peters’ motion. As Peters points out, the sole remaining claim against

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him is an alleged violation of the third clause of California Corporate Code § 25504. That clause

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imposes liability on every director or officer of a corporation who aids in fraudulently selling

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securities within California unless the director lacks “knowledge of or reasonable grounds to

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believe in the existence of the facts by reason of which the liability is alleged to exist.” Cal. Corp.

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Code § 25504. Peters intends to assert an affirmative defense and “show[] that he lacked

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‘knowledge of or reasonable grounds to believe’ during his 11th hour tenure at Delivery Agent.”

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Mot. at 3-4. Whether Peters can successfully raise that defense and show that he lacked the

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requisite knowledge essentially comes down to a question of fact and presumably requires no

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extensive legal argument—Peters was either there and knew or wasn’t and didn’t. Peters himself

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agrees that it “takes little space to state” the conclusion that he “had no reason to know of the facts

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giving rise to the alleged liability.” Reaching that conclusion will come down to facts, and

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Defendants are not limited in the number of material facts that they can assert in their statement of

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facts, controverting statement, or reply statement. Nor did the Court impose a limit on the amount

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of evidence the parties may submit and cite to in their statements of facts. Lastly, even though

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Peters may be in a unique position vis-à-vis the other Defendants, Defendants are obligated by the
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Court’s orders to prepare their memoranda cooperatively. Accordingly, Peters’ Motion is

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DENIED.

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IT IS SO ORDERED.
Dated: August 3, 2020

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THOMAS S. HIXSON
United States Magistrate Judge

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United States District Court
Northern District of California

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