Kahn v. Ordonez et al

Filing 71

ORDER Denying 58 , 64 Motion for Leave to File Motion for Reconsideration; Denying 68 Motion for Leave to File Notice of Supplemental Record. Signed by Judge Edward J. Davila on 5/25/2011 (ejdlc1, COURT STAFF) (Filed on 5/25/2011) Modified text on 5/25/2011 (ecg, COURT STAFF).

1
2
3
4
5
6
7

IN THE UNITED STATES DISTRICT COURT

8

FOR THE NORTHERN DISTRICT OF CALIFORNIA

9

SAN JOSE DIVISION

11
For the Northern District of California

United States District Court

10

NO. 5:10-cv-02935 EJD
IN RE CELERA CORP. DERIVATIVE
LITIGATION

ORDER DENYING PLAINTIFFS’
MOTION FOR LEAVE TO FILE MOTION
FOR RECONSIDERATION;
DENYING PLAINTIFFS’ MOTION FOR
LEAVE TO FILE NOTICE OF
SUPPLEMENTAL RECORD

12
13
14
15

/

16
I.

INTRODUCTION

17
Presently before the Court are two matters: Plaintiffs’ Motion for Leave to File a Motion for
18
Reconsideration of the Court’s Order filed April 14, 2011 (Docket Item Nos. 58, 64) and Plaintiffs’
19
Motion for Leave to File Notice of Supplemental Record (Docket Item No. 68). Through the first
20
motion, Plaintiffs request reconsideration of the Order Granting in Part and Denying in Part their
21
prior Motion for Leave to Amend the Consolidated Shareholder Derivative Complaint (Docket Item
22
No. 56, hereafter the “Order”) on the grounds that (1) the class action claims Plaintiffs sought to
23
introduce were “separate, distinct and new claims” and (2) the class action claims were the subject
24
of litigation in other venues. See Order at 4:19-5:5. In the second motion, Plaintiffs seek to
25
supplement their reconsideration request with subsequently obtained information. Defendants
26
27
28

Case No. 5:10-cv-02935 EJD
ORDER DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION;
DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE NOTICE OF SUPPLEMENTAL RECORD (EJDLC1)

1

oppose both requests in written opposition (Docket Item Nos. 59, 65, 69). Due to the relation

2

between the two motions, they are considered together for the purposes of this order. For the

3

reasons explained below, the motions will be denied.1
II.

4
5
6

Civil Local Rule 7-9(a) provides the mechanism by which a party may obtain reconsideration
of a prior order:
Before the entry of a judgment adjudicating all of the claims and the
rights and liabilities of all the parties in the case, any party may make
a motion before a Judge requesting that the Judge grant the party leave
to file a motion for reconsideration of any interlocutory order made by
that Judge on any ground set forth in Civil L.R. 7-9(b). No party may
notice a motion for reconsideration without first obtaining leave of
Court to file the motion.

7
8
9

For the Northern District of California

United States District Court

10
11
12

DISCUSSION

Within the motion described in Rule 7-9(a), the moving party must make a specific showing
supporting one of the following bases:

13
(1)
14
15
16
17

(2)

18

(3)

19
20

At the time of the filing the motion for leave, a material
difference in fact or law exists from that which was presented
to the Court before entry of the interlocutory order for which
reconsideration is sought. The party also must show that in the
exercise of reasonable diligence the party applying for
reconsideration did not know such fact or law at the time of the
interlocutory order; or
The emergence of new material facts or a change of law
occurring after the time of such order; or
A manifest failure by the Court to consider material facts or
dispositive legal arguments which were presented to the Court
before such interlocutory order. Civ. L.R. 7-9(b).

A motion for leave to file a motion for reconsideration may not repeat any oral or

21

written argument previously made with respect to the interlocutory order that the party now seeks to

22

have reconsidered. Civ. L.R. 7-9(c). “A party who violates this restriction shall be subject to

23

appropriate sanctions.” Id.

24
25
1

26
27
28

Although this Court did not issue the April 14th Order, it may nonetheless determine the
instant motions. See Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284 (5th Cir. 1993).
Case No. 5:10-cv-02935 EJD
ORDER DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION;
DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE NOTICE OF SUPPLEMENTAL RECORD (EJDLC1)

1

In the Order, the Court provided two reasons for denying Plaintiffs' request to assert

2

additional class action claims. The Court first determined the additional claims proposed by

3

Plaintiffs relied on facts distinct from those underlying the original derivative claims. See Order at

4

4:11-26. Indeed, Plaintiffs’ initial claims alleged only breach of fiduciary duty and unjust

5

enrichment against the Defendants. Id. In contrast, the proposed class claims challenged a

6

subsequently contemplated merger between Nominal Defendant Celera and Quest Diagnostics, Inc.

7

Id. Accordingly, the Court found the relationship between the original claims and the proposed class

8

claims was “tangential” and “unrelated to the facts as alleged in the Original Consolidated

9

Complaint.” Id. As a second ground, the Court found the proposed class claims were the subject of
separate litigation, particularly that before the Delaware Chancery Court. Id. at 4:26-5:5. That

11
For the Northern District of California

United States District Court

10

litigation was proceeding on an expedited schedule. Id.

12

Here, Plaintiffs believe reconsideration is warranted because the Delaware action settled only

13

days after the Court issued the Order. They argue this development represents a “new material fact”

14

as referenced by Local Rule 7-9(b). Having reviewed this matter, however, the Court disagrees.

15

First, and most importantly, Plaintiffs overlook the totality of the Order. As stated above, the Court

16

precluded Plaintiffs from introducing the class action claims on two alternate grounds, both of

17

which provided a sufficient basis to deny Plaintiff’s request to amend in their own right. Resolution

18

of the Delaware action does not nullify the Court’s primary determination that the class action

19

claims are unrelated to the original claims. That finding still remains true. As such, the Delaware

20

settlement is not “material” for the purposes of reconsideration.

21

Additionally, neither settlement of the Delaware action nor the terms of such settlement are

22

“new” facts. In the Order, the Court recognized the Delaware action would soon come to an end.

23

Indeed, the Court referenced the expedited litigation schedule imposed by the Delaware Chancery

24

Court and knew it would likely cause the Delaware action to resolve before this case. Moreover, in

25

noting the existence of this other litigation, the Court must have considered the possibility of a

26
27
28

3
Case No. 5:10-cv-02935 EJD
ORDER DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION;
DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE NOTICE OF SUPPLEMENTAL RECORD (EJDLC1)

1

resolution either unfavorable or objectionable to Plaintiffs. Thus, while the Court did not explicitly

2

account for exactly when or exactly how the Delaware action would conclude in the Order, these

3

items are nonetheless implicit in the Court’s reasoning. They do not require reconsideration.

4

Plaintiffs’ other arguments are equally unavailing. In denying the instant request, the Court

5

is not preventing Celera shareholders from litigating their class claims. The shareholders had an

6

opportunity to do so before the Delaware Chancery Court, and as Defendants correctly indicate,

7

Plaintiffs may still object to the terms of the Delaware settlement. Moreover, Plaintiffs’ attempt to

8

equate settlement of claims with an “abandonment” of claims mischaracterizes the litigation process.

9

Under Plaintiffs’ reasoning, settlement of any litigation would result in an abandonment of the case.

11
For the Northern District of California

United States District Court

10

Such reasoning cannot be accepted.
In sum, the Court finds Plaintiffs have not demonstrated that the Delaware settlement

12

represents a new material fact. For this reason, there is no basis for reconsideration.

13

III.

14

ORDER

Plaintiff’s Motion for Leave to File a Motion for Reconsideration of the Order filed April 14,

15

2011, is DENIED. Plaintiff’s Motion for Leave to File Notice of Supplemental Record is also

16

DENIED.

17
18
Dated: May 25, 2011
19

EDWARD J. DAVILA
United States District Judge

20
21
22
23
24
25
26
27
28

4
Case No. 5:10-cv-02935 EJD
ORDER DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION;
DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE NOTICE OF SUPPLEMENTAL RECORD (EJDLC1)

1

THIS IS TO CERTIFY THAT COPIES OF THIS ORDER HAVE BEEN DELIVERED TO:

2

George Carlos Aguilar [e-mail]
Jordan Eth [e-mail]
Mark C. Gardy [e-mail]
Judson Earle Lobdell [e-mail]
James S. Notis [e-mail]
Jennifer Sarnelli [e-mail]
Marc M. Umeda [e-mail]

3
4
5
6

Dated: May 25, 2011

Richard W. Wieking, Clerk

7
8
9

By:

/s/ EJD Chambers
Elizabeth Garcia
Courtroom Deputy

11
For the Northern District of California

United States District Court

10

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

5
Case No. 5:10-cv-02935 EJD
ORDER DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION;
DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE NOTICE OF SUPPLEMENTAL RECORD (EJDLC1)