Dobina v. Weatherford International Ltd. et al

Filing 45

OPINION AND ORDER: The June 27 and 28, 2011 motions for reconsideration of the June 27, 2011 Order are denied. (Signed by Judge Denise L. Cote on 7/6/2011) (jfe)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------X
:
In Re WEATHERFORD INTERNATIONAL
:
SECURITIES LITIGATION
:
:
------------------------------------ X

11 Civ. 1646 (DLC)
OPINION & ORDER

Appearances:
For Lead Plaintiff the American Federation of Musicians and
Employers’ Pension Fund:
Ramzi Abadou
Eli R. Greenstein
Stacey M. Kaplan
Erik D. Peterson
Kessler Topaz Meltzer & Check, LLP
580 California Street, Suite 1750
San Francisco, CA 94104
Sean M. Handler
Darren J. Check
Naumon A. Amjed
Ryan T. Egnan
Kessler Topaz Meltzer & Check, LLP
280 King of Prussia Road
Radnor, PA 19087
Curtis V. Trinko
16 West 46th St., 7th Floor
New York, NY 10036
For Fulton County Employees’ Retirement Systems, City of Grand
Rapids General Retirement System, City of Grand Rapids Police &
Fire Retirement System and the Fort Worth Employees’ Retirement
Fund:
Mary K. Blasy
Hal Cunningham
Scott+Scott LLP
707 Broadway, 10th Floor
San Diego, CA 92101
Beth Kaswan
Donald Broggi
Joseph P. Guglielmo

Scott+Scott LLP
500 Fifth Ave., 40th Floor
New York, NY 10110
For Pension Trust Fund for Operating Engineers:
David A. Rosenfeld
Samuel H. Rudman
Robbins Geller Rudman & Dowd LLP
58 South Service Road, Suite 200
Melville, NY 11747
DENISE COTE, District Judge:
At a conference on June 24, 2011, the American Federation
of Musicians and Employers’ Pension Fund (“AFME”) was selected
as Lead Plaintiff to represent a proposed shareholder class
suing Weatherford International Limited (“Weatherford”).

Two

competing applicants for lead plaintiff promptly filed motions
for reconsideration.

Neither motion points to any matter

overlooked by the Court or to any issue that was not available
to be addressed at the June 24 conference.

These highly unusual

motions by disgruntled applicants for lead plaintiff appointment
are denied.

BACKGROUND
On March 9, 2011, plaintiff Mike Dobina filed a class
action lawsuit on behalf of all purchasers of securities between
April 25, 2007, and March 1, 2011, inclusive (the “Class
Period”).

The Class Period was defined by the announcement made

by Weatherford on March 2, 2011.

The complaint alleges

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violations of §§ 10(b) and 20(a) of the Securities Exchange Act
of 1934, 15 U.S.C. § 78a et seq.

As required by § 78u-

4(a)(3)(A) of the Private Securities Litigation Reform Act, on
March 10, Dobina’s attorneys published notice of the pendency of
the action.

By Order dated March 16, the Court set a schedule

for the briefing of the applications for appointment of a lead
plaintiff and set a conference for June 24.

On May 9, two

applicants in addition to AFME sought appointment as lead
plaintiff: a group composed of Fulton County Employees’
Retirement System, City of Grand Rapids General Retirement
System, City of Grand Rapids Police & Fire Retirement System and
the Fort Worth Employees’ Retirement Fund (collectively, the
“Public Retirement Systems”); and the Pension Trust Fund for
Operating Engineers (the “Operating Engineers”).
At the June 24 Conference, AFME was selected to serve as
lead plaintiff.

AFME sustained the “largest loss” from its

trading during the Class Period and had “some” retained shares
at the end of the Class Period.

During the extended discussion

at the June 24 Conference of the issues raised by the
applicants’ submissions, the Court pointed out both that for
almost a two year period ending in the Fall of 2010
Weatherford’s stock traded below the point to which it fell
after the March 2, 2011 announcement, and that this fact
complicated a loss calculation premised on the last-in-first-out

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or LIFO method, which was the method that each of the parties
had used in calculating their losses.
AFME’s appointment was formalized in an Order of June 27
(the “June 27 Order”).

On June 27 and June 28, the Public

Retirement Systems and the Operating Engineers’ respectively
filed motions for reconsideration of the June 27 Order.

These

motions became fully submitted on July 5.

DISCUSSION
The standard for reconsideration is strict.

“Generally,

motions for reconsideration are not granted unless the moving
party can point to controlling decisions or data that the court
overlooked -- matters, in other words, that might reasonably be
expected to alter the conclusion reached by the court.”

In re

BDC 56 LLC, 330 F.3d 111, 123 (2d Cir. 2003) (citation omitted).
“[A] motion to reconsider should not be granted where the moving
party seeks solely to relitigate an issue already decided.”
Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995).
Likewise, a party moving for reconsideration may not “advance
new facts, issues, or arguments not previously presented to the
Court.”

Nat’l Union Fire Ins. Co. of Pittsburgh v. Stroh Cos.,

Inc., 265 F.3d 97, 115 (2d Cir. 2001) (citation omitted).
decision to grant or deny the motion for reconsideration is

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The

within “the sound discretion of the district court.”

Aczel v.

Labonia, 584 F.3d 52, 61 (2d Cir. 2009) (citation omitted).
The Public Retirement Systems and the Operating Engineers
(the “Movants”) principally argue that at the June 24 Conference
AFME misled the Court by stating that it “retained” 33,400
shares at the end of the Class Period when, using the LIFO
accounting method, none of the shares AFME held on March 1, 2011
were purchased during the class period.

This argument is

rejected for several reasons.
First and foremost, these motions for reconsideration do
not present any issues that were unavailable for the parties to
discuss at the June 24 Conference or that were overlooked by the
Court.

The parties having made extensive arguments before and

during the June 24 Conference, and the Court having explained in
detail its reasons for selecting AFME, the Movants have utterly
failed to meet the burden that pertains to motions for
reconsideration.
Moreover, the factual premise underlying the motions for
reconsideration is flawed.

Regardless of whether the first-in-

first-out (“FIFO”) or the LIFO method is employed, at the end of
the Class Period, AFME retained shares that were purchased
during the period.
As significantly, the Movants mistakenly assume that LIFO
is the only appropriate standard for calculating the number of

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shares AFME held at the end of the class period.

While LIFO may

often be the most appropriate method for calculating loss,
selecting the accounting method which will be most advantageous
to a class is a context-specific determination.

As the Court

observed at the June 24 Conference, because of the stock price
movements toward the end of the Class Period, LIFO may not be
the most suitable measurement method in this case.

In fact, the

Court noted that “it may be hard to prove out-of-pocket losses
for purchases” made during roughly a two-year period near the
end of the Class Period.
Finally, using the measure that each of the applicants for
lead plaintiff stressed in their motions for appointment -– a
loss calculation premised upon trading during the Class Period – it is undisputed that AFME is the single entity with the
largest such loss.

The Court appointed AFME as Lead Plaintiff

based on an examination of the strengths and weaknesses of each
of the applicants for the appointment, and a nuanced assessment
of which applicant would be best able to represent the proposed
class.

The motions for reconsideration present no occasion for

reconsidering the merits of that judgment.
The Public Retirement Systems make a second argument for
their appointment as lead plaintiff.

They contend AFME will be

unable to represent the class at an upcoming hearing before the
Judicial Panel on Multi-District Litigation (the “MDL Panel”) on

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July 28, 2011 since AFME has not yet filed papers before the MDL
Panel. 1

, this is not an argument properly

through a motion for recons

ion.

ed

This issue was presented

at and addressed at the June 24 Conference.

In any event, it is

unnecessary to engage with the

ies' debate over the MDL

Panel procedures.

this motion for

Prior to fil

, the Public Ret

recons

Systems itself predicted

that the MDL proceedings would become moot once a 1
was chosen.

aintiff

on the parties' submissions in connection

with this motion for reconsideration this prediction seems even
more likely to prove true.

CONCLUSION
The June 27 and 28
June 27, 2011

1

2011 motions

reconsideration of the

are denied.

SO ORDERED:
Dated:

New
, New York
July 6, 2011

COTE
District Judge

The MDL Panel is
to consider
the abovecaptioned case should
consolidated with a related securities
fraud class action
the same defendants, Kanchanapoom v.
Weatherford, et al., 11 Civ. 01895-JFW (PJWx) (C.D. CaL).
It
appears, however,
the California action
11 be voluntarily
smissed before July 28, 2011.
1

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