Gusinsky v. Barclays PLC et al

Filing 78

MEMORANDUM OPINION AND ORDER re: 75 MOTION for Reconsideration. For the foregoing reasons, Plaintiffs' motion for reconsideration is denied. The Clerk of the Court is directed to close this motion (Docket No. 75) and this case. (Signed by Judge Shira A. Scheindlin on 6/12/2013) (ja)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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VLADIMIR GUSINSKY, TRUSTEE, FOR THE
VLADIMIR GUSINSKY LIVING TRUST,
Individually and on Behalf of All Others
Similarly Situated,

MEMORANDUM

OPINION AND ORDER

Plaintiff,

12 Civ. 5329 (SAS)

v.
BARCLAYS PLC, et aI.,
Defendants.

x
SHIRA A. SCHEINDLIN, U.S.D.J.:
I.

INTRODUCTION

Plaintiffs bring this putative class action against Barclays PLC,
Barclays Bank PLC, and Barclays Capital Inc., (collectively, "Barclays"), and John
Varley, Robert Diamond, Christopher Lucas, and Marcus Agius ("Individual
Defendants" and, together with Barclays, "Defendants"). The putative class
consists of all persons and entities who purchased American Depositary Shares
("ADSs") of Barclays PLC between July 10,2007 and June 27,2012, inclusive,
and were allegedly damaged thereby. Plaintiffs assert violations of: (1) Section

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lOeb) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5
promulgated thereunder against all defendants; and (2) Section 20(a) of the
Exchange Act against the Individual Defendants.
On May 13,2013, I granted Defendants' motion to dismiss the
Second Amended Complaint ("SAC") in its entirety on the grounds that: (1)
Plaintiffs failed to allege that Barclays' generic statements about its business
practices were actionable misstatements; (2) Plaintiffs did not plausibly allege that
Barclays' contingent disclosures were materially misleading; and (3) assuming that
Barclays' LIBOR submissions were actionable misrepresentations, Plaintiffs did
not adequately allege that these statements, which occurred prior to 2009, caused
Plaintiffs' losses in 2012.1 Because I held that Plaintiffs did not adequately allege
a primary violation of Section 1O(b), I also dismissed the Section 20( a) claims for
control person liability.2 I denied leave to amend on the ground that amendment

See 5/13113 Opinion and Order ("MTD Op.") at 16-25 [Dkt. No. 73].
Because I dismissed on the grounds outlined above, I did not address Defendants'
claims that Plaintiffs failed to plead facts giving rise to a strong inference of
scienter and that many of the alleged misstatements are not actionable because they
are protected by the safe harbor provision in the Private Securities Litigation
Reform Act of 1995 ("PSLRA"), or the bespeaks caution doctrine. See
Defendants' Memorandum of Law in Support of Their Motion to Dismiss the SAC
at 2-3 [Dkt. No. 62]. Nor did I consider whether loss causation was established
with respect to the business practices statements or contingent disclosures.
2

See MTD Op. at 28.
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would be futile, particularly in light of the fact that Plaintiffs were placed on notice
of all the perceived deficiencies in their Complaint and given the opportunity to
amend, and still had not plausibly alleged that Defendants' fraud caused their
10sses. 3 Plaintiffs now move under Local Rule 6.3 for reconsideration of the
denial of leave to amend. 4 For the reasons set forth below, Plaintiffs' motion is
denied.

II.

LEGAL STANDARD

A.

Motion for Reconsideration
Motions for reconsideration are governed by Local Rule 6.3 and are

committed to the sound discretion of the district court. s A motion for
reconsideration is appropriate where '''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.",6 A motion
3

See id. at 29.

See Memorandum of Law in Support of Lead Plaintiffs' Motion for
Partial Reconsideration of the Court's MTD Op. ("PI. Mem.") [Dkt. No. 76].
4

See Patterson v. Us., No. 04 Civ. 3140, 2006 WL 2067036, at * 1
(S.D.N.Y. July 26,2006) ("The decision to grant or deny a motion for
reconsideration is within the sound discretion of the district court.") (citing
McCarthy v. Manson, 714 F.2d 234,237 (2d Cir. 1983».
5

Jowers v. Family Dollar Stores, Inc., 455 Fed. App'x 100, 101 (2d
Cir. 2012) (quoting Shrader v. CSXTransp., Inc., 70 F.3d 255,257 (2d Cir. 1995».
6

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for reconsideration may also be granted to '''correct a clear error or prevent
manifest injustice. ,,,7
The purpose of Local Rule 63 is to '''ensure the finality of decisions
and to prevent the practice of a losing party examining a decision and then
plugging the gaps of a lost motion with additional matters.",8 Local Rule 6.3 must
be "narrowly construed and strictly applied so as to avoid repetitive arguments on
issues that have been considered fully by the Court.,,9 Such motions should not be
made reflexively to reargue '''those issues already considered when a party does
not like the way the original motion was resolved. ",10 A motion for

RST (2005) Inc. v. Research in Motion Ltd, No. 07 Civ. 3737,2009
WL 274467, at * 1 (S.D.N.Y. Feb. 4, 2009) (quoting Virgin Atl. Airways, Ltd v.
Nat 'I Mediation Ed, 956 F.2d 1245, 1255 (2d Cir. 1992)).
7

8
Grand Crossing, L.P. v. Us. Underwriters Ins. Co., No. 03 Civ. 5429,
2008 WL 4525400, at *3 (S.D.N.Y. Oct. 6,2008) (quoting s.E.C v. Ashbury
Capital Partners, No. 00 Civ. 7898,2001 WL 604044, at * 1 (S.D.N.Y. May 31,
2001)). Accord Commerce Funding Corp. v. Comprehensive Habilitation Servs.,
Inc., 233 F.R.D. 355, 361 (S.D.N.Y. 2005) ("[AJ movant may not raise on a motion
for reconsideration any matter that it did not raise previously to the court on the
underlying motion sought to be reconsidered.").
Us. v. Treacy, No. 08 CR 366,2009 WL 47496, at * 1 (S.D.N.Y. Jan.
8, 2009) (citation and quotation marks omitted). Accord Shrader, 70 F 3d at 257
(holding that a court will deny the motion when the movant "seeks solely to
relitigate an issue already decided").
9

Makas v. Orlando, No. 06 Civ. 14305,2008 WL 2139131, at *1
(S.D.N.Y. May 19,2008) (quoting In re Houbigant, Inc., 914 F. Supp. 997, 1001
(S.D.N.Y. 1996)).
10

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reconsideration is not an "opportunity for making new arguments that could have
been previously advanced," I I nor is it a substitute for appeal. 12
B.

Leave to Amend

Whether to permit a plaintiff to amend its complaint is a matter
committed to a court's "sound discretion.,,\3 Federal Rule of Civil Procedure 15(a)
provides that leave to amend a complaint "shall be freely given when justice so
requires." "When a motion to dismiss is granted, the usual practice is to grant
leave to amend the complaint,"14 particularly when a complaint is dismissed for
failure to plead fraud with adequate speciiicity under Rule 9(b ).15 Leave to amend
should be denied, however, where the proposed amendment would be futile. 16

Associated Press v. Us. Dep't ofDefense, 395 F. Supp. 2d 17, 19
(S.D.N.Y.2005).
II

12

See Grand Crossing, 2008 WL 4525400, at *3.

13

McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184,200 (2d Cir.

2007).
14
15

Hayden v. County ofNassau, 180 F.3d 42,53 (2d Cir. 1999).
See ATSI Commc 'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 108 (2d

Cir.2007).

See Dougherty v. Town ofN Hempstead Bd. ofZoning Appeals, 282
F.3d 83, 87 (2d Cir. 2002).
16

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III.

DISCUSSION!7
Plaintiffs have not cited any new facts, intervening change in law or

possibility of manifest injustice that meets the standard for reconsideration of the
Court's dismissal and denial ofleave to amend. Plaintiffs argue that the Court
recognized the falsity of LIBOR submissions and statements regarding LIBOR,
and that "[w]ith respect to certain statements that the Court found were not
actionable, the [Proposed Third Amended Complaint (,'PT AC")] now includes
further allegations demonstrating the falsity of those statements.,,18 Specifically,
Plaintiffs argue, the PTAC now alleges that statements regarding Barclays' legal
compliance were false because "the violation of law alleged here was (i) 'at the
direction of members of senior management'; and (ii) was material to the
Company and to a reasonable investor since it exposed the Company to substantial
financial loss and reputational harm. ",19 In addition, Plaintiffs argue that the
17

The background to this motion is set forth in the Motion to Dismiss

Opinion.
18

PI. Mem. at 1.

Id. at 2. For example, the PTAC emphasizes that "Libor was a
prominent area of Barclays' operations (it was one of only five banks that served as
a member of all ten Libor bank panels)" and thus, "Barclays knew that, despite its
representations regarding operational risk and that it had established controls in
place for categories of risk that were relevant to its Libor Submission process, its
Libor Submission process lacked controls and was an area of significant
vulnerability and great known risk for the Company." PTAC ~ 77, 84. In addition,
19

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PTAC adequately pleads loss causation "based, in part, on an analysis provided to
Plaintiffs by an economics expert on loss causation.,,20
These arguments are unavailing. While it is true that the mandate to
"freely give leave [to amend] when justice so requires" is "to be heeded,,,21 I
determined that it was just to deny such leave where Plaintiffs already had detailed
notice of the deficiencies in their Complaint when they first amended

and such

notice was given for the specific purpose of avoiding a second round of
amendment. 22 Plaintiffs cite no reason why they could not have raised the

Plaintiffs emphasize that "[t]he manipulation of the Libor submission process was
known to senior managers of Barclays" and that "Barclays understood the effect of
Libor submissions on the public's perception of the Company." Id. ~ 91. They re­
emphasize the statement that Barclays' business "may not be conducted in
accordance with applicable laws around the world" and argue that this statement
"created a duty to speak fully and truthfully regarding Barclays' legal compliance
and to disclose that it was engaging in knowingly illegal conduct." Id. ~~ 94-95.
PI. Mem. at 2. The sole arguably novel fact emphasized in the PTAC
regarding loss causation is the statement in the DOJ Statement of Facts regarding
"Barclays Accountability," which stated that "due to the [Libor] misconduct,
Barclays ... has been exposed to substantial financial risk, and as a result ofthe
penalties imposed . .. has suffered actual financial loss. PTAC ~ 175. If anything,
this merely confirms that the losses resulted not from a corrective disclosure of
prior misrepresentations or revelation of a concealed risk but from the disclosure of
the penalties and negative press generally.
20

21

Farnan v. Davis, 371 U.S. 172, 182 (1962).

See MTD Op. at 29 ("In this case, however, Plaintiffs received notice
of the deficiencies in their First Amended Complaint at a pre-motion conference on
January 10,2013, and in a follow up letter of January 16,2013, and were given,
22

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allegedly new facts in their SAC, and indeed it is questionable whether Plaintiffs
seek to add any materially different facts from those set forth in the SAC.
Moreover, to the extent that any new facts are alleged, they do not bring to light
new legal arguments, or render plausible the arguments this Court already
considered and found lacking. This is a quintessential attempt to reargue "'those
issues already considered when a party does not like the way the original motion
was resolved, ",23 and to "mak[e] new arguments that could have been previously
advanced,,,24 neither of which are proper bases for reconsideration.

IV.

CONCLUSION
For the foregoing reasons, Plaintiffs' motion for reconsideration is

denied. The Clerk of the Court is directed to close this motion (Docket No. 75)
and this case.

and took, the opportunity to amend again.") (citing 1110113 Transcript ("I am
assuming it will be a better motion and 1 won't need to grant leave to amend. You
could have anticipated everything he is saying. 1 don't need to do this thing
twice.").
23

Makas, 2008 WL 2139131, at *1 (quoting In re Houbigant, Inc., 914

F. Supp. at 1001).
24

Associated Press, 395 F. Supp. 2d at 19.
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Dated:

New York, New York
June 12,2013

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-AppearancesFor Plaintiffs:
David Avi Rosenfeld, Esq.

Samuel Howard Rudman, Esq.

Christopher Michael Barrett, Esq.

Robbins Geller Rudman & Dowd LLP

58 South Service Road, Suite 200

Melville, NY 11747

[phone]
Gregory Mark Nespole, Esq.
Robert B. Weintraub, Esq.
Wolf Haldenstein Adler Freeman & Herz LLP
270 Madison Avenue
New York, NY 10016
[phone]

For Defendants:
Jonathan D. Schiller, Esq.

James Meadows, Esq.

Boies Schiller & Flexner LLP

575 Lexington Avenue

New York, NY 10022

[phone]
Michael BriBe, Esq.

Boies Schiller & Flexner LLP

5301 Wisconsin Avenue NW

Washington, D.C. 20015

[phone]
David H. Braff, Esq.

Jeffrey T. Scott, Esq.

Matthew S. Fitzwater, Esq.

Matthew 1. Porpora, Esq.

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Sullivan & Cromwell LLP

125 Broad St.

New York, NY 10004

[phone]

Andrew 1. Levander, Esq.

Dechert LLP

1095 Avenue of the Americas

New York, NY 10036

[phone]

Cheryl A. Krause, Esq.

Dechert LLP

2929 Arch Street

Philadelphia, P A 19104

[phone]

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