United States of America v. Wells Fargo Bank, N.A.
Filing
306
MEMORANDUM OPINION AND ORDER re: 296 MOTION for Certificate of Appealability /Notice of Defendant Kurt Lofrano's Motion to Amend and Certify Order for Interlocutory Appeal, dated October 7, 2015, re 295 filed by Kurt Lofrano: that, Lofrano's motion is denied, as further set forth in this order. The Clerk of Court is directed to terminate Docket No. 296. (Signed by Judge Jesse M. Furman on 11/2/2015) (tn)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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UNITED STATES OF AMERICA,
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Plaintiff,
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-v:
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WELLS FARGO BANK, N.A., et al.,
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Defendants.
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11/02/2015
12-CV-7527 (JMF)
MEMORANDUM OPINION
AND ORDER
JESSE M. FURMAN, United States District Judge:
By Opinion and Order entered on September 22, 2015, this Court held, on a question of
first impression in this Circuit, that Defendant Kurt Lofrano may not pursue an advice-of-counsel
defense over the objection of his co-defendant (and employer), Wells Fargo Bank, N.A. (“Wells
Fargo” or the “Bank”), because doing so would require disclosure of materials protected by the
Bank’s attorney-client privilege. See United States v. Wells Fargo Bank, N.A., — F. Supp. 3d —
, No. 12-CV-7527 (JMF), 2015 WL 5582120 (S.D.N.Y. Sept. 22, 2015) (Docket No. 295).
Lofrano now moves, pursuant to Title 28, United States Code, Section 1292(b), for a certificate
of appealability allowing him to challenge the Court’s ruling in an interlocutory appeal. (Docket
No. 296). The Government “takes no position” on Lofrano’s motion, but expresses its “concern”
about the possibility of “delay in the progress of this litigation” should Lofrano be permitted to
take an appeal. (Docket No. 301). Wells Fargo does not really take a position on Lofrano’s
motion either, except to argue that this Court was correct in its earlier ruling. (Docket No. 304).
Section 1292 is “a rare exception to the final judgment rule that generally prohibits
piecemeal appeals.” Koehler v. Bank of Bermuda Ltd., 101 F.3d 863, 865 (2d Cir. 1996).
Pursuant to Section 1292(b), a district court has discretion to certify an order for interlocutory
appeal if the moving party shows that the order (1) “involves a controlling question of law”; (2)
“there is substantial ground for difference of opinion”; and (3) “an immediate appeal from the
order may materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b);
see In re Facebook, Inc., IPO Sec. & Derivative Litig., 986 F. Supp. 2d 524, 529-30 (S.D.N.Y.
Mar. 13, 2014). Of the three factors, the third — whether an immediate appeal would materially
advance the ultimate termination of the litigation — “is the most important.” Tocco v. Real Time
Resolutions, Inc., No. 14-CV-810, 2015 WL 5086390, at *2 (S.D.N.Y. Mar. 4, 2015) (internal
quotation marks omitted). Further, in evaluating that factor, “courts must consider the
institutional efficiency of both the district court and the appellate court.” Id. Ultimately,
certification “is to be used only in exceptional cases where an intermediate appeal may avoid
protracted and expensive litigation and is not intended to open the floodgates to a vast number of
appeals from interlocutory orders in ordinary litigation.” Telectronics Proprietary, Ltd. v.
Medtronic, Inc., 690 F. Supp. 170, 172 (S.D.N.Y. 1987) (internal quotation marks omitted);
accord Koehler, 101 F.3d at 865-66; Flor v. BOT Fin. Corp., 79 F.3d 281, 284 (2d Cir. 1996);
see also, e.g., Westwood Pharm., Inc. v. Nat’l Fuel Gas Distrib. Corp., 964 F.2d 85, 89 (2d Cir.
1992) (urging district courts “to exercise great care in making a § 1292(b) certification”).
Applying those standards here, Lofrano’s motion is denied. To be sure, the Court’s
Opinion and Order arguably did involve a “controlling question of law” (even if reversal would
not actually result in termination of the litigation altogether), and the Court is inclined to agree
that “there is substantial ground for difference of opinion” (even if an issue of “first impression,
standing alone, is insufficient to demonstrate” as much, Flor, 79 F.3d at 284). But the Court
cannot find that an immediate appeal would materially advance the ultimate termination of the
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litigation. This case was filed over three years ago, and discovery — which has been contentious
and protracted — is due to close in only eighteen days. (Docket No. 300). The Court assumes
that one or both Defendants will then seek summary judgment — and any such motion would be
fully briefed (absent extensions) in a little more than two months. If Lofrano prevails on
summary judgment, his argument for appeal would, of course, be moot. If he does not prevail,
the case would — absent settlement — proceed to trial as early as next spring or summer. A
defense verdict at trial would also moot Lofrano’s argument; and if Plaintiff were to prevail at
trial, Lofrano could take an appeal of any and all issues at once. A reversal after final judgment
would obviously require a retrial as to Lofrano, but that is a risk inherent in any appeal after trial.
By contrast, given the probability that an interlocutory appeal (assuming the Circuit even
accepted the issue for interlocutory review) would take many months or even years, granting
Lofrano’s motion would likely result in either a lengthy adjournment of trial against both
Defendants or a severance and two trials anyway. Put simply, an interlocutory appeal would not
promote the efficient administration of justice, as the risk of having to retry the case against
Lofrano after final judgment is much smaller than the near certainty of multiple trials and
multiple appeals that would follow from allowing an interlocutory appeal. See, e.g., Phillips ex
rel. Green v. City of New York, 453 F. Supp. 2d 690, 747-48 (S.D.N.Y. 2006) (denying
certification where, as here, the case was nearly trial ready after three years of litigation, noting
that “the substantial delay resulting from an interlocutory appeal at this point would derail the
resolution of the merits of this action for potentially several years”); see also, e.g., SEC v. Credit
Bancorp, Ltd., 103 F. Supp. 2d 223, 226-27 (S.D.N.Y. 2000) (“The institutional efficiency of the
federal court system is among the chief concerns underlying Section 1292(b).”)
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The Clerk of Court is directed to terminate Docket No. 296.
SO ORDERED.
Date: November 2, 2015
New York, New York
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