Tropical Sails Corp. v. Yext, Inc.

Filing 81

OPINION & ORDER re: 79 MOTION for Reconsideration re; 77 Memorandum & Opinion filed by Yext, Inc.: For the reasons stated above, Yext's motion for partial reconsideration is denied. (Signed by Judge John F. Keenan on 5/10/2016) (tn)

Case 1:09-md-02013-PAC Document 57

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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TROPICAL SAILS CORP.,
:
UNITED STATES DISTRICT COURT :
SOUTHERN DISTRICT OF NEW YORK:
Plaintiff,
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:
In -againstre FANNIE MAE 2008 SECURITIES :
:
LITIGATION
:
:
:
YEXT, INC.,
:
:
:
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Defendant.
:
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Filed 09/30/10 Page 1 of 45
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: 05/10/2016
No.08 Civ. 7831 (PAC)
14 Civ. 7582
OPINION 2013 (PAC)
09 MD & ORDER
OPINION & ORDER

JOHN F. KEENAN, United States District Judge:
HONORABLE PAUL A. CROTTY, United States District Judge:
Before the Court is Defendant Yext, Inc.’s (“Yext”) motion
1

for partial reconsideration of BACKGROUND April 12, 2016
the Court’s
Opinion &The early years of this decade saw aand denying in part Yext’s
Order granting in part boom in home financing which was fueled, among
other things, by certain rates and lax submitted in connection with
motion to seal low interest documentscredit conditions. New lending instruments, such as
its subprime mortgages (high credit risk loans) and Plaintiff Tropical Sails loans)
motion for summary judgment and Alt-A mortgages (low-documentation
kept (“Tropical Sails”) motion for they took on unmanageable risks on the
Corp.’s the boom going. Borrowers played a role too;class certification.
assumption that consented to the original request to seal, see
Tropical Sails the market would continue to rise and that refinancing options would always be
available in the Corp. v. Yext, Inc., No. 14 Civ. 7582, 2016 WL
Tropical Sails future. Lending discipline was lacking in the system. Mortgage originators did
not hold these (S.D.N.Y. Apr. 12, 2016), and has not on their books, the
1451548, at *1high-risk mortgage loans. Rather than carry the rising risk opposed the
instant motion their loans into the secondary mortgage market, often as securitized packages
originators sold for reconsideration. 1 For the reasons stated
below, Yext’s motion for reconsideration is denied.almost exponentially.
known as mortgage-backed securities (“MBSs”). MBS markets grew
But then the housing bubble burst. In 2006, the demand for housing dropped abruptly
1

Local Civil Rule 6.3 provides the time periods for opposition
and home prices began to fall. In light of the changing housing market, banks modified their
and reply memoranda are governed by Local Rule 6.1(a) or (b).
See S & E.D.N.Y. LOCAL CIV. R. 6.3 (effective Sept. 3, 2013). Yext
lending practices and became unwilling to refinance home mortgages without refinancing.
made its original motion under Federal Rule of Civil Procedure
26 and the time periods for its motion for reconsideration are
thus provided by Local Civil Rule 6.1(a), which allows
1
opposition papers to all references cited as “(¶ _)” or to the “Complaint” are to the Amended Complaint,
Unless otherwise indicated, be filed no later than seven days after
service June 22, 2009. For purposes of this Motion, all allegations in the Amended Complaint are taken as true.
dated of the moving papers.
1
1

I.

Background

The Court assumes familiarity with the facts as set forth
in its May 18, 2015 Opinion & Order. See Tropical Sails Corp.,
2015 WL 2359098 (S.D.N.Y. May 18, 2015).

Relevant to the

instant motion, Yext moved the Court to seal 22 of 65 exhibits
submitted in connection with its motion for summary judgment and
Tropical Sails’s motion for class certification. See Tropical
Sails Corp., 2016 WL 1451548, at *2.
in two categories:

Yext divided the exhibits

those reflecting “its confidential marketing

and business development activities” and those reflecting “its
confidential sales statistics.” Id.

In support of its motion to

seal, Yext submitted one declaration from its attorney. See id.;
(see also Decl. of Gavin J. Rooney [hereinafter “Rooney Decl.”]
(filed Mar. 29, 2016), ECF No. 16).
The Court granted Yext’s motion to seal the category of
documents reflecting its confidential marketing and business
development activities, ruling that Yext carried its burden of
demonstrating that higher values overcome the presumption of
public access by identifying the specific harm of competitive
injury that Yext would suffer if its market predictions and
intelligence, product comparisons, and strategy were made
public. Tropical Sails Corp., 2016 WL 1451548, at *4.

The Court

denied Yext’s motion to seal the category of documents
reflecting its sales statistics because counsel made only the
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broad allegation that “[p]ublic disclosure . . . would raise a
substantial risk of harm to Yext since competitors would have
access to Yext’s confidential sales information.” Id. (quoting
Rooney Decl. ¶ 7).

The Court ruled that Yext failed to meet its

burden of demonstrating that higher values overcome the
presumption of public access because it did not provide either
specific examples of how public access would harm Yext or
articulated reasons why public access would harm Yext. Id.
In connection with its motion for partial reconsideration,
Yext submits a new affidavit from Stephen Cakebread, Chief
Financial Officer of Yext. (See Mem. of Law in Support of Mot.
for Partial Reconsideration [hereinafter “Mem.”] 1-2 (filed Apr.
25, 2016), ECF No. 80; Declaration of Stephen Cakebread
[hereinafter “Cakebread Decl.”] ¶ 1 (filed Apr. 25, 2016), ECF
No. 80-1.)

Yext asserts that the Cakebread Declaration remedies

its failure to carry its burden by “explain[ing] in detail why
Yext would be damaged” if the sales documents were publicly
available. (Mem. 1-2.)
II.

Discussion

The standard for granting a motion for reconsideration “is
strict, and reconsideration will generally be denied 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.”
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Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995).
“A motion for reconsideration is appropriate only where the
movant demonstrates that ‘the Court has overlooked controlling
decisions or factual matters that were put before it on the
underlying motion . . . and which, had they been considered,
might have reasonably altered the result before the court.’”
Range Rd. Music, Inc. v. Music Sales Corp., 90 F. Supp. 2d 390,
392 (S.D.N.Y. 2000) (emphasis and alteration in original)
(quoting Yurman Design Inc. v. Chaindom Enters., Inc., No. 99
Civ. 9307(JFK), 2000 WL 217480, at *1 (S.D.N.Y. Feb. 22. 2000)).
“In particular, the rule forbids the submission of supporting
affidavits absent the direction of the Court, because motions to
reconsider are ‘not an occasion for making arguments and
offering evidence that could have been, but was not, adduced on
the original motion.’” Gupta v. Attorney Gen. of U.S., 52 F.
Supp. 3d 677, 682 (S.D.N.Y. 2014) (quoting Mannion v. Coors
Brewing Co., No. 04 Civ. 1187(LAK), 2007 WL 3340925, at *1
(S.D.N.Y. Nov. 7, 2007)); see S & E.D.N.Y. LOCAL CIV. R. 6.3 (“No
affidavits shall be filed by any party unless directed by the
Court.”)

“[A]s is obvious from Local Civil Rule 6.3 . . . , the

proponent of a motion for reconsideration is not supposed to
treat the court’s initial decision as the opening of a dialogue
in which that party may then use such a motion to advance new
theories or adduce new evidence in response to the court’s
4

rulings.” de los Santos v. Fingerson, No. 97 Civ. 3972(MJM),
1998 WL 788781, at *1 (S.D.N.Y. Nov. 12, 1998).

“The purpose of

the rule 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.’”
Carolco Pictures Inc. v. Sirota, 700 F. Supp. 169, 170 (S.D.N.Y
1988) (quoting Lewis v. N.Y. Tel., No. 83 Civ. 7129, 1986 WL
1441, at *1 (S.D.N.Y. 1986) (discussing Local Rule 6.3’s
predecessor Local Rule 3(j))).
Unfortunately, Yext asks the Court to reconsider its April
12, 2016 Opinion & Order based on evidence Yext did not put
before the Court on its original motion.

Yext does not suggest

that the Court overlooked any controlling opinion or fact, nor
does Yext claim that the Cakebread Declaration was previously
unavailable or otherwise offer a reason for why Yext should be
permitted to offer the Cakebread Declaration.

Instead, Yext

merely proffers the Cakebread Declaration as “curative of the
inadequate supporting information provided with Yext’s initial
motion.” (Mem. 2.)

Because Yext seeks “to submit additional

evidence in support of a motion for reconsideration . . . , they
seek . . . to do something the applicable rule forbids.” de los
Santos, 1998 WL 788781, at *1.

Accordingly, the Court must deny

Yext’s motion for partial reconsideration of its April 12, 2016
Opinion & Order.
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Conclusion

For the reasons stated above, Yext's motion for partial
reconsideration is denied.
SO ORDERED.

Dated:

New York, New
May 10, 2016

York~ ~ohlft.-=:L
United States District Judge

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