Atkinson, M.D. et al v. Morgan Asset Management, Inc. et al

Filing 291

ORDER DENYING MOTIONS FOR RECONSIDERATION 267 275 277 278 . Signed by Judge Samuel H. Mays, Jr., on December 30, 2010. (Mays, Samuel)

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION IN RE: REGIONS MORGAN KEEGAN SECURITIES, DERIVATIVE, AND ERISA LITIGATION IN RE: REGIONS MORGAN KEEGAN OPEN-END FUND LITIGATION ) ) ) ) ) ) ) ) ) )

Case No. 07-2784 MDL 2009

ORDER DENYING MOTIONS FOR RECONSIDERATION

Before

the

Court

are

the

October

28,

2010

Motion

for

Reconsideration filed by the Lead Plaintiffs (ECF No. 275) and the November 4, 2010 Motions & for Reconsideration ("Morgan filed by and

Defendants

Morgan

Keegan

Co.,

Inc.

Keegan")

Regions Bank ("Regions").

(ECF Nos. 277-78.)

All parties filed (See ECF

their responses in opposition on November 30, 2010. Nos. 286-88.)

Both the Lead Plaintiffs and the Defendants ask

this Court to modify its Order of September 30, 2010, which granted in part and denied in part Defendants' Motions to

Dismiss the Consolidated Amended Complaint ("CAC").

See In re

Regions Morgan Keegan Open-End Fund Litig., No. 07-2784, MDL 2009, 2010 U.S. Dist. LEXIS 104246, at *43-44 (W.D. Tenn. Sept. 30, 2010). For the following reasons, the Motions for

Reconsideration are DENIED.

I.

STANDARD OF REVIEW

District courts have the inherent authority, confirmed by the common law and Federal Rule of Civil Procedure 54(b), to reconsider any interlocutory order. Rodriguez v. Tenn. Laborers

Heath & Welfare Fund, 89 F. App'x 949, 959 (6th Cir. 2004); Mallory v. Eyrich, 922 F.2d 1273, 1282 (6th Cir. 1991). reconsideration, a district court may modify or rescind On an

interlocutory order and may "hold whatever hearings it deems advisable." motion for Mallory, 922 F.2d at 1282. reconsideration if 1) an Courts will grant a intervening change in

controlling law occurs; 2) new evidence becomes available; or 3) there is a need to correct a clear error of law or to prevent manifest injustice. "may not be used Rodriguez, 89 F. App'x at 959. to relitigate old matters, or to Motions raise

arguments or present evidence that could have been raised prior to the entry of judgment." 11 Charles Alan Wright et al.,

Federal Practice and Procedure § 2810.1 (2d ed. 1995). II. ANALYSIS A. Lead Plaintiffs' Motion for Reconsideration Familiarity with the facts is assumed. See Open-End Fund Lead Plaintiffs

Litig., 2010 U.S. Dist. LEXIS 104246, at *5-17.

argue that the Court erred by dismissing their claims under §§ 10(b) and 20 of the Securities and Exchange Act of 1934 ("the `34 Act"), 15 U.S.C. §§ 78j(b), 2 78t(a), and Rule 10b-5

promulgated dismissed

thereunder.

17

C.F.R.

§

240.10b-5. those

The

Court for

Lead

Plaintiffs'

claims

under

provisions

failure to plead scienter as required by the Private Securities Litigation Reform Act ("PSLRA"). U.S. Dist. LEXIS 104246, at *20-35. the CAC "positively and that reeks the of the Open-End Fund Litig., 2010 Lead Plaintiffs argue that rankest ignored and most obvious relevant

scienter"

Court

numerous

allegations in the CAC.

(Pls.' Mem. in Support of Their Mot.

for Reconsideration, at 7-8, 16, ECF No. 275-1.) ("Pls.' Mem.") They also assert that Court erred by drawing an inference from the CAC in the Defendants', rather than the Lead Plaintiffs', favor. (Id. at 11.) basis of Lead Plaintiffs' primary argument is the

The

prolixity of their Complaint. including 766 paragraphs and

With four hundred pages of text, six attached appendices, Lead

Plaintiffs assert that they must have pled scienter sufficiently for the Court to make the required inference. (See id. at 6-9.)

Lead Plaintiffs note that the CAC uses some form of the word "know" more than fifty times. (Id. at 6.) The PSLRA demands

Prolixity does not equal specificity. specificity.

It requires that plaintiffs pleading a claim under

the `34 Act 1) "state with particularity" the facts constituting the alleged violation, including "specifying each statement

alleged to have been misleading," 15 U.S.C. § 78u-4(b)(1), and 3

2) "state with particularity the facts giving rise to a strong inference that the defendant acted with the particular state of mind." known Id. § 78u-4(b)(2). as scienter and That "particular state of mind" is a plaintiff to show that a

requires

defendant's intention was "to deceive, manipulate or defraud." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 313 (2007) (citation omitted). An inference of scienter is "strong"

within the meaning of the PSLRA if it is "more than merely plausible or reasonable ­ it must be cogent and at least as compelling as any opposing inference of nonfraudulent intent." Id. at 314. plaintiff at In the Sixth Circuit, scienter requires that a least state facts sufficient to support the

conclusion that a defendant acted with recklessness. Diebold, Inc., 590 F.3d 390, 396 (6th Cir. 2009).

Konkol v.

Recklessness

is "highly unreasonable conduct which is an extreme departure from the standards of ordinary care." Mansbach v. Prescott,

Ball, & Turben, 598 F.2d 1017, 1025 (6th Cir. 1979). In its prior Order, the Court analyzed all four factors1 emphasized by Lead Plaintiffs. Compare Open-End Fund Litig.,

2010 U.S. Dist. LEXIS 104246, at *27-32, with Pls.' Mem. in Opp. to Defs.' Mot. to Dismiss, at 98, ECF No. 238. ("Pls.' Dismiss

1

In their Motion, Lead Plaintiffs assert that the Court analyzed only two factors in its scienter analysis. Compare Pls.' Mem. at 6 ("The Court only addressed two of the CAC's allegations of Defendants' knowledge"), with Open End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *27 ("Plaintiffs point to four factors suggesting scienter in this case." (citation omitted)).

4

Resp.")

The

Court

also

noted

one

important

factor

Lead

Plaintiffs chose not to emphasize. U.S. Dist. LEXIS 104246, at *32-33.

Open-End Fund Litig., 2010 Although Lead Plaintiffs

challenge the inferences the Court drew from the CAC, case law is clear: a district court has a duty to consider both the

inferences Plaintiffs urge and "competing inferences rationally drawn from the facts alleged." Tellabs, 551 U.S. at 314. That

means that a district court must also consider non-fraudulent conclusions that one could fairly draw from the same alleged facts, engage in a comparative analysis, and determine whether the inference of fraudulent intent is "cogent and at least as compelling as any opposing inference of nonfraudulent intent." Id. Here, Lead Plaintiffs' allegations, viewed as a whole, were See Open-End Fund Litig., 2010 U.S.

not at least as compelling.

Dist. LEXIS 104246, at *24-35. In their pleadings, Lead Plaintiffs repeatedly undermined their own scienter allegations. They have acknowledged that

they did "not allege that the dollar value for any security was incorrect at any time during the Class Period." Resp. at 22.) (Pls.' Dismiss

Lead Plaintiffs did make specific allegations They alleged that the were illiquid when

about certain investments the Funds made. Defendants concluded that the

investments

Defendants analyzed them for independent clients, but concluded the opposite when analyzing them for the Funds. 5 See Open-End

Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *29-30.

However,

Lead Plaintiffs at most indentified twenty securities in which the Funds invested over a period of three years. Id. at 30.

Lead Plaintiffs did not quantify those investments in terms of the Funds' total assets of $2.2 billion. Id. It is more likely

that those highlighted transactions involved a de minimis amount of the Funds' assets. Id. at *30-31. De minimis accusations

will not support scienter. Similarly, Lead Plaintiffs' allegations of insider trading are insufficient that because triggered Lead the Plaintiffs insider admitted that the in a

information

sales

appeared

published article available to any member of the general public. (CAC ¶ 352, ECF No. 218.) The CAC also failed to allege "how

many employees sold their shares in the Funds, when these sales took place, how many total employees held the Funds' shares, or whether individual share sales made a marked difference in the number of shares held by Morgan Keegan employees." Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *34. Lead Plaintiffs complain that they could not fill the holes in their Complaint absent discovery. (Pls.' Mem. at 3.) Open-End

Congress enacted the PSLRA to "check against abusive litigation by private parties." Tellabs, 551 U.S. at 313. One of those

checks was a stay on all discovery in cases under the `34 Act until they had survived a motion to dismiss. 6 15 U.S.C. §78u-

4(b)(3)(B). filed, not

A plaintiff's suit must be meritorious when it is after the completion of a "fishing expedition[]"

aided by discovery.

See Konkol, 590 F.3d at 397 (citing Fischer

v. Vantive Corp. (In re Vantive Corp. Secs. Litig.), 283 F.3d 1079, 1087 (9th Cir. 2002)). One cannot survive the PSLRA's

heightened scrutiny merely by listing a series of disturbing facts them. that and generally alleging that the defendants knew about

(Cf. Pls.' Mem. at 6-8.) permit the Court to draw

One must plead specific facts a strong inference that the

defendants acted with the required intent.

See Konkol, 590 F.3d

at 397 (noting that alleging "access to information" is not enough to satisfy the PSLRA's standard (citation omitted)). It

is not the job of the Court to sort through a "data dump" and construct plaintiffs' claims for them. them on their own. Lead Plaintiffs also argue that the Court erred by They must cogently state

dismissing their `34 Act claims because of confusion about the defendants Lead Plaintiffs actually sued. 19); see also Open-End Fund Litig., 2010 (Pls.' Mem. at 17U.S. Dist. LEXIS

104246, at *22-24.

A complaint that fails to identify clearly

who is a defendant fails under any form of heightened pleading standard. Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *24. and Here, Plaintiffs chose to define "Morgan Asset Management" "Morgan Keegan" to include 7 not only those corporate

Defendants but also "their respective officers and employees as named Defendants, including John Does One through Twenty." ¶ 88.) (CAC

The CAC uses those defined terms in Counts V and VI,

leading one to believe that the officers and directors were also defendants in those counts. (Id. ¶¶ 742, 752.) Despite Lead

Plaintiffs' definition of "Morgan Asset Management" and "Morgan Keegan," Counts I and VII of the CAC specifically state whether they include or do not include the officers and directors. ¶¶ 684, 758.) (Id.

Thus, Lead Plaintiffs introduced ambiguity into Certain individual

the CAC about what those defined terms mean. Defendants noted this confusion.

(See Mem. of Law in Support of

the Individual Defs.' Mot. to Dismiss, at 1 n.1, ECF No. 226-1.) Lead Plaintiffs did not respond. The ambiguity remained.

Lead Plaintiffs argue that the questionable headings were "simply silent as to the Defendant officers and directors," but that the "pattern" should have been clear. (Pls.' Mem. at 18.)

The Individual Defendants did not find it clear; neither did the Court. complaint If can there never is be one topic about it is which the a plaintiff's of the

silent,

identity

defendants.

See Bell Atl. v. Twombly, 550 U.S. 544, 555 (2007)

(noting that, even under the relaxed standards of Federal Rule of Civil Procedure 8, a complaint must contain "a short and plain statement of the claim" that will "give the defendant fair notice of what the . . . claim is." (omission in original; 8

citation omitted)).

That is true, a fortiori, under the PSLRA's

heightened pleading standards, which require specificity about every required element. See Konkol, 590 F.3d at 396. Cogency

and prolixity are rarely allies.

Lead Plaintiffs' arguments for

reconsideration of the dismissal of the `34 Act claims are not well-taken, and their Motion is DENIED.2 B. Defendants' Motions for Reconsideration Defendants Morgan Keegan and Regions have filed separate Motions for Reconsideration, arguing that the Court erred in failing to dismiss Lead Plaintiffs' claims under the Securities Act of 1933 (the "`33 Act"), 15 U.S.C. §§ 77k, 77l, 77o. See

Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *35-40. Morgan Keegan argues that 1) these claims allege mismanagement of the Defendant Funds and therefore, under Maryland law, may only be raised in a derivative action; and 2) Lead Plaintiffs' CAC demonstrates that they cannot prove loss causation. (Morgan

Keegan Mem. in Support of Mot. for Reconsideration, at 2-9, ECF No. 277-1.) ("Morgan Keegan Mem.") in its arguments. (Regions Mem. Regions joins Morgan Keegan in Support of Mot. for

Reconsideration, at 1-2, ECF No. 278-1.)

2

Lead Plaintiffs did not move for reconsideration of the Court's dismissal of their claims under §§ 13, 22, 30, 34(b), and 47(b) of Investment Company Act of 1940. See Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *41-43.

9

1. Derivative v. Direct Claims Morgan Keegan and Regions argue that Lead Plaintiffs may raise their claims only in a derivative action because the

gravamen of the CAC is that the Defendants mismanaged the Funds. (Morgan Keegan Mem. at 2-3.) of the Alabama Supreme Defendants cite the recent opinion in Ex parte Regions Financial

Court

Corp., No. 1090425, 2010 Ala. LEXIS 183, at *24-26 (Ala. 2010), which dismissed a related shareholder suit filed in Alabama

state court after determining that the claims were derivative in nature. Morgan Keegan and Regions also argue that they never

promised to abide by any of the alleged investment restrictions that Lead Plaintiffs assert appeared in the Funds'

documentation.

(Morgan Keegan Mem. at 6.)

Defendants are correct that, under general principles of corporate law, "if a shareholder's investment is frittered away by corporate mismanagement, only the corporation can recover." See, e.g., Lubin v. Skow, 382 F. App'x 866, 870 (11th Cir. 2010) (citation omitted). A plaintiff also may not plead a cause of

action under the federal securities laws by alleging "fraud by hindsight." That occurs when a plaintiff claims that 1) the

company should have disclosed bad news it eventually revealed sooner or 2) a defendant's optimistic past statements were

fraudulent because later developments proved them to be false.

10

In re Atlas Air Worldwide Holdings, Inc. Sec. Litig., 324 F. Supp. 2d 474, 494 (S.D.N.Y. 2004). These prohibited categories of claims are distinct from the claims made by Lead Plaintiffs here. Material

misrepresentations in a registration statement of the risk posed by the Funds' holdings are actionable under the `33 Act. U.S.C. § 77k(a); In re Citigroup, Inc. Bond Litig., No. 08 See 15 Civ.

9522, 2010 U.S. Dist. LEXIS 69257, at *68-69 (S.D.N.Y. July 12, 2010). An allegation that a statement was false when made is

actionable under the federal securities laws and does not state an invalid mismanagement or fraud-by-hindsight claim. Atlas Worldwide Holdings, 324 F. Supp. 2d at 494 n.11. In re Lead

Plaintiffs allege that Defendants stated they would not invest more than 15% of the Funds' assets in illiquid securities or more than 25% of the Funds' assets in securities related to the same industry. that Funds those were, (CAC ¶¶ 162, 276.) were Lead Plaintiffs also allege when made of because the the

statements at that

misleading in

time,

violation

stated Whether

restrictions. Defendants made

(See, e.g., id. ¶¶ 171, 276(a), (c).) those statements is a question of

fact

not

justiciable on a motion to dismiss. U.S. 89, 93-94 (2007) (per

See Erickson v. Pardus, 551 (cautioning courts that

curiam)

factual disputes are not for resolution on motions to dismiss

11

and that the facts as alleged should be read in the light most favorable to the plaintiff). Ex parte Regions Financial Corp. is distinguishable because it was a separate is only suit briefly with a separate in complaint. Alabama to That Supreme its

complaint Court's

excerpted it is

the

opinion;

therefore,

impossible

compare

allegations to those presently before the Court. LEXIS 183, at *2-4.

See 2010 Ala.

The portion excerpted makes only a general

allegation of fraud and is not comparable to Lead Plaintiffs' more specific allegations here. 162, 171, 276. Compare id. with e.g., CAC ¶¶

Lead Plaintiffs' allegations are sufficient, and In re Citigroup Bond

they have stated claims under the `33 Act.

Litig., 2010 U.S. Dist. LEXIS 69257, at *49, 68-69; In re Atlas Worldwide Holdings, 324 F. Supp. 2d at 494 & n.11; cf. In re Surebeam Corp. Sec. Litig., No. 03 CV 1721 JM (FOR), 2004 U.S. Dist. LEXIS 26951, at *41-42 (S.D. Cal. June 3, 2005) (noting that merely because the same allegations and a federal must may support a law

derivative claim does

mismanagement not mean

claim a

securities bring one

that

plaintiff

claim

instead of the other). 2. Loss Causation Morgan Keegan and Regions next argue that the Court erred in refusing to dismiss Lead Plaintiffs' `33 Act claims for

failure to plead loss causation. 12

See Open-End Fund Litig., 2010

U.S. Dist. LEXIS 104246, at *38. element of a claim under § 11 of

Loss causation is not an the `33 Act. It is See an 15

affirmative defense that the Defendants must prove. U.S.C. § 77l(b).

Lead Plaintiffs have not pled themselves out

of court by demonstrating that it is impossible for them to demonstrate succeed stage. on loss this causation affirmative ­ the only at way the Defendants could

defense

motion-to-dismiss

Cf. Jackson v. Marion County, 66 F.3d 151, 153 (7th Cir.

1995) ("[A] plaintiff can plead himself out of court by alleging facts which show that he has no claim, even though he was not required to allege those facts." (citation omitted)).

Affirmative defenses are best left for adjudication on motions for summary judgment or at trial. See Indiana State Dist.

Council of Laborers v. Omnicare, Inc., 583 F.3d 935, 947 (6th Cir. 2009) (reversing § 11 claim a district failure court's to plead dismissal loss of a

plaintiff's

for

causation

because that affirmative defense is generally not grounds for dismissal). See 11 Defendants' Motions for Reconsideration are DENIED. Alan Wright et al., Federal Practice and

Charles

Procedure § 2810.1 (2d ed. 1995) (noting that reconsideration should not be used "to relitigate old matters"). C. Lead Plaintiffs' Motion to Certify Final Judgment Lead Plaintiffs move in the alternative for the Court to certify its judgment dismissing their `34 Act claims against 13

Defendants as final under Federal Rule of Civil Procedure 54(b) so that they may appeal immediately. (Pls.' Mem. at 19-20.)

Defendants oppose that request and argue that the `34 Act and `33 Act claims are not severable and thus are unsuitable for piecemeal, interlocutory appeals. (Morgan Keegan Mem. in Opp.

to Pls.' Mot. for Reconsideration, at 11-14, ECF. No. 286.) ("Morgan Keegan Opp.") Rule 54(b) provides, in pertinent part: When an action presents more than one claim for relief ­ whether as a claim, counterclaim, crossclaim, or third-party claim ­ or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. A district court must make two findings before it may certify a partial judgment as final. to one or more claims. First, the judgment must be final as

Lowery v. Fed. Express Corp., 426 F.3d Second, there must be no just reason 54(b) "attempts to strike a balance

817, 821 (6th Cir. 2005). for delay. Id. Rule

between the undesirability of piecemeal appeals and the need for making review available at a time that best serves the needs of the parties." (6th Cir. Solomon v. Aetna Life Ins. Co., 782 F.2d 58, 60 (citation omitted). It "does not tolerate

1986)

immediate appeal of every action taken by a district court." Gen. Acquisition, Inc. v. GenCorp, Inc., 23 F.3d 1022, 1026 (6th Cir. 1994). 14

When considering certification under Rule 54(b), a "claim" is "the aggregate of operative facts which give rise to a right enforceable in the courts." Lowery, 426 F.3d at 821 (quoting

McIntyre v. First Nat'l Bank of Cincinnati, 585 F.2d 190, 192 (6th Cir. 1978)) (internal quotation marks omitted). One

"claim" for purposes of an interlocutory appeal may give rise to multiple avenues for legal relief under separate theories of liability. appeal Id. In after Rule Lowery, the 54(b) the Sixth Circuit had at dismissed found an the

brought of

district satisfied.

court Id.

requirements

819.

Lowery

brought claims against his employer for racial discrimination and retaliation under federal employment law and breach of

contract under state law.

Id. at 820.

The district court

granted summary judgment in favor of the employer on Lowery's federal claims, but found that the state-law contract claim

should proceed to trial.

Id.

It entered final judgment on the The Sixth Lowery's state-law operative

federal claims under Rule 54(b) at Lowery's request. Circuit federal contract held that the district court erred because his of

employment claim

discrimination from the

claims

and

arose

"same

aggregate

facts" for "the same underlying injury," Lowery's failure to receive a pay increase and job opportunities similar to those of other managers. Id. at 821.

15

Lead Plaintiffs have brought suit against Defendants under two separate theories of recovery under the `33 and 34 Acts. However, their theories of recovery are based on one "claim," as defined by Lowery ­ that Defendants misrepresented the risks the Funds undertook and hid the actual state of the Funds'

portfolios from investors.

Open-End Fund Litigation, 2010 U.S. The Court's Order dismissed Lead

Dist. LEXIS 104246, at *13-16.

Plaintiffs' theory of recovery under the `34 Act, but it did not extinguish their claim. Id. at *35. Under the same aggregate

of operative facts, Plaintiffs successfully stated a theory of recovery under the `33 Act, which, although it has a heightened pleading standard, does not require Lead Plaintiffs to plead scienter. Id. at *35-40. The Order did not finally determine

all matters concerning one of Lead Plaintiffs' claims within the meaning of Rule 54(b). See Lowery, 426 F.3d at 820-21. Thus,

the Court cannot make the required first finding. Even if Lead Plaintiffs could meet the first requirement, they have failed to demonstrate that there is no just reason for delaying an appeal. five factors helps See id. at 821. to guide a A non-exhaustive list of court's analysis of

district

whether there is no just reason for delay: (1) the relationship between the adjudicated and unadjudicated claims; (2) the possibility that the need for review might or might not be mooted by future developments in the district court; (3) the possibility that the reviewing court might be obliged 16

to consider the same issue a second time; (4) the presence or absence of a claim or counterclaim which could result in set-off against the judgment sought to be made final; (5) miscellaneous factors such as delay, economic and solvency considerations, shortening the time of trial, frivolity of competing claims, expense and the like. Id. at 822 (citing Gen. Acquisition, 23 F.3d at 1030). courts have great discretion in weighing these District factors.

Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 12 (1980) ("[T]he task of weighing and balancing the contending factors is peculiarly one for the trial judge," who knows the case best.). As discussed previously, and the relationship between is Lead close

Plaintiffs'

adjudicated

unadjudicated

claims

because they are based on the same set of facts.

That also

means that, if Lead Plaintiffs take an immediate appeal, the Court of Appeals would be likely to review the same facts and consider dismissal similar of the issues `34 twice ­ once and on once appeal after from the the final Cf.

Act

claims

disposition of Lead Plaintiffs' claims under the `33 Act.

Curtiss-Wright, 446 U.S. at 9 (noting that, where a district court finds that the claims are severable both factually and legally, certification under Rule 54(b) may be appropriate).

Because the facts supporting the different theories of recovery are so intertwined, any appeal would result in delay. This case

has been pending since 2007 and is now ready for discovery. Further interlocutory legal maneuvering 17 would unjustifiably

delay final adjudication of the pending claims and prejudice both the class members represented by the Lead Plaintiffs and the Defendants, who have an interest in a final and speedy

determination of all claims. Against these strong reasons for declining to authorize an immediate appeal, there are no correspondingly strong reasons to authorize. The cases Lead Plaintiffs cite in support of their

Motion are inapposite and demonstrate the impropriety of a Rule 54(b) certification in the present case. See, e.g., Chad Youth

Enhancement Ctr., Inc. v. Colony Nat'l Ins. Co., No. 3:09-0545, 2010 U.S. Dist. LEXIS 53561, at *6-7 (M.D. Tenn. June 1, 2010) (granting certification where the only issue remaining was the correctness of the court's challenged order and "the parties [had] resolved their differences" on all remaining issues); Life Ins. Co. of N. Am. v. Simpson, No. 08-2446, 2009 U.S. Dist. LEXIS 62944, at *19 (W.D. Tenn. July 16, 2009) where (finding "no other

certification

under

Rule

54(b)

appropriate

claims" existed against the moving party and "it no longer has any role in this litigation"). Because Lead Plaintiffs have not

demonstrated the presence of either factor required to certify a partial final judgment under Federal Rule of Civil Procedure 54(b), their Motion is DENIED.

18

D. Motion to Strike Defendants filed a Motion to Strike Lead Plaintiffs' SurReply and note in their Motions for Reconsideration that the Motion to Strike remains pending. Keegan Opp. at 1 n.1.) (See ECF No. 267; Morgan

Defendants' Motion argues that the Court

should strike the 637-page declaration Lead Plaintiffs attached to their Sur-Reply. They note that, in addition to new case

law, Lead Plaintiffs also included recent regulatory filings and more than seventy exhibits. ECF No. 267.) engaged in (Defs.' Mot. to Strike, at 3-4.,

Lead Plaintiffs respond that Defendants have behavior, supplementing their filings in

similar

support of their Motions to Dismiss with voluminous extraneous materials. No. 268.) The Sixth Circuit generally takes "a liberal view of what matters fall within the pleadings for purposes of" a motion to dismiss. 2001). Armengau v. Cline, 7 F. App'x 336, 344 (6th Cir. That does not mean that a court may consider any and all the parties submit. Motions to dismiss test the (Pls.' Mem. in Opp. to Mot. to Strike, at 2-4, ECF

materials

sufficiency of the complaint.

5A Charles A. Wright & Arthur R. If

Miller, Federal Practice and Procedure § 1356 (2d ed. 1990).

a court considers matters outside the pleadings, it must treat the motion as one for summary judgment, give notice to the

parties, and allow for supplementation of the record. 19

Fed. R.

Civ. P. 12(d); Armengau, 7 F. App'x at 343. to a motion to dismiss may be considered

Documents attached as part of the

pleadings if they are "referred to in a complaint and central to the claim." Armengau, 7 F. App'x at 343 (citing Jackson v. City A court may governmental

of Columbus, 194 F.3d 737, 745 (6th Cir. 1999)). also consider public records, decisions of

agencies, and matters of which it may take judicial notice. Jackson, 194 F.3d at 745. Both parties to this action have filed numerous extraneous materials with the Court. The Court has declined to convert See Fed.

Defendants' Motions into motions for summary judgment. R. Civ. P. 12(d).

It, therefore, necessarily has limited its

analysis to matters contained within the CAC and the additional documents referred to in it. See Armengau, 7 F. App'x at 343.

No other materials from any party factored into the Court's analysis. It is inappropriate for a party to attach more than six hundred pages of documents to a pleading to which the opposing parties do not have an opportunity to respond. Lead Plaintiffs'

Motion to File a Consolidated Sur-Reply sought permission to respond to thirty-five cases that the Defendants had not cited previously. (Mem. in Supp. of Pls.' Mot. to File Sur-Reply, at The Court granted Lead Plaintiffs' Motion (See ECF No. 261.) 20 To the extent the

2-3, ECF No. 259-1.) on that basis alone.

materials submitted by Lead Plaintiffs are not cases cited in response to Defendants' prior arguments, the Motion to Strike is GRANTED because Lead Plaintiffs exceeded the leave they sought and were granted. III. CONCLUSION The Motions for Reconsideration are DENIED. Lead

Plaintiffs' Motion to Certify the Judgment under Federal Rule of Civil Procedure 54(b) is DENIED. is GRANTED IN PART. So ordered this 30th day of December, 2010. Defendants' Motion to Strike

s/ Samuel H. Mays, Jr. SAMUEL H. MAYS, JR. UNITED STATES DISTRICT JUDGE

21