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denying plaintiff's motion for reconsideration, as well as a tardy motion to intervene
Summary of this case from Lasala v. Goldman Sachs Co.Opinion
04 Civ. 9237 (SAS).
April 28, 2006
Appearances
For Plaintiff:
Frederick Taylor Isquith, Esq. Daniel W. Krasner, Esq. Alexander H. Schmidt, Esq. WOLF HALDENSTEIN ADLER FREEMAN HERZ LLP New York, NY.
Melvyn I. Weiss, Esq. MILBERG WEISS BERSHAD SCHULMAN LLP New York, NY.
Stanley Bernstein, Esq. BERNSTEIN LIEBHARD LIFSHITZ, LLP New York, NY.
For Defendant Needham Company:
Sarah Schrank Gold, Esq. PROSKAUER ROSE LLP New York, NY.
For Defendant J.P. Morgan Securities, Inc.
David W. Ichel, Esq. Joseph Michael McLaughlin, Esq. SIMPSON THACHER BARTLETT LLP New York, NY.
For Defendant Morgan Stanley
Brant W. Bishop, Esq. Andrew B. Clubok, Esq. Steven A. Engel, Esq. KIRKLAND AND ELLIS LLP Washington, DC.
For Proposed Intervenor Breakaway Solutions, Inc.
H. Laddie Montague, Jr. Daniel Berger Lawrence J. Lederer Charles P. Goodwin Lane L. Vines BERGER MONTAGUE, P.C. Philadelphia, PA.
Steven J. Toll Linda P. Nussbaum Catherine A. Torell COHEN MILSTEIN, HAUSFELD TOLL P.L.L.C. New York, NY.
Additional Liaison Counsel for In re Initial Public Offering Sec. Litig., 21 MC 92 For IPO Litigation Defendants (Underwriters):
Gandolfo V. DiBlasi, Esq. Penny Shane, Esq. SULLIVAN CROMWELL New York, NY.
For IPO Litigation Defendants (Issuers):
Jack C. Auspitz, Esq. MORRISON FOERSTER LLP New York, NY.
OPINION AND ORDER
I. INTRODUCTION
I dismissed this action (" Fatbrain") with prejudice on February 24, 2006. Pursuant to an earlier stipulation between the parties, I have also dismissed 115 separate actions ("LaSala Actions") presenting identical issues. Familiarity with my prior Opinions in this matter is assumed.
See LaSala v. Needham Co., 399 F. Supp. 2d 421 (S.D.N.Y. 2005) (" LaSala I") (issuing stay of proceedings in deference to pending Issuers Settlement of In re Initial Public Offering Sec. Litig., 21 MC 92); LaSala v. Needham Co., 399 F. Supp. 2d 466 (S.D.N.Y. 2005) (" LaSala II") (lifting stay for limited purpose of dismissing plaintiff's complaint with leave to replead); LaSala v. Needham Co., No. 04 Civ. 9237, 2006 WL 452024 (S.D.N.Y. Feb. 24, 2006) (" LaSala III") (lifting stay and dismissing action with prejudice once it became clear that plaintiff could not state a valid claim).
Two post-judgment motions are now pending. First, plaintiff moves for reconsideration and/or to alter and amend the judgment pursuant to, respectively, Local Rule 6.3 of the Southern District of New York and Federal Rule of Civil Procedure 59(e). Second, a bankrupt Issuer known as Breakaway Solutions ("Breakaway") moves to intervene in this action "for the limited purpose of suggesting relief under Federal Rule of Civil Procedure 60(b)." Breakaway seeks to bring to the Court's attention the pendency of a putative class action in Delaware state court that may have tolled some of the claims asserted in the LaSala Actions that were dismissed on statute of limitations grounds.
Memorandum of Law of Breakaway Solutions, Inc. in Support of Its Motion to Intervene for the Limited Purpose of Suggesting Relief Under Fed.R.Civ.P. 60(b) ("Breakaway Mem."), cover page.
For the reasons explained below, both motions are denied. However, in the interests of judicial economy, I will stay the entry of final judgment in every LaSala Action except Fatbrain. There is no reason to force LaSala to file over a hundred separate appeals to protect his rights when he essentially intends to seek review of only one ruling.
II. BACKGROUND
A. Motion for Reconsideration
I have already set forth at some length the factual background of the LaSala Actions, and of the underlying In re Initial Public Offering Securities Litigation ("IPO Litigation"), in previous Opinions. In brief, LaSala is the conditional assignee of certain claims ("Assigned Claims") that the Issuer defendants in the IPO Litigation might have against the Underwriter defendants. The assignment of these claims from the Issuers to a Litigation Trust controlled by the IPO Litigation plaintiffs is part of the consideration for the Issuers Settlement currently awaiting final approval in this Court.
See LaSala III, 2006 WL 452024, at *1-3 (explaining how the LaSala Actions relate to the IPO Litigation); see also In re Initial Public Offering Sec. Litig., 241 F. Supp. 2d 281, 298-321 (S.D.N.Y. 2003) (setting forth the allegations in the IPO Litigation); In re Initial Public Offering Sec. Litig., 226 F.R.D. 186, 191-93 (S.D.N.Y. 2005) (setting forth the terms of the Issuers Settlement, of which the Assigned Claims are a part).
But because of the impending expiration of the statute of limitations applicable to the Assigned Claims, the trustee could not wait until the completion of the approval process of the Issuers Settlement to assert these claims. While most of the fifty-five Underwriters who are defendants in the IPO Litigation entered into tolling agreements with respect to the Assigned Claims, a handful did not. Thus, each settling Issuer effected a conditional assignment to LaSala, who then filed over a hundred separate actions in this Court against the non-tolling Underwriters.
Based on a controlling decision of the New York Court of Appeals in EBC I, Inc. v. Goldman, Sachs Co, the Assigned Claims are largely foreclosed. LaSala's one potentially viable claim was for breach of fiduciary duty, but I held that his claim sounded in law, not equity, and was thus time-barred under the applicable three-year statute of limitations. In any event, LaSala's status as a conditional assignee did not grant him the sort of personal interest in the outcome of his lawsuits necessary to create Article III standing.
5 N.Y.3d 11 (2005).
See LaSala III, 2006 WL 452024, at *5-8. An equitable claim for breach of fiduciary duty would have been timely because New York law applies a six-year statute of limitations to such claims. See id. at *5.
See id.
LaSala's present motion for reconsideration request first, that the Court modify the February 24 Opinion to allow plaintiff to file a third amended complaint if and when the Issuers Settlement is approved, in order to substitute the Litigation Trust as the real party in interest pursuant to Federal Rule of Civil Procedure 17(a); and second, that the Court grant plaintiff's cross-motion for consolidation to streamline the process of appellate review. Notably, LaSala does not ask the Court to reconsider its holding that LaSala failed to state a valid claim.
B. Motion for Intervention
Breakaway's motion for intervention concerns its putative class action, filed on April 2, 2002 in Delaware state court, against the underwriters of its October 1999 IPO — Morgan Stanley, Deutsche Bank Securities, and Lehman Brothers. Many of the claims asserted in that action are similar to those asserted by LaSala. Most relevant to the present motion, the aforementioned underwriters are accused of breaching their fiduciary duty to Breakaway through their conduct of Breakaway's IPO. While I dismissed LaSala's similar claim as time-barred, I noted that it was otherwise viable. And as Breakaway's breach of fiduciary duty claim was not time-barred, it survived a motion to dismiss in the state court action in December 2005.
I note that although Breakaway Solutions is an Issuer defendant in the IPO Litigation, the Issuers Settlement only provides for the assignment of the claims of non-bankrupt Issuers. See In re Initial Public Offering Sec. Litig., 226 F.R.D. at 193 (citation omitted). Thus, Breakaway can pursue its own claims against its underwriters instead of having them assigned to the Litigation Trust.
I previously disclosed that at one time I owned stock in Breakaway. I long ago waived any interest as a settlement class member. See In re Initial Public Offering Sec. Litig., 174 F. Supp. 2d 70, 77 (S.D.N.Y. 2001), aff'd sub nom. In re Certain Underwriter, 294 F.3d 297 (2d Cir. 2002).
See LaSala II, 399 F. Supp. 2d at 475 n. 68.
See Breakaway Solutions, Inc. v. Morgan Stanley Co., No. Civ. A. 19522-NC, 2005 WL 3488497, at *3 (Del.Ch. Dec. 8, 2005).
Breakaway asserts that many Issuers who have agreed to assign their claims to LaSala fall within Breakaway's proposed class definition, which is "issuers who, during the period January 1, 1998 through October 31, 2000 . . . issued IPOs that increased 15% or more in value above their offering price within 30 days following the IPO, for which any of the defendants or their affiliates served as lead or co-lead underwriters pursuant to an underwriting agreement." Thus, Breakaway suggests that the dismissal of the LaSala Actions as to Morgan Stanley may need to be revisited to take account of the "well-established tolling principles" of American Pipe Construction Co. v. Utah. American Pipe tolling permits an absent class member to rely on a pending class action to toll the statute of limitations as to her individual claim, obviating the need for her to file a separate action to guard against the possibility that class certification will eventually be denied.
Breakaway Mem. at 3. Breakaway has not yet filed a class certification motion in the Delaware court.
414 U.S. 538 (1974).
See id. at 554 ("[T]he commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action.").
Breakaway asserts that pursuant to American Pipe, its pending class action may have tolled some Assigned Claims against Morgan Stanley since April 2, 2002, thus calling into question my analysis in LaSala II and LaSala III. If Breakaway is correct, a breach of fiduciary claim brought by LaSala (or, prospectively, by the Litigation Trust) against Morgan Stanley could survive a motion to dismiss if the claim originally belonged to an Issuer that (1) meets the Breakaway class definition; and (2) completed its IPO before April 2, 1999. My dismissal of the Assigned Claims against the other non-tolling Underwriters, and of claims assigned by Issuers not meeting the two criteria set forth above, would not be affected.
Neither Breakaway nor defendants have attempted to catalog the Issuers that would benefit from Breakaway's argument. See Breakaway Mem. at 18 n. 7 (noting that at least twenty-eight Issuers whose claims were assigned to LaSala "appear to qualify" as members of the putative Breakaway class); see also Defendants' Opposition to Motion of Breakaway Solutions, Inc. to Intervene ("Def. Intervene Opp.") at 4 n. 2 ("[d]efendants have not independently reviewed which LaSala actions would be potential members of a Breakaway class").
Morgan Stanley is the only defendant common to any of the LaSala Actions and to Breakaway. The other Breakaway defendants, Deutsche Bank and Lehman Brothers, entered tolling agreements with respect to the Assigned Claims, obviating the need for LaSala to file Actions against them at this time.
Breakaway "does not purport to answer or even address [at this time] in any detail these and other tolling issues which may attend to LaSala's claims against defendant Morgan Stanley." Rather, Breakaway seeks to intervene in order to bring a motion under Rule 60(b) of the Federal Rules of Civil Procedure, which it asserts would be the proper venue to more fully brief the issue. Neither LaSala nor the IPO Litigation plaintiffs take any position on whether Breakaway should be allowed to intervene.
Breakaway Mem. at 13.
See Reply Memorandum of Breakaway Solutions, Inc. in Further Support of Its Motion to Intervene for the Limited Purpose of Suggesting Relief Under Fed.R.Civ.P. 60(b) ("Breakaway Reply") at 7-9 (purporting to demonstrate that there are "substantial, live issues to be litigated").
See generally 4/18/06 Letter from Alexander Schmidt, counsel for LaSala and for the IPO Litigation plaintiffs, to the Court.
III. LEGAL STANDARD
A. Motion for Reconsideration
A motion for reconsideration is governed by Local Rule 6.3 and 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." "A motion for reconsideration may also be granted to `correct a clear error or prevent manifest injustice.'"
In re BDC 56 LLC, 330 F.3d 111, 123 (2d Cir. 2003) (quotation and citation omitted).
In re Terrorist Attacks on September 11, 2001, No. 03 MDL 1570, 2006 WL 708149, at *1 (S.D.N.Y. Mar. 20, 2006) (quoting Doe v. New York City Dep't of Soc. Servs., 709 F.2d 782, 789 (2d Cir. 1983)).
Local Rule 6.3 should be "narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the Court." A motion for reconsideration "is not a substitute for appeal." Courts have repeatedly been forced to warn counsel that 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.'" The purpose of Local Rule 6.3 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.'"
DGM Invs., Inc. v. New York Futures Exch., Inc., 288 F. Supp. 2d 519, 523 (S.D.N.Y. 2003) (quotation omitted). Accord Shrader v. CSX Transp. Inc., 70 F.3d 255, 257 (2d Cir. 1995) (A court will deny the motion when the movant "seeks solely to relitigate an issue already decided.").
RMED Int'l, Inc. v. Sloan's Supermarkets, Inc., 207 F. Supp. 2d 292, 296 (S.D.N.Y. 2002) (quotation omitted).
Joseph v. Manhattan Bronx Surface Transit Operating Auth., No. 96 Civ. 9015, 2006 WL 721862, at *2 (S.D.N.Y. Mar. 22, 2006) (quoting In re Houbigant, Inc., 914 F. Supp. 997, 1001 (S.D.N.Y. 1996)).
Naiman v. New York Univ. Hosps. Ctr., No. 95 Civ. 6469, 2005 WL 926904, at *1 (S.D.N.Y. Apr. 1, 2005) (quoting Carolco Pictures, Inc. v. Sirota, 700 F. Supp. 169, 170 (S.D.N.Y. 1988)).
B. Intervention
A motion to intervene as of right pursuant to Rule 24(a)(2) must be granted if the applicant (1) makes a timely application, (2) has an interest in the action, (3) demonstrates that this interest may be impaired, and (4) shows that the interest is not adequately protected by the existing parties to the action. A proposed intervenor's failure to satisfy any one of these requirements is sufficient cause to deny the motion. "Nevertheless, the test is a flexible and discretionary one, and courts generally look at all four factors as a whole rather than focusing narrowly on any one of the criteria." "Substantially [the factors set forth above] are considered in determining whether to grant an application for permissive intervention pursuant to [Rule 24(b)(2)]."
See Brennan v. New York City Bd. of Educ., 260 F.3d 123, 128-29 (2d Cir. 2001); see also New York News, Inc. v. Kheel, 972 F.2d 482, 485 (2d Cir. 1992).
See Catanzano v. Wing, 103 F.3d 223, 232 (2d Cir. 1996).
Tachiona ex rel. Tachiona v. Mugabe, 186 F. Supp. 2d 383, 394 (S.D.N.Y. 2002) (citation omitted).
In re Bank of N.Y. Derivative Litig., 320 F.3d 291, 300 n. 5 (2d Cir. 2003) (citation omitted).
Rule 24 imposes no particular deadline to file a motion to intervene. Instead, when considering whether an intervention motion is timely, "courts should consider `(1) how long the applicant had notice of the interest before it made the motion to intervene; (2) prejudice to existing parties resulting from any delay; (3) prejudice to the applicant if the motion is denied; and (4) any unusual circumstances militating for or against a finding of timeliness.'" Timeliness is determined from the totality of the circumstances, and this determination is firmly within the district court's discretion.
See, e.g., Dow Jones Co. v. United States Dep't of Justice, 161 F.R.D. 247, 251 (S.D.N.Y. 1995) (no "hard and fast rule defining timeliness").
In re Bank of N.Y. Derivative Litig., 320 F.3d at 300 (quoting United States v. Pitney Bowes, Inc., 25 F.3d 66, 70 (2d Cir. 1994)).
See United States v. Yonkers Bd. of Educ., 801 F.2d 593, 594-95 (2d Cir. 1986); see also Beam v. HSBC Band USA, No. 02-CV-0682E, 2004 WL 944522, at *1 (W.D.N.Y. Mar. 30, 2004) (citation omitted).
IV. DISCUSSION
1. Leave to Amend
A. Motion for Reconsideration
Plaintiff cites one case in support of its argument that the Court erred in dismissing this action with prejudice for lack of standing. In Advanced Magnetics, Inc. v. Bayfront Partners, Inc., the Second Circuit held that the district court erred when it dismissed, for lack of standing, an action brought by a conditional assignee of the claims of the real party in interest, without first allowing the real party in interest to ratify, join or substitute in the action pursuant to Rule 17(a). The Advanced Magnetics court noted that "the complaint's only pertinent flaw was the identity of the party pursuing [otherwise valid] claims, and the proposed amended complaint submitted to the court . . . was, except for naming the [real party in interest] as the plaintiffs on their own claims, virtually identical to the original complaint."
See Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d 11; 18-21 (2d Cir. 1997); see also LaSala III, 2006 WL 452024, at *5 (discussing Advanced Magnetics).
Advanced Magnetics, 106 F.3d at 20.
LaSala asserts that the present situation is similar because substituting the Litigation Trust as the real party in interest would allow the LaSala Actions to proceed despite LaSala's current lack of Article III standing. Thus, he requests leave to amend his Complaint to add the Litigation Trust as the plaintiff "within a reasonable time" after the Court rules on final approval of the Issuers Settlement.
Memorandum in Support of Motion for Reconsideration and to Alter or Amend the Judgment Pursuant to S.D.N.Y. Loc. Civ. R. 6.3 Fed.R.Civ.P. 59(e) ("Pl. Mem.") at 4.
But Advanced Magnetics is obviously inapposite because I also ruled against plaintiff on the merits. LaSala correctly notes that I have been reluctant to dismiss the LaSala Actions purely because the collision of the statute of limitations and the settlement approval process obliged him to assert Assigned Claims against some Underwriters in the conditional manner that precluded a finding of Article III standing. But even if this issue could be deferred or ignored, LaSala has twice failed to state any claim upon which relief can be granted. Thus, plaintiff cannot meet the exacting standard of Local Rule 6.3 because his request to amend his Complaint is not premised on factual matters that I overlooked. To the contrary, my prior Opinions make clear that I was fully aware of the facts surrounding LaSala's standing (or lack thereof).
See LaSala III, 2006 WL 452024, at *4 and n. 55 (noting that although LaSala's failure to state a valid claim obviated the need to consider the issue, principles of Article III standing did not necessarily conflict with a finding that assignment of claims to the Litigation Trust created standing); see also LaSala I, 399 F. Supp. 2d at 428-29 (granting stay when it was possible that jurisdictional defects of LaSala Actions could be eventually solved by assignment of claims to the Litigation Trust); LaSala II, 399 F. Supp. 2d at 471-72 (allowing plaintiffs to replead claims without ruling on standing issue).
LaSala acknowledges that "the Court ruled against Plaintiff on the substantive merits as well," but asserts that the proposed amendment would not be futile because "the merits of this case are complex, and, at least in part, involve the interpretation of a recent decision of the state court of appeals. The relief requested would significantly narrow the issues on appeal, saving the parties much in associated time and costs."
Pl. Mem. at 4.
This argument fails for two reasons. First, it would be improper to allow a patently futile amendment that does not address the substantive defects of the Complaint. Second, even assuming that such an amendment would be proper, LaSala's proposed amendment would not narrow the issues for appeal. Were I to allow the proposed amendment and then dismiss the LaSala Actions solely for failure to state a claim upon which relief can be granted, defendants would still dispute LaSala's Article III standing on appeal. Conversely, if the Second Circuit disagrees with my conclusion that LaSala's claims are not viable, the Second Circuit is perfectly capable of following Advanced Magnetics and allowing another amendment to substitute the real party in interest. For these reasons, LaSala's request to amend his Complaint is denied.
Cf. HealthSouth Rehabilitation Hosp. v. American Nat'l Red Cross, 101 F.3d 1005, 1011-12 (4th Cir. 1996) ("we affirm the district court's refusal to allow HealthSouth to amend its complaint because allowing the amendment would have been futile and would have, at most, delayed the inevitable dismissal of all of HealthSouth's claims against Red Cross.").
2. Consolidation
LaSala previously moved to consolidate each LaSala Action with its corresponding IPO Litigation action, on the theory that the claims asserted by LaSala are properly considered as cross-claims of each Issuer against the relevant Underwriters. Thus, LaSala presented consolidation as a way to cure whatever jurisdictional defects (aside from standing) the Court found with the LaSala actions. Specifically, plaintiff asserted that the Court could use consolidation to assert supplemental jurisdiction over the LaSala Actions and sidestep defendants' challenges to the Court's diversity jurisdiction. Because I dismissed these actions on other grounds, I denied LaSala's motion for consolidation as moot.
For example, the above-captioned litigation, asserting the claims of Issuer Fatbrain.com, would have been consolidated with In re Fatbrain.com IPO Sec. Litig., No. 01 Civ. 10164 (SAS) (filed November 16, 2001).
Defendants had asserted that the conditional assignments to LaSala, a New Jersey resident, were invalid because they were meant solely to create diversity jurisdiction over these state-law claims. Thus, defendants argued that the citizenship of each assignor-Issuer (invariably Delaware or New York corporations) should control, destroying diversity over the LaSala cases.
See LaSala III, 2006 WL 452024, at *8.
Plaintiff now advances a less esoteric reason for granting his consolidation motion: "[t]he costs of filing appeals for the individual, unconsolidated LaSala cases will be tens of thousands of dollars, but the issues to be resolved are identical in every one. Consequently, Plaintiff respectfully requests that the Court vacate the judgment to enter an order consolidating all the cases for the purpose of appeal."
Pl. Mem. at 4. Although the reconsideration motion itself was ambiguous as to the exact nature of the consolidation sought, plaintiff's counsel later clarified that he now requests the same consolidation that was requested before final judgment was entered. See Transcript of March 29, 2006 conference ("3/29 Tr.") at 9 (statement of Stanley Bernstein, counsel for LaSala and Vice Chairman of the Plaintiffs' Executive Committee in the IPO Litigation) (clarifying that LaSala now requests "horizontal consolidation," the "motion . . . that was denied as moot").
LaSala's request would not be an appropriate use of either consolidation or a motion for reconsideration. However, his legitimate concern can be adequately addressed by staying the entry of final judgment in every action except the above-captioned litigation. As I have previously explained, "a court might, in the interest of judicial economy, enter a stay pending the outcome of proceedings which bear upon the case, even if such proceedings are not necessarily controlling of the action that is to be stayed." And while defendants are entitled to prompt resolution of any appeal of my February 24 Opinion that plaintiff wishes to pursue, staying entry of final judgment in all LaSala Actions except this one will prevent the wasteful filing of duplicative appeals.
I note that LaSala's concern is ultimately the concern of the IPO Litigation plaintiffs and the Court. The Assigned Claims are a part of the Issuers Settlement, and money wasted in filing duplicative appeals arguably counts as a settlement-related expense that would have to be reimbursed out of class members' recovery, should the Issuers Settlement be approved.
LaSala I, 399 F. Supp. 2d at 427 (citing Leyva v. Certified Grocers of Cal., 593 F.2d 857, 863-64 (9th Cir. 1979) and Goldstein v. Time Warner N.Y. City Cable Group, 3 F. Supp. 2d 423, 438 (S.D.N.Y. 1998)). Cf. Marshel v. AFW Fabric Corp., 552 F.2d 471, 472 (2d Cir. 1977) (ordering a stay of proceedings pending Supreme Court review of case presenting similar issues).
Defendants originally suggested this course of action. See Def. Intervene Opp. at 3 n. 1; see also 3/29 Tr. at 10-11 (statement of Steven Engel, counsel for Morgan Stanley).
B. Motion for Intervention
Breakaway's motion to intervene must be denied for two reasons. First, the motion is untimely. Although Rule 24 imposes no particular deadline for the filing of a motion to intervene, Breakaway cannot dispute that "among the most important factors in a timeliness decision is `the length of time the applicant knew or should have known of his interest before making the motion.'"
Catanzano, 103 F.3d at 232 (quoting Farmland Dairies v, Commissioner of N.Y. Dep't of Agric., 847 F.2d 1038, 1044 (2d Cir. 1988)).
To the extent that Breakaway believed that this Court's ignorance of the pendency of its lawsuit imperiled its interests, Breakaway should have filed this motion soon after October 11, 2005, which was the first time I dismissed LaSala's breach of fiduciary duty claim on statute of limitations grounds. Breakaway has not adequately explained why it waited to raise this issue until over five months later, after I again dismissed LaSala's breach of fiduciary duty claim on essentially the same grounds. Put another way, Breakaway's rationale for intervention should have been equally apparent to Breakaway upon review of my October 11 Opinion.
See LaSala II, 399 F. Supp. 2d at 475.
Breakaway asserts that its motion is timely because it was filed on March 24, 2006, the deadline for class members to object to, or opt-out from, the Issuers Settlement. See Breakaway Mem. at 10; see also Breakaway Reply at 3. This assertion is a non sequitur, however, as it does not bear on the inquiry as to when Breakaway should have known that its interests may be implicated by the LaSala Actions.
See Yonkers Bd. of Educ., 801 F.2d at 596-97 (post-judgment motion to intervene denied as untimely, when proposed intervenor should have known of its possible interest in the proceeding three months before judgment issued). At the latest, Breakaway was put on notice of its asserted rationale for intervention in December 2005, when the judge presiding over its own case relied in part on LaSala II in analyzing Breakaway's breach of fiduciary duty claim. See Breakaway Solutions, Inc., 2005 WL 3488497, at *3 (noting that LaSala II's reasoning was dictum because the "claim asserted there was time-barred").
Moreover, Breakaway proceeds from the erroneous premise that its motion will not prejudice the defendants. In fact, intervention after final judgment is disfavored precisely because by its very nature "it fosters delay and prejudice to existing parties." Breakaway also misses the point when it suggests that defendants would not be prejudiced because LaSala's motion for reconsideration is pending in any event. That motion is fully briefed and argued, while Breakaway's motion to intervene contemplates an additional round of briefing on the American Pipe tolling issue. Similarly, the fact that the IPO Litigation is still pending against defendants does not mean that undertaking an additional round of briefing would not cause them prejudice. For these reasons, the untimeliness of Breakaway's appearance is by itself sufficient reason to deny its motion to intervene, either as of right or on a permissive basis.
See Breakaway Reply at 2-3 (citing Home Ins. Co. v. Liberty Mut. Ins. Co., No. 87 Civ. 0675, 1990 WL 188925, at *2 (S.D.N.Y. Nov. 20, 1990), which states that "the most significant criterion" in determining timeliness of an intervention motion is absence of prejudice to existing parties).
Farmland Dairies, 847 F.2d at 1044. Accord Buxbaum v. Deutsche Bank AG, 216 F.R.D. 72, 77 (S.D.N.Y. 2003) (prejudice to existing parties in delaying distribution of settlement proceeds justified denial of post-judgment motion to intervene); Home Ins. Co., 1990 WL 188925, at *2 ("an attempt to intervene after final judgment is ordinarily looked upon with a jaundiced eye.").
See Breakaway Reply at 3.
See id. at 7 (noting that Breakaway's present motion merely seeks permission to brief the underlying tolling issues as part of a Rule 60(b) motion).
Second, I am not persuaded that Breakaway has an interest in the LaSala Actions that would be impaired absent intervention, because the American Pipe tolling doctrine does not warrant relief from any judgment already entered in the LaSala Actions. To the extent that LaSala is the assignee of claims of Issuers that qualify as absent class members in Breakaway, he cannot rely on American Pipe tolling to revive his claims against Morgan Stanley because he has already asserted those claims.
See, e.g., Fezzani v. Bear, Stearns Co., 384 F. Supp. 2d 618, 632 (S.D.N.Y. 2004) ("plaintiffs who file separate suits before class certification is determined cannot benefit from the class action's tolling of the statute of limitations"); Wahad v. City of New York, No. 75 Civ. 6203, 1999 WL 608772, at *6 (S.D.N.Y. Aug. 12, 1999) (plaintiff cannot take advantage of American Pipe tolling because "[b]y filing his own lawsuit, plaintiff affirmatively demonstrated his choice not to rely on the class action mechanism").
I also note that Breakaway's proposed Rule 60(b) motion, seeking relief from judgments already entered, has no application to the question of whether American Pipe tolling might be relevant to LaSala Actions yet to be filed against Morgan Stanley, or to Assigned Claims that might be litigated in the future against the other Breakaway defendants, Lehman Brothers and Deutsche Bank. I express no opinion on these questions at this time. I also express no opinion regarding the possibility that LaSala has waived any American Pipe argument even as to LaSala Actions that have not yet been filed. Defendants assert that this waiver occurred when LaSala stipulated that the resolution of issues in Fatbrain (a case where American Pipe tolling cannot even arguably apply) would control the resolution of any LaSala Action: (1) resulting from a conditional assignment from an Issuer; (2) where that Issuer and at least one Underwriter defendant are from the same state; and (3) when the LaSala Action is filed within six years of the Issuer's IPO. See Def. Intervene Opp. at 10-12; see also Stipulation and Order Governing All Present and Future "LaSala" Actions ¶ 2 (setting forth criteria for LaSala Actions governed by the stipulation).
V. CONCLUSION
For the foregoing reasons, plaintiff's motion for reconsideration and Breakaway's motion to intervene are both denied. The judgments previously entered in the actions listed in Appendix I to this Opinion are hereby stayed pending the resolution of any appeal from my February 24, 2006 Opinion and Order in the above-captioned litigation. Separate orders consistent with this Opinion will be contemporaneously entered in the actions listed in Appendix I. The Clerk of the Court is directed to close the pending motions [numbers 48 and 51 on the docket sheet].
On March 22, 2006, I issued an Order clarifying that the motion for reconsideration pending in the above-captioned litigation was deemed to have been also filed in all the other LaSala cases, pursuant to the parties' earlier stipulation. Thus, plaintiff's time to appeal each LaSala Action has been tolled since plaintiff's motion in the above-captioned litigation was filed. See Fed.R.App.P. 4(a)(4)(A) ("If a party timely files in the district court any of the following motions [including a motion to alter or amend the judgment under Rule 59], the time to file an appeal runs for all parties from the entry of the order disposing of the last such remaining motion.").
SO ORDERED.
Appendix I — Actions to be Stayed Pursuant to This Opinion
Entry of final judgment in the following actions is hereby stayed pending resolution of any appeal of my February 24, 2006 Opinion and Order in LaSala (assignee of Fatbrain.com) v. Needham Co., 04 Civ. 9237 (SAS):1. LaSala (as assignee of theGlobe.com) v. J.P. Morgan Sec., 04 Civ. 8957
2. LaSala (Ticketmaster) v. Allen Co., 04 Civ. 9529
3. LaSala (Concur Techs.) v. J.P. Morgan Sec., 04 Civ. 9912
4. LaSala (CBS Marketwatch) v. Morgan Stanley, 05 Civ. 0382
5. LaSala (Covad Communications Group) v. J.P. Morgan Sec., 05 Civ. 0760
6. LaSala (Perot Systems Corp.) v. Morgan Stanley, 05 Civ. 1060
7. LaSala (Pacific Internet Ltd.) v. J.P. Morgan Sec., 05 Civ. 1553
8. LaSala (Modem Media) v. Morgan Stanley, 05 Civ. 1554
9. LaSala (SBCIS/Prodigy Communications) v. Prudential, 05 Civ. 1987
10. LaSala (Verticalnet) v. J.P. Morgan Sec., 05 Civ. 1988
11. LaSala (WebMD Corp.) v. Morgan Stanley, 05 Civ. 1989
12. LaSala (Bottomline Tech.) v. J.P. Morgan Sec., 05 Civ. 2039
13. LaSala (Vignette Corp.) v. Morgan Stanley, 05 Civ. 2243
14. LaSala (Intraware) v. J.P. Morgan Sec. 05 Civ. 2393
15. LaSala (iVillage, Inc.) v. J.P. Morgan Sec., 05 Civ. 2983
16. LaSala (Auto Web.com) v. Morgan Stanley, 05 Civ. 3167
17. LaSala (Autobytel.com) v. Morgan Stanley, 05 Civ. 3222
18. LaSala (Critical Path) v. J.P. Morgan Sec., 05 Civ. 3322
19. LaSala (Ziff-Davis) v. J.P. Morgan Sec., 05 Civ. 3389
20. LaSala (Priceline.com) v. Morgan Stanley, 05 Civ. 3390
21. LaSala (Extreme Networks) v. Morgan Stanley, 05 Civ. 3649
22. LaSala (Net Perceptions) v. J.P. Morgan Sec., 05 Civ. 4075
23. LaSala (Marimba) v. Morgan Stanley, 05 Civ. 4267
24. LaSala (Portal Software) v. J.P. Morgan Sec., 05 Civ. 4431
25. LaSala (Radio One) v. Prudential Equity Group, 05 Civ. 4474
26. LaSala (TheStreet.com) v. J.P. Morgan Sec., 05 Civ. 4573
27. LaSala (Copper Mountain Networks) v. Morgan Stanley, 05 Civ. 4659
28. LaSala (Alloy Online) v. Prudential Equity Group, 05 Civ. 4682
29. LaSala (Redback Networks) v. Morgan Stanley, 05 Civ. 4762
30. LaSala (Brocade Communications) v. Morgan Stanley, 05 Civ. 4955
31. LaSala (F5 Networks) v. J.P. Morgan Sec., 05 Civ. 5291
32. LaSala (High Speed Access Corp.) v. J.P. Morgan Sec., 05 Civ. 5292
33. LaSala (Openware Servs.) v. J.P. Morgan Sec., 05 Civ. 5506
34. LaSala (Overture Servs.) v. J.P. Morgan Sec., 05 Civ. 5665
35. LaSala (Ariba) v. Morgan Stanley, 05 Civ. 5858
36. LaSala (Cybersource) v. J.P. Morgan Sec., 05 Civ. 5859
37. LaSala (Juniper Networks) v. J.P. Morgan Sec., 05 Civ. 5877
38. LaSala (Stamps.com) v. Prudential Equity Group, 05 Civ. 5878
39. LaSala (E-Loan) v. J.P. Morgan Sec., 05 Civ. 6019
40. LaSala (AskJeeves) v. Morgan Stanley, 05 Civ. 6172
41. LaSala (Primus Knowledge Solutions) v. J.P. Morgan Sec. 05 Civ. 6173
42. LaSala (Axeda Systems) v. Prudential Equity Group, 05 Civ. 6454
43. LaSala (Paradyne Networks) v. J.P. Morgan Sec., 05 Civ. 6455
44. LaSala (Audible) v. J.P. Morgan Sec., 05 Civ. 6456
45. LaSala (Drugstore.com) v. Morgan Stanley, 05 Civ. 6625
46. LaSala (NexPrise) v. Morgan Stanley, 05 Civ. 6626
47. LaSala (Net2Phone) v. Morgan Stanley, 05 Civ. 6627
48. LaSala (Internet Initiative) v. Morgan Stanley, 05 Civ. 6916
49. LaSala (Fair Isaac) v. J.P. Morgan Sec., 05 Civ. 7099
50. LaSala (Red Hat) v. J.P. Morgan Sec., 05 Civ. 7135
51. LaSala (Silverstream Software) v. Morgan Stanley, 05 Civ. 7246
52. LaSala (Agile Software) v. Morgan Stanley, 05 Civ. 7353
53. LaSala (Lionbridge Techs.) v. Prudential Equity Group, 05 Civ. 7354
54. LaSala (Wink Communications) v. J.P. Morgan Sec., 05 Civ. 7364
55. LaSala (Netsilicon) v. J.P. Morgan. Sec., 05 Civ. 8029
56. LaSala (Kana Software) v. J.P. Morgan Sec., 05 Civ. 8166
57. LaSala (eGain Communications) v. Prudential Equity Group, 05 Civ. 8224
58. LaSala (Foundry Networks) v. J.P. Morgan Sec., 05 Civ. 8323
59. LaSala (ITXC Corp.) v. J.P. Morgan Sec., 05 Civ. 8325
60. LaSala (Tivo) v. J.P. Morgan Sec., 05 Civ. 8383
61. LaSala (____) v. Morgan Stanley, 05 Civ. 8385
62. LaSala (Visiqor Solutions) v. J.P. Morgan Sec., 05 Civ. 8456
63. LaSala (Digital Insight Corp.) v. Morgan Stanley, 05 Civ. 8456
64. LaSala (Smartdisk Corp.) v. J.P. Morgan Sec., 05 Civ. 8547
65. LaSala (Paragon) v. J.P. Morgan Sec., 05 Civ. 8601
66. LaSala (Women.com) v. Morgan Stanley, 05 Civ. 8734
67. LaSala (WWE) v. J.P. Morgan Sec., 05 Civ. 8860
68. LaSala (Martha Stewart Living) v. Morgan Stanley, 05 Civ. 8863
69. LaSala (Aether) v. Morgan Stanley, 05 Civ. 8900
70. LaSala (BSquare) v. J.P. Morgan Sec., 05 Civ. 8901
71. LaSala (Radio Unica) v. Prudential Equity Group, 05 Civ. 8902
72. LaSala (Naviste) v. J.P. Morgan Sec., 05 Civ. 8975
73. LaSala (Needham) v. J.P. Morgan Sec., 05 Civ. 8976
74. LaSala (Sycamore) v. Morgan Stanley, 05 Civ. 8977
75. LaSala (JNI) v. J.P. Morgan Sec., 05 Civ. 9129
76. LaSala (Intertrust) v. Morgan Stanley, 05 Civ. 9130
77. LaSala (Spanish Broadcasting Corp.) v. Prudential Equity Group, 05 Civ. 9150
78. LaSala (Akami) v. Morgan Stanley, 05 Civ. 9173
79. LaSala (Tickets.com) v. Morgan Stanley, 05 Civ. 9360
80. LaSala (BeFree) v. J.P. Morgan Sec., 05 Civ. 9361
81. LaSala (Wireless Facilities) v. J.P. Morgan Sec., 05 Civ. 9362
82. LaSala (Cobalt Networks) v. J.P. Morgan Sec., 05 Civ. 9363
83. LaSala (Expedia) v. Morgan Stanley, 05 Civ. 9503
84. LaSala (iBasis) v. J.P. Morgan Sec., 05 Civ. 9505
85. LaSala (NextLevel) v. Prudential Equity Group, 05 Civ. 9506
86. LaSala (Telefonica SA) v. J.P. Morgan Sec., 05 Civ. 9626
87. LaSala (Agilent) v. Morgan Stanley, 05 Civ. 9739
88. LaSala (Blue Coat/Cacheflow) v. Morgan Stanley, 05 Civ. 9741
89. LaSala (____) v. Morgan Stanley, 05 Civ. 9742
90. LaSala (SciQuest) v. J.P. Morgan Sec., 05 Civ. 9799
91. LaSala (Mediaplex) v. J.P. Morgan Sec., 05 Civ. 9800
92. LaSala (Digital Impact) v. J.P. Morgan Sec., 05 Civ. 9802
93. LaSala (McAfee) v. Morgan Stanley, 05 Civ. 10125
94. LaSala (Freemarkers/Ariba) v. Morgan Stanley, 05 Civ. 10237
95. LaSala (Airnet) v. J.P. Morgan Sec., 05 Civ. 10238
96. LaSala (Agency) v. J.P. Morgan Sec., 05 Civ. 10301
97. LaSala (El Sitio) v. J.P. Morgan Sec., 05 Civ. 10329
98. LaSala (Caliper) v. J.P. Morgan Sec., 05 Civ. 10379
99. LaSala (Goremote) v. Prudential Equity Group, 05 Civ. 10381
100. LaSala (Trinsic) v. J.P. Morgan Sec., 05 Civ. 10522
101. LaSala (Regent) v. Morgan Stanley, 06 Civ. 555
102. LaSala (Sequenom) v. J.P. Morgan Sec., 06 Civ. 670
103. LaSala (Avanex) v. Morgan Stanley, 06 Civ. 671
104. LaSala (Terabeam) v. J.P. Morgan Sec., 06 Civ. 739
105. LaSala (Buy.com) v. J.P. Morgan Sec., 06 Civ. 957
106. LaSala (Microsoft/Vicinity) v. J.P. Morgan Sec., 06 Civ. 1023
107. LaSala (Nextel Partners) v. Morgan Stanley, 06 Civ. 1076
108. LaSala (ViaNet Works) v. Morgan Stanley, 06 Civ. 1083
109. LaSala (WebMethods) v. Morgan Stanley, 06 Civ. 1084
110. LaSala (Diversa) v. J.P. Morgan Sec., 06 Civ. 1123
111. LaSala (AvenueA) v. Morgan Stanley, 06 Civ. 1231
112. LaSala (Eloquent) v. Morgan Stanley, 06 Civ. 1232
113. LaSala (Apropos Tech.) v. J.P. Morgan Sec., 06 Civ. 1303
114. LaSala (Onvia.com) v. J.P. Morgan Sec., 06 Civ. 1596
115. LaSala (Palm) v. Morgan Stanley, 06 Civ. 1628