Opinion
Cause No. IP 00-0310-C-B/S
May 1, 2002
ENTRY ON DEFENDANTS' MOTION FOR RECONSIDERATION AND MOTION TO CERTIFY ORDER FOR APPEAL UNDER 28 U.S.C. § 1292(b)
Following this Court's February 19, 2002 Entry denying Defendant's Motion to Dismiss, Defendants Symons International Group, Inc., Goran Capital Inc., G. Gordon Symons, Alan G. Symons, and Douglas H. Symons, (referred to collectively as "Symons Defendants") filed a timely Motion to Reconsider or, Alternatively, Certify Order for Appeal Under 28 U.S.C. § 1292(b). In this Motion, Defendants argue that the Court erred in refusing to consider certain documents appended to their Motion to Dismiss and in incorrectly applying the heightened pleading standards for fraud claims under the Private Securities Litigation Reform Act of 1995 ("PSLRA"). For the reasons set out in detail below, we DENY Defendants' Motion to Reconsider and we DENY the Motion to Certify Order for Appeal Under 28 U.S.C. § 1292(b).
Analysis
1. Motion for Reconsideration
Although Defendants have not explicitly cited any Federal Rule of Civil Procedure in the Motion, we presume that because the Motion challenges the substance of our denial of the Motion to Dismiss, it is submitted pursuant to either Rule 59(e) or Rule 60(b). Determining which of these two rules governs this Motion requires attention to the timing of the Motion. "If the motion is served within ten days of the rendition of judgment, the motion falls under Rule 59(e); if it is served after that time, it falls under Rule 60(b)." U.S. v. Deutsch, 981 F.2d 299, 300-01 (7th Cir. 1992). Here, Defendants did not file their Motion for Reconsideration of our February 19, 2002 entry until March 15, 2002. Therefore, because it was filed outside the 10-day window for consideration under 59(e), it must be evaluated under Rule 60(b).
Rule 60(b) permits a district court to relieve a party from a judgment or order on the grounds of mistake, inadvertence, surprise, excusable neglect, newly discovered evidence, fraud, or "any other reason justifying relief from the operation of the judgment." Fed.R.Civ.P. 60(b). Motions under this rule are held to an "exacting" standard, Ball v. City of Chicago, 2 F.3d 752, 760 (7th Cir. 1992), requiring the moving party to base its arguments on one of the six enumerated reasons. Talano v. Northwestern Medical Faculty Foundation, Inc., 273 F.3d 757, 762 (7th Cir. 2001). See also Helm v. Resolution Trust Corp., 43 F.3d 1163, 1166 (7th Cir. 1995) (noting that "Rule 59(e) generally requires a lower threshold of proof than does 60(b)"). Further, Rule 60(b) motions "must be shaped to the specific grounds for modification or reversal found in 60(b) — they cannot be general pleas for relief." Deutsch, 981 F.2d at 301.
In their Motion for Reconsideration, Defendants have not identified which, if any, of the reasons listed in Rule 60(b) justify the Court revisiting its Order on the Motion the Dismiss. Instead, Defendants base their Motion on the contentions that the Court erred in refusing to consider certain public record documents appended to their Motion and incorrectly applied the pleading standard under the PSLRA, which Defendants argue led to an incorrect determination as to Plaintiffs' ability to plead scienter to the required level of specificity. Rule 60(b) does not allow for such substantive reargument of previously adjudicated issues — only the amendment of an order for one of the enumerated reasons. While Defendants may freely reassert such substantive arguments in a Motion for Summary Judgment, such contentions may not properly be addressed on the present Motion. Therefore, Defendant's Motion for Reconsideration is DENIED.
2. Motion to Certify Order for Appeal
Defendant requests that, if the Court declines to reconsider its entry denying the Motion to Dismiss, the Court certify the ruling for interlocutory appeal under 28 U.S.C. § 1292(b). In Ahrenholz v. Board of Trustees of the University of Illinois, 219 F.3d 674, 675 (7th Cir. 2000), the Seventh Circuit recently set forth a straightforward method for determining whether a district court should certify an interlocutory appeal:
There are four statutory criteria for the grant of a section 1292(b) petition to guide the district court: there must be a question of law, it must be controlling, it must be contestable, and its resolution must promise to speed up the litigation. . . . Unless all these criteria are satisfied, the district court may not and should not certify its order to us for an immediate appeal under section 1292(b).
"The party moving for the § 1292(b) interlocutory appeal bears the burden of persuading the court that exceptional circumstances justify departing from the normal course of taking an appeal after entry of final judgment." Smith v. Ford Motor Co., 908 F. Supp. 590, 600 (N.D.Ind. 1995) (citations omitted).
Here, Defendants' arguments in favor of certification attempt, unpersuasively, to address certain of the § 1292(b) criteria. Specifically, they contend that "an immediate appeal from the Entry would materially advance the ultimate termination of the litigation, because whether the complaint fails to satisfy the rigorous pleading requirements of the Reform Act is an issue that Congress intended courts to carefully scrutinize as a threshold matter to avoid subjecting defendants to years of expensive litigation with potentially significant exposure." D's Motion for Reconsideration and to Certify Order for Appeal at 10. Even assuming that Defendants have properly summarized congressional intent underlying the PLSRA, however, because the Complaint also includes claims against PricewaterhouseCoopers and Schwartz Levitsky Feldman, in addition to those against the Symons Defendants, it is not at all clear that an immediate appeal by SLF will advance the ultimate termination of the litigation. Defendants' generalized, conclusory statements cannot establish this necessary element under § 1292(b).
Moreover, the issues that Defendants implore us to certify do not appear to present "questions of law" for which certification is proper. In Ahrenholz v. Board of Trustees of the University of Illinois, 219 F.3d at 676, the court described a "question of law" as "a question of the meaning of a statutory or constitutional provision, regulation, or common law doctrine." Certification, the court reasoned, should be reserved for "pure questions of law," representing "abstract legal issue[s]." Id. at 676-77. The question arises, then, whether the denial of a Motion to Dismiss for failure to properly state a claim presents a "pure question of law" or an "abstract legal issue." A district court in this Circuit recently faced this same question. In Gierum v. Kontrick, 2002 WL 226857 (N.D.Ill. Feb. 14, 2002), the court evaluated under the § 1292(b) interlocutory appeal standard a motion for leave to appeal the bankruptcy court's denial of a motion to dismiss. Applying the Seventh Circuit's reasoning in Ahrenholz, the court found that a denial of a motion to dismiss typically does not turn on a "pure question of law" or an "abstract legal issue," but requires the trier of fact to determine "whether the complaint as filed states a claim upon which relief may be granted." Id. at *3. The court also declined to certify one of the issues raised by the defendant where the defendant failed to suggest anywhere in the motion for leave to appeal that the issue was "complex, unique or `abstract,'" but merely disputed the judge's application of the particular legal doctrine. Id. The court concluded, "To us, this does not constitute a `question of law' that is sufficient to permit an interlocutory appeal." Id.
We find this reasoning persuasive, particularly in light of Defendants' failure to cite Ahrenholz or any other legal authority in support of their Motion to Certify. Defendant does not truly seek clarification of an abstract legal principle, but seeks to dispute the Court's application of the PSLRA's pleading standards to the Complaint in this matter. Such is not a proper subject for certification to the Court of Appeals. Therefore, because Defendants have failed to establish all the necessary elements under § 1292(b) to justify certification of our Order for immediate appeal, we DENY Defendants' Motion to Certify the Order for Appeal under § 1292(b).
Conclusion
Defendant moved for reconsideration of our entry denying Defendants' Motion to Dismiss and, alternatively, for the Court to certify certain issues for interlocutory appeal under 28 U.S.C. § 1292(b). For the reasons set out in detail above, we find that 1) Defendant has not made the necessary showing to justify reconsideration under Rule 60(b); and 2) Defendant has failed to establish the elements necessary to justify certification of an interlocutory order under § 1292(b). Accordingly, we DENY Defendants' Motion for Reconsideration and we DENY Defendants' Motion to Certify the Order for Appeal.
It is so ORDERED