serve only to multiply the issues at play in this action and
would inhibit the SEC from proceeding expeditiously. S.E.C. v.
Credit Bancorp, Ltd., No. 99 Civ. 11395, 2000 WL 301022, at *8
(S.D.N.Y. March 21, 2000).
The SEC moved on April 4, 2000 for reconsideration or, in the
alternative, 1292(b) certification of the March 21 Opinion. This
motion was opposed by Praegitzer, Centigram, the Cole-Hatchard
Intervenors, the Stappas Intervenors (joining in opposition by
Praegitzer and Centigram), and Ray (joining in opposition by
Praegitzer and Centigram).*fn2
Oral argument was heard on May 3, 2000, at which time the
matter was deemed fully submitted.
I. Reconsideration Under Rule 6.3 Is Not Warranted
Local Rule 6.3 provides in pertinent part: "There shall be
served with the notice of motion a memorandum setting forth
concisely the matters or controlling decisions which counsel
believes the court has overlooked." Thus, to be entitled to
reargument and reconsideration, the movant must demonstrate that
the Court overlooked controlling decisions or factual matters
that were put before it on the underlying motion. See Ameritrust
Co. Nat'l Ass'n v. Dew, 151 F.R.D. 237, 238 (S.D.N.Y. 1993);
East Coast Novelty Co. v. City of New York, 141 F.R.D. 245, 245
Local Rule 6.3 is to be narrowly construed and strictly applied
so as to avoid repetitive arguments on issues that have been
considered fully by the court. In deciding a reconsideration and
reargument motion, the court must not allow a party to use the
motion as a substitute for appealing from a final judgment. See
Morser v. A.T. & T Information Systems, 715 F. Supp. 516, 517
(S.D.N.Y. 1989); Korwek v. Hunt, 649 F. Supp. 1547, 1548
(S.D.N.Y. 1986), aff'd, 827 F.2d 874 (2d Cir. 1987). Therefore,
a party may not "advance new facts, issues or arguments not
previously presented to the Court." Morse/Diesel, Inc. v.
Fidelity & Deposit Co. of Md., 768 F. Supp. 115, 116 (S.D.N Y
1991). The decision to grant or deny the motion is within the
sound discretion of the district court. See Schaffer v. Soros,
No. 92 Civ. 1233, 1994 WL 592891, at *1 (S.D.N.Y. Oct. 31, 1994).
The SEC repeats the contention here which it previously made in
opposition to the Intervenors' motions to intervene that the
Court should "limit the participation of the Intervenors to the
asset marshalling, conservation and distribution phases of this
case". The SEC avers that reconsideration is warranted based on
Securities and Exch. Comm'n v. Everest Management,
475 F.2d 1236 (2d Cir. 1972), which the SEC characterizes as "the
controlling precedent in this Circuit."
The March 21 Opinion considered the Everest Management at
some length in reaching its conclusion that permissive
intervention was appropriate under the circumstances of this
case. See Credit Bancorp, 2000 WL 301022, at *9-12. Indeed, the
March 21 Opinion notes specifically that the decision to grant
intervention is consistent with the broad discretion granted to
district courts in handling cases with multiple parties and
claims — discretion which was recognized in Everest Management.
See Credit Bancorp, 2000 WL 301022, at *12. Thus, the Court did
not overlook this case but instead considered and rejected the
SEC's arguments based on that case.
The SEC also contends that the March 21 Opinion did not
consider the "numerous new causes of action" proposed by the
Intervenors in their various proposed complaints.
The specific intervenor complaints were not before the Court at
the time it rendered the March 21 Opinion since these complaints
were filed subsequently. However, the SEC did raise and the Court
did consider the argument that permitting intervention would
result in a logistical nightmare and could impede the SEC in its
prosecution of the enforcement case. See Credit Bancorp, 2000
WL 301022, at *8. The issue of potential complaints in
intervention was encompassed within that prior argument and was
not overlooked by the Court. In addition, as noted below, the
SEC's dire predictions as to how it would be impeded in
prosecuting this case have not yet come to pass. Therefore, the
SEC's motion for reconsideration is denied.
II. Certification Of An Interlocutory Appeal Is Not
The SEC moves in the alternative for certification of the issue
of whether Section 21(g) of the Securities Exchange Act of 1934
prohibits the intervention granted in the March 21 Opinion.
Section 1292(b) provides that a district court may certify an
interlocutory order for appeal if it is of the opinion that (1)
the order "involves a controlling question of law"; (2) "as to
which there is substantial ground for difference of opinion," and
(3) an immediate appeal "may materially advance the ultimate
termination of the litigation". 28 U.S.C. § 1292(b). In
considering a request for certification, the district court must
carefully assess whether each of the three conditions for
certification is met. See German v. Federal Home Loan Mortgage
Corp., 896 F. Supp. 1385, 1398 (S.D.N.Y. 1995); see also
Gottesman v. General Motors Corp., 268 F.2d 194, 196 (2d Cir.
1959) (certification is to be "strictly limited to the precise
conditions stated in the law"). The determination of whether
Section 1292(b) certification is appropriate under the above
standards is in the discretion of the district court. See
Ferraro v. Secretary of U.S. Dept. of Health & Human Services,
780 F. Supp. 978, 979 (E.D.N.Y. 1992); 16 Charles A. Wright,
Arthur R. Miller & Edward H. Cooper, Federal Practice and
Procedure § 3929 (1977 & Supp. 1996).
Interlocutory appeals under Section 1292(b) are an exception to
the general policy against piecemeal appellate review embodied in
the final judgment rule. Since the statute was enacted in 1958,
the Second Circuit has repeatedly emphasized that a district
court is to "exercise great care in making a § 1292(b)
certification." Westwood Pharmaceuticals, Inc. v. National Fuel
Gas Distribution Corp., 964 F.2d 85, 89 (2d Cir. 1992); see
also Klinghoffer v. S.N.C. Achille Lauro, 921 F.2d 21, 25 (2d
Cir. 1990). Certification is only warranted in "exceptional
cases," where early appellate review "might avoid protracted and
expensive litigation." Telectronics Proprietary, Ltd. v.
Medtronic, Inc., 690 F. Supp. 170, 172 (S.D.N.Y. 1987); see also
German, 896 F. Supp. at 1398. Section 1292(b) was not intended
"to open the floodgates to a vast number of appeals from
interlocutory orders in ordinary litigation" Telectronics, 690
F. Supp. at 172, or to be a "vehicle to provide early review of
difficult rulings in hard cases." German, 896 F. Supp. at 1398;
see also Abortion Rights Mobilization, Inc. v. Regan,
552 F. Supp. 364, 366 (S.D.N.Y. 1982); McCann v. Communications
Design Corp., 775 F. Supp. 1506, 1534 (D.Conn. 1991).
The institutional efficiency of the federal court system is
among the chief concerns underlying Section 1292(b). See Forsyth
v. Kleindienst, 599 F.2d 1203 (3d Cir. 1979), cert. denied,
453 U.S. 913, 101 S.Ct. 3147, 69 L.Ed.2d 997 (1981). The
efficiency of both the district court and the appellate court are
to be considered, and the benefit to the district court of
avoiding unnecessary trial must be weighed against the
inefficiency of having the Court of Appeals hear multiple appeals
in the same case. See Harriscom Svenska AB v. Harris
Corp., 947 F.2d 627, 631 (2d Cir. 1991); see generally 16
Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal
Practice and Procedure § 3930 (1996).
In determining whether a controlling question of law exists the
district court should consider whether: reversal of the district
court's opinion could result in dismissal of the action; reversal
of the district court's opinion, even though not resulting in
dismissal, could significantly affect the conduct of the action,
or; the certified issue has precedential value for a large number
of cases. See Klinghoffer, 921 F.2d at 24-25; In re Oxford
Health Plans, Inc., 182 F.R.D. 51, 54-55 (S.D.N.Y. 1998).
Although technically the question of whether there is a
controlling issue of law is distinct from the question of whether
certification would materially advance the ultimate termination
of the litigation, in practice the two questions are closely
connected. See Duplan Corp. v. Slaner, 591 F.2d 139, 148 n. 11
(2d Cir. 1978); Public Interest Research Group of New Jersey,
Inc. v. Hercules, Inc., 830 F. Supp. 1549, 1557 (D.N.J. 1993);
Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal
Practice and Procedure § 3930 (1996).
The SEC urges that the Section 21(g) question is a controlling
issue of law because reversal of the permission to intervene
would significantly affect the conduct of this action by limiting
its complexity and scope. As this Court observed in its March 21
Opinion, however, on the facts of this case the Intervenors are
"likely to have extensive participation in this case whether or
not intervention is allowed". Credit Bancorp, 2000 WL 301022,
at *12. Thus, while reversal of this Court's decision on the
Section 21(g) issue would indeed affect the way in which this
litigation is conducted, it is not at all clear that it would
simplify matters so as to materially advance termination of the
litigation and thus warrant certification under Section
The SEC also assets that certification is warranted due to the
precedential value of this case given the number of SEC
enforcement actions in this circuit. Precedential value, while
certainly something that should be considered, is not in this
Court's view per se sufficient to meet the "controlling issue of
law" standard. Rather, this is a factor the Court should consider
in its analysis. See Klinghoffer, 921 F.2d at 24 (observing
that precedential value is factor to be taken into account but is
not requirement); Oxford, 182 F.R.D. at 54 (observing that some
district courts have held that precedential value alone renders
issue "controlling" but disagreeing with that view and holding it
to be only a factor). The Court has considered this factor and
does not consider it sufficient to warrant 1292(b) certification
in light of the circumstances of this case.
In addition, even assuming arguendo that the Section 21(g)
issue were a controlling issue of law for purposes of 1292(b),
the SEC has not established that there are substantial grounds
for difference of opinion warranting 1292(b) certification. This
Court acknowledged in its March 21 Opinion that "there is
disagreement within the courts concerning the application of
Section 21(g) to intervention motions." Credit Bancorp, 2000 WL
301022, at *8. The fact that there is a some level of
disagreement among the courts does not mean, however, that the
standards of 1292(b) are necessarily satisfied. See, e.g.,
Chalfin v. Beverly
Enterprises, Inc., 745 F. Supp. 1117, 1122 (D.C.Pa. 1990)
(denying 1292(b) certification where five federal courts had
considered the issue and decision in instant case was consistent
with sole court of appeals decision).
In its March 21 opinion this Court scrutinized the statutory
text and canvassed the available authorities and concluded that
"`there is no persuasive authority'" for the proposition that
Section 21(g) bars all intervention in SEC enforcement actions.
Credit Bancorp, 2000 WL 301022, at *9 (citing S.E.C. v.
Prudential Securities Inc. (D.D.C. 1997)). Based on its own
analysis of the text and "the persuasive reasoning of those cases
that have rejected Section 21(g) as an absolute bar to
intervention" the Court concluded that the statute does not bar
intervention in this case. Id. at *9. The Court certainly did
not hold, as the SEC now contends, that there is a substantial
ground for a difference of opinion within the meaning of 1292(b).
Finally, the SEC's insistence that consideration of Everest
Management, 475 F.2d 1236, warrants 1292(b) certification is
misplaced. Everest Management, contrary to the SEC's
contention, is not "controlling precedent" that dictates a
different outcome in this case. It was decided before Section
21(g) was enacted and, moreover, was considered at length by this
Court, after which consideration the Court concluded that the
case did not bar the intervention granted here. See Credit
Bancorp, 2000 WL 301022, at *9-12.
Therefore, the SEC's motion for reconsideration of the March 21
Opinion or, in the alternative, certification of an interlocutory
appeal pursuant to 28 U.S.C. § 1292(b) is denied.
It is so ordered.