The opinion of the court was delivered by: Peter K. Leisure, United States District Judge
This class action under section 10(b) of the Securities and Exchange
Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated
thereunder, arises out of the purchase of common stock of defendant
Sloan's Supermarkets, Inc. ("Sloan's") by a class of investors who bought
the stock at allegedly artificially inflated prices during the period of
January 7, 1993 through June 2, 1994.*fn1 Plaintiffs rely on a "fraud on
the market" theory, alleging that the company's chief executive officer,
defendant John A. Catsimatidis, made materially false and misleading
representations and failed to disclose certain material facts regarding a
Federal Trade Commission ("FTC") antitrust investigation of Sloan's.
Plaintiffs also allege that defendants' conduct constitutes fraud under
state common law.
Pursuant to Rule 59(e) of the Federal Rules of Civil Procedure and
Rule 6.3 of the Local Rules of the United States District Courts for the
Southern and Eastern Districts of New York ("Local Rule 6.3"), defendants
now move for reconsideration of the Court's February 21, 2002 Opinion and
Order granting in part, and denying in part defendants' motion for
summary judgment.*fn2 For the reasons stated below, the motion is
Defendant Sloan's is a publicly traded corporation that operates in the
New York metropolitan area. Defendant Catsimatidis is and has been
chairman of the board, chief executive officer, treasurer and 37%
shareholder of Sloan's since July 28, 1988.*fn3 See RMED Int'l, Inc.,
185 F. Supp.2d at 393. In addition, at all times relevant to this
action, Catsimatidis has been the sole shareholder, president, and chief
executive officer of Red Apple Companies, Inc. ("Red Apple"). See id.
Aware of the FTC investigation of defendant Sloan's and Red Apple since
its initial stages, from 1991 to 1994, defendant Catsimatidis and his
attorneys engaged in discussions with the FTC concerning the possible
divestiture of certain supermarkets by Sloan's and Red Apple. See id. at
396. In addition, from September 1993 through May 1994, Catsimatidis and
Sloan's engaged in negotiations with the FTC, in which the FTC clearly
stated that Sloan's was the target of its inquiry, and demanding
divestiture of certain Sloan's supermarkets. See id.
Nevertheless, between February 28, 1993 and January 14, 1994, Sloan's
communicated with shareholders and made a number of SEC filings without
ever disclosing the existence of the ongoing FTC investigation, including
SEC filings on February 28, 1993; April 9, 1993; August 18, 1993; October
11, 1993; and January 14, 1994. See id. In particular, defendant Sloan's
(under its former name Designcraft), in its annual report to shareholders
as of February 28, 1993, not only failed to disclose the investigation,
but affirmatively stated that Sloan's would "continue to actively seek
additional businesses, preferably within the food industry." Id.
On February 21, 2002, this Court granted defendants' motion for summary
judgment with respect to plaintiffs' state law claim under Article 23-A
of the General Business Law of New York, and for plaintiffs' claim of
breach of fiduciary duty, but denied the motion with respect to the
plaintiffs' claim under Section 10(b) of Securities Exchange Act, and
Rule 10b-5 promulgated thereunder, as well as plaintiffs' claim of fraud
under state common law. See RMED Int'l, Inc., 185 F. Supp.2d at 406.
Defendants now seek reconsideration of this decision, asserting that
their motion for summary judgment should have been granted in its
I. The Motion for Reconsideration Standard
The standard for granting a motion for reconsideration is "strict," and
such a motion will generally will 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." Shrader v. CSX Transp., Inc.,
70 F.3d 255, 257 (2d Cir. 1995). Indeed, the decision to grant or deny a
motion for reconsideration or reargument is in the "`sound discretion of
a district court judge and will not be overturned on appeal absent an
abuse of discretion.'" Davidson v. Scully, 172 F. Supp.2d 458, 462
(S.D.N.Y. 2001) (Leisure, J.) (quoting McCarthy v. Manson, 714 F.2d 234,
237 (2d Cir. 1983)). Local Civil Rule 6.3 "precludes a party from
advancing new facts, issues or arguments not previously presented to the
court." Bank Leumi Trust Co. of N.Y. v. Istim, Inc., 902 F. Supp. 46, 48
(S.D.N.Y. 1995). Moreover, a motion for 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." Davidson, 172 F. Supp.2d at 461.
A motion for reconsideration "is not a substitute for appeal and may be
granted only where the Court has overlooked matters or controlling
decisions which might have materially influenced the earlier decision."
Morales v. Quintiles Transnat'l Corp., 25 F. Supp.2d 369, 372 (S.D.N.Y.
1998) (internal quotations omitted). In determining whether a motion for
reconsideration should be granted, Local Civil Rule 6.3 "should be
narrowly construed and strictly applied so as to avoid repetitive
arguments on issues that have been ...