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Liberty Media Corp. v. Vivendi Universal

April 11, 2012

LIBERTY MEDIA CORPORATION, LMC CAPITAL LLC, LIBERTY PROGRAMMING COMPANY LLC, LMC USA VI, INC., LMC USA VII, INC., LMC USA VIII, INC., LMC USA X, INC., LIBERTY HSN LLS HOLDINGS, INC., AND LIBERTY MEDIA INTERNATIONAL, INC., PLAINTIFFS,
v.
VIVENDI UNIVERSAL, S.A., JEAN-MARIE MESSIER, GUILLAUME HANNEZO, AND UNIVERSAL STUDIOS, INC., DEFENDANTS.



The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J.

OPINION AND ORDER

I. INTRODUCTION

At a conference held on March 7, 2012, I orally (1) granted in part and denied inn part plaintiffs' motion for partial summary judgment on the grounds of collateral estoppel, (2) denied defendants' motion for partial summary judgment against all plaintiffs, and (3) denied defendants' motion for reconsideration of Judge Richard Holwell's February 6, 2012 Memorandum Opinion and Order.*fn1 At that time, I stated that a written opinion would follow.

II. DEFENDANTS' MOTION FOR RECONSIDERATION OF THE FEBRUARY 6, 2012 MEMORANDUM OPINION AND ORDER

Defendants brought this motion for reconsideration of the February 6, 2012 Memorandum Opinion and Order ("SLUSA Opinion").*fn2 In the SLUSA Opinion, Judge Holwell provided the rationale for his March 2, 2009 oral ruling denying defendants' Motion for Partial Judgment on the Pleadings ("SLUSA Motion").For the following reasons, defendants' motion for reconsideration is denied.

A. Legal Standard

Motions for reconsideration are governed by Local Rule 6.3 and are committed to the sound discretion of the district court.*fn3 A motion for reconsideration 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.'"*fn4 A motion for reconsideration may also be granted to "'correct a clear error or prevent manifest injustice.'"*fn5
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.'"*fn6 Local Rule 6.3 must be "narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the Court."*fn7 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.'"*fn8 A motion for reconsideration is not an "opportunity for making new arguments that could have been previously advanced,"*fn9 nor is it a substitute for appeal.*fn10

B. Discussion*fn11

Judge Holwell's decision to deny defendants' SLUSA motion was based on the fact that, after the Court vacated the order consolidating Liberty Media with the class action, the Liberty Media action was no longer a "covered class action" within the meaning of SLUSA.*fn12 First, Judge Holwell's decision to vacate the consolidation order was well within the Court's "inherent power to reconsider and modify its interlocutory orders."*fn13 He properly considered the prejudice caused to Liberty Media by the consolidation order when vacating it because consolidation is a discretionary doctrine.*fn14 Accordingly, there is no reason to reconsider the propriety of de-consolidation.

Second, defendants raise no new arguments in their motion for reconsideration that were not considered in the SLUSA opinion. Judge Holwell considered defendants' argument that de-consolidation could never save state-law claims from a SLUSA dismissal and rejected it.*fn15 He noted that the present tense of SLUSA -- precluding state-law claims where multiple lawsuits "are joined, consolidated, or otherwise proceed as a single action for any purpose"*fn16 -- means that suits not currently consolidated are not properly subject to SLUSA preclusion.Moreover, the effect of vacating a consolidation order "is as if the order never existed," and the parties return "to their original positions."*fn17 Therefore, he concluded that this action is not a "covered class action" within the meaning of SLUSA.

Third, defendants fail to point to any controlling law which compels a contrary result. Defendants rely on Dabit v. Merrill Lynch, Pierce, Fenner & Smith*fn18 for the proposition that "it is absolutely unequivocally clear that if the SLUSA . . . criteria are met, . . . the state claims[] must be dismissed."*fn19 This is undisputed. Rather the question is whether all of the SLUSA criteria, in fact, are met. Additionally, defendants rely on Instituto De Prevision Militar v. Merrill Lynch.*fn20 However, an out-of-circuit decision is not a "controlling decision" sufficient to justify reconsideration. In addition, I note that Instituto De Prevision Militar did not hold that the district court lacked the discretion to de-consolidate. Indeed, there is no indication in the Eleventh Circuit decision that the district court ever considered de-consolidation. Rather, the district court dismissed the case under SLUSA, and the Eleventh Circuit affirmed. Admittedly there is dicta that supports defendants' position that plaintiffs should have objected at the time of consolidation; however, the circumstances of Instituto De Prevision Militar are distinguishablebecause the plaintiff there requested consolidation while a motion to dismiss based on SLUSA was being briefed.*fn21 Here, in contrast, defendants' moved for consolidation, over plaintiffs' objection, nearly five years before raising the SLUSA issue.*fn22

Finally, defendants' request for leave to file an interlocutory appeal is also denied. Such an appeal would significantly delay the trial and the Second Circuit, in denying defendants' petition for a writ of mandamus on this issue, noted that "the issues addressed in the petition can be effectively presented in an appeal from the final judgment."*fn23 In the event defendants successfully appeal this decision, the Second Circuit could simply reverse any judgment on the remaining state law claims.

III. DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT AGAINST ALL PLAINTIFFS

A. Legal Standard

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."*fn24 "'An issue of fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. A fact is material if it might affect the outcome of the suit under the governing law.'"*fn25

"The moving party bears the burden of establishing the absence of any genuine issue of material fact."*fn26 "When the burden of proof at trial would fall on the nonmoving party, it ordinarily is sufficient for the movant to point to a lack of evidence to go to the trier of fact on an essential element of the non-movant's claim."*fn27 In turn, to defeat a motion for summary judgment, the non-moving party must raise a genuine issue of material fact. To do so, the non-moving party "'must do more than simply show that there is some metaphysical doubt as to the material facts,'"*fn28 and "'may not rely on conclusory allegations or unsubstantiated speculation.'"*fn29

In deciding a motion for summary judgment, a court must "'construe the facts in the light most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable inferences against the movant.'"*fn30 However, "'[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.'"*fn31

"'The role of the court is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried.'"*fn32

B. Background*fn33

On December 16, 2001, the parties executed an Agreement and Plan of Merger and Exchange ("Merger Agreement"), which involved, in part, a commitment for Liberty Media to exchange its multiThematiques shares for Vivendi securities, namely American Depository Shares ("ADSs").*fn34 On that date, Robert Bennett, Liberty Media's CEO, signed the Merger Agreement in Colorado on behalf of Liberty Media and faxed his signature page to New York.*fn35 Another signatory, Jean-Marie Messier, Vivendi's CEO, was in New York on December 17, 2001 to announce the merger,*fn36 ...

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