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In re Facebook, Inc., Ipo Securities and Derivative Litigation

United States District Court, S.D. New York

February 11, 2014


Vincent R. Cappucci, Esq., Jordan A. Cortez, Esq., Evan T. Raciti, Esq., Marc X. LoPresti, Esq., ENTWISTLE & CAPPUCCI LLP, New York, NY, Attorne for the NASDAQ Securities Actions

Michael G. McLellan, Esq., Douglas G. Thompson, Jr., Esq., FINKELSTEIN THOMPSON LLP, Washington, DC, Christopher Lovell, Esq., Victor E. Stewart, Esq., LOVELL STEWART HALEBIAN JACOBSON LLP, New York, NY, Jacob H. Zamansky, Esq., Edward H. Glenn, Jr., Esq., Kevin D. Galbraith, Esq., ZAMANSKY & ASSOCIATES LLC, New York, NY, Kevin I. Goldberg, Esq., GOLDBERG, FINNEGAN & MESTER, LLC, Silver Spring, Maryland, Marvin A. Miller, Esq., Andrew Szot, Esq., MILLER LAW LLC, Chicago, IL, Vincent DiTommaso, DITOMMASO LUBIN, Oakbrook Terrace, IL, Thomas J. McKenna, Esq., Gregory D. Egleston, Esq., GAINEY MCKENNA & EGLESTON, New York, NY, Richard J. Schager, Jr., Esq., Andrew R. Goldenberg, Esq., STAMELL & SCHAGER, LLP, New York, NY, William A. Slaughter, Esq., Paul Lantieri, III, Esq., Stephen J Kastenberg, Esq., BALLARD SPAHR LLP, Philadelphia, PA, Attorne for NASDAQ Defendants.


ROBERT W. SWEET, District Judge.

Pursuant to the trans order from the United States Judicial Panel on Multidist ct Litigation (the "MOL Panel"), entered on October 4, 2012, 41 actions stemming from the May 18, 2012 initial public offering ("IPO") of Facebook, Inc. ("Facebook") are presently befores Court.

The instant motion relates to the class actions against NASDAQ Stock Market LLC (the "Exchange"), its parent, the NASDAQ OMX Group, Inc. ("NASDAQ OMX, " collect ly with the Exchange, "NASDAQ"), Robert Greifeld, NASDAQ OMX's Chief Executive Officer ("Greifeld"), and Anna M. Ewing, NASDAQ OMX's highest-ranking technology officer ("Ewing") (collectively, "Defendants"). Defendants move the Court to a or amend the Opi on and Order ente on December 16, 2013 (the "December 16 Opinion"), which deni in part Defendant' motion to dismiss the complaint, to include a certification for int ocutory appeal under 28 U.S.C. § 1292 (b).

For the reasons set forth below, Defendants' motion is denied.

Prior Proceedinqs & Facts

Familiarity with general background of this case and prior litigation between the parties is assumed and set forth in the December 16 Opinion. In re Facebookr Inc. r IPO Securities and Derivative Litigation, 2013 WL 6621024 (S.D.N.Y. Dec. 16, 2013). Certain facts and allegations are repeated in part as relevant to the issues presented by the instant motion.

On June 25, 2013, the NASDAQ aimant Group moved this Court for an order partially lifting the discovery stay imposed under Section 21D(b) (3) (8) of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4 (b) (3) (8)(the "PSLRAIf), to obtain limited discovery consisting of documents and testimony that NASDAQ, and any of their affiliates, parents, subsidiaries, agents and/or employees, provided to the SEC in connection with the SEC's investigation into the May 18, 2012 initial public offering ("IPOff) of Facebook, and for leave to amend the Consolidated Amended Class Action Complaint ("CAC"), incorporating relevant facts adduced from the request discovery materials or alternatively from the SEC Order.

On July 2, 2013, Defendants filed a motion to dismiss Plaintiffs' negligence and federal ies claims alleged in the CAC. These motions were heard and marked fully submitted on October 3, 2013.

In the December 16 Opinion, Defendants' motion to dismiss was denied in rt and granted in part; Plaintiffs' request to lift the PSLRA discovery stay was rende moot by the Opinion; and Plaintiffs' motion to amend was granted part and denied in part.

On December 30, 2013, Defendants advised the Court of their intention to appeal the Court's Order entered December 16, 2013, pursuant to 28 U.S.C. § 1291, insofar as that Order addressed NASDAQ's immunity from the aims asserted by Plaintiffs. As not in the December 16 Opinion, the immuni rulings are appealable as of right under the collateral order doctrine and divest the Court of juris ction while the appeal is pending. See, e.g., Mitch v. Forsyth, 472 U.S. 511, 526 (1985); Bradley v. Jusino, 2009 WL 403891 (S.D.N.Y. May 18, 2009). Defendants simultaneously advised the Court of their intention to file a motion pursuant to 28 U.S.C. § 1292(b) to certi other aspects of the Court's December 16, 2013 decision for interlocutory appeal. To avo any possibly uncertainty over the Court's ability to hear the 28 U.S.C. § 1292(b) motion, Defendants requested an extension of time to file 28 U.S.C. § 1291 till February 14, 2013 so that 28 U.S.C. § 1292(b) motion could be considered.

Defendants filed their 28 U.S.C. § 1292(b) motion on December 30, 2013. This motion was heard and marked fully submitted on February 3, 2013.

I. The Applicable Standard

section 1292(b) provides r certification of an order for interlocutory appeal when the court determines: "(I) such order involves a controlling question of (2) as to which there is a substantial ground for difference of opinion and (3) that an immediate appeal from [that] order may materially advance the ultimate termination of the liti tion." 28 U.S.C. § 1292(b). "These three prerequisites create a significant hurdle to certification, and the barrier is only elevated by the mandate that section 1292(b) be strictly limited' because only exception circumstances [will] justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment.'" McNeil v. Aguilos, 820 F.Supp. 77, 79 (S.D.N.Y. 1993) (Sotomayor, J.). "[E]ven where the three legis ive teria of section § 1292(b) appear to be met, district courts reta un ered dis ion to deny certif ion' if other factors counsel against it." Transp. Workers Union of Am., Local 100 v. NYC Transit Auth., 358 F.Supp.2d 347, 351 (S.D.N.Y. 2005) (internal citations omitted). The proponents of an erlocutory appeal have the burden of showing that all three of the substantive criteria are met. See Casey v. Long Island R.R., 406 F.3d 142, 146 (2d C. 2005).

The Second Circuit has held that "interlocutory appeals are strongly disfavored in federal practice, " and movants cannot invoke the appellate process "as a vehicle to provide early review [even] of difficult rulings in hard cases, " In re Adelphia Commc'ns Corp., 2008 WL 361082, at *1 (S.D.N.Y. Feb. 7, 2008). strict Courts must accordingly "exercise great care in making a § 1292(b) certification, " Wausau Bus. Ins. Co., 151 F.Supp.2d at 491-92 (cititing Westwood Pharm., Inc. v. Nat'l Fuel Gas Dist. Corp., 964 F.2d 85, 89 (2d r.1992)), ensuring that § 1292(b) "be strictly construed." Wausau Bus. Ins. Co. v. Turner Constr. Co., 151 F.Supp.2d 488, 491 (S.D.N.Y. 2001) (internal quotations marks and citations omitted); see also In re Ambac Fin. Grp. Sec. Litig., 693 F.Supp.2d 241, 282 (S.D.N.Y. 2010) (certification of a non final order pursuant to 28 U.S.C. § 1292(b) is an extraordinary procedure only granted in "exceptional circumstances."); Lidle v. Cirrus Design Corp., 2010 WL 4345733, *1 (S.D.N.Y. Oct. 29, 2010) ("[T]he power to grant an locutory appeal must strictly limited to the precise tions stated in the law.... [o]nly exceptional circumstances will justify a departure from the basic policy of postponing late review until after the entry of a final judgment.").

II. Defendants' Fail to Satisfy the High Threshold Required for Certification of an Order for Interlocutory Appeal

Defendants maintain a certification for interlocutory appeal is with respect to two issues in December 16 Opinion: (1) whether the economic ss doctrine bars Plaintiffs' common law negligence cIa and (2) whether Plaintiffs' federal securities claim is ent 1 to the sumption of reliance est ished in Affiliated Ute Citizens of Utah v. United States, 406 U.S. 129 (1972).

As an initi matter, this is not an "exceptional" case. The Second Circuit regularly denies interlocutory appeals at such preliminary stages where, as here, appeal "at most could lead only to a remand for repleading, with possibilities of further interlocutory appeals thereafter.'" In re Manhattan Inv. Fund Ltd., 288 B.R. 52, 56 (S.D.N.Y. 2002); see also Republic Tobacco Co. v. N. Atl. Trading Co., Inc., 381 F.3d 717, 728 (7th Cir. 2004) (interlocutory appeal is not intended as a "second bite at the apple uthat allows the moving party to reargue issues that the court has already addressed and rejected). Further, though a motion for certification may not be used to simply "repeat arguments made in a motion to dismiss, " Defendants' motion consists entirely of assertions and precedent ...

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