Monroe Cnty. Employees' Ret. Sys. ex rel. Situated v. S. Co.
Decision Date | 10 August 2018 |
Docket Number | CIVIL ACTION FILE NO. 1:17-CV-241-MHC |
Citation | 333 F.Supp.3d 1315 |
Parties | MONROE COUNTY EMPLOYEES' RETIREMENT SYSTEM, and Roofers Local 149 Pension Fund, Individually and on Behalf of All Others Similarly Situated, Plaintiffs, v. The SOUTHERN COMPANY, Thomas A. Fanning, Art P. Beattie, Edward Day, VI, G. Edison Holland, Jr., John C. Huggins, and Thomas O. Anderson, Defendants. |
Court | U.S. District Court — Northern District of Georgia |
Daniel S. Drosman, Pro Hac Vice, Darryl J. Alvarado, Austin P. Brane, Darryl J. Alvarado, Henry Rosen, Pro Hac Vice, Rachel A. Cocalis, Regis C. Worley, Jr., Scott H. Saham, Pro Hac Vice, Daniel S. Drosman, Robbins Geller Rudman & Dowd, LLP, San Diego, CA, John C. Herman, Robbins Geller Rudman & Dowd, LLP, Atlanta, GA, Thomas C. Michaud, Vanoverbeke Michaud & Timmony, P.C., Detroit, MI, for Plaintiffs.
Kristin Murphy, Michele Johnson, Latham & Watkins, Costa Mesa, CA, Sarah A. Tomkowiak, William R. Baker, III, Pro Hac Vice, Latham & Watkins, Washington, DC, Ashley Heintz, Michael Joseph McConnell, Robert Watts, Walter W. Davis, Jones Day, Atlanta, GA, for Defendants.
This matter is before the Court on Defendants' Motion for Reconsideration [Doc. 51] ("Mot. for Recons."), and Motion for Certification and Stay Pending Appeal [Doc. 57] ("Mot. for Interlocutory Appeal"). Defendants' Motion for Reconsideration focuses on four aspects of this Court's analysis of scienter in its Order dated March 29, 2018 [Doc. 43] (the "March 29 Order"). In the event the Court denies or otherwise declines to rule on Defendants' Motion for Reconsideration, Defendants also have moved the Court to certify this case for interlocutory appeal.
In the March 29 Order, this Court granted in part Defendants' Motion to Dismiss, finding, inter alia , that eleven of the thirty-seven statements upon which Plaintiffs' claims are based (Statement Nos. 1-2, 4, 7, 13, 21-22, 27, 32, 34, and 36) are forward-looking statements accompanied by sufficient cautionary language so that they are protected by the Private Securities Litigation Reform Act ("PSLRA") safe harbor provision and not actionable as a matter of law. March 29 Order at 15-50 (citing 15 U.S.C. § 78u-5(c) ). With regard to the remaining twenty-six statements identified in the Complaint, Defendants made the following six discrete arguments attacking the sufficiency of elements of Plaintiffs' allegations of scienter: (1) Plaintiffs' motive allegations are implausible, (2) the absence of insider stock sales allegations undercuts an inference of scienter, (3) Plaintiffs' "positions and responsibilities" allegations do not support scienter, (4) Plaintiffs' witness allegations are not credible or sufficient to support scienter, (5) Plaintiffs' allegations of Defendants' directives regarding public communications did not support scienter, and (6) allegations related to post-class events did not support scienter.2 See Defs.' Mem. of Law in Supp. of Defs.' Mot. to Dismiss [Doc. 37-1] () .
Because it bears directly on Defendants' Motion for Reconsideration, it is important to note what Defendants did not argue in their motion to dismiss:
In the March 29 Order, the Court addressed the arguments Defendants did raise in their Motion to Dismiss and found that Plaintiffs' motive allegations were "logical, plausible, and support an inference of scienter." March 29 Order at 63. With regard to Defendants' argument that the absence of insider trading allegations undercuts an inference of scienter, the Court found that the absence of such allegations in this case, considering the facts alleged collectively, was not dispositive and did not preclude an inference of scienter. Id. at 64-66. The Court thoroughly examined Plaintiffs' allegations regarding the individual defendants' positions, responsibilities, and access to information allegations and found that, accepting the allegations as true and drawing all reasonable inferences in Plaintiffs' favor, the allegations supported an inference of scienter as to Defendants Day, Anderson, and Huggins, but did not support an inference of scienter as to Defendants Holland, Fanning, and Beattie. Id. at 67-81. The Court rejected Defendants' argument that the witness accounts alleged in the Complaint were not credible and considered them as a part of the cumulative view of all of the allegations and inferences in its analysis of scienter. Id. at 81-83. Accepting Plaintiffs' allegations as true and drawing reasonable inferences in Plaintiffs' favor, the Court also found that the evidence that Defendant Day gave directives limiting public communication supported an inference of scienter. Id. at 83-84.
The Court then summarized its findings with regard to scienter as follows:
This Court concludes that the allegations in Plaintiffs' Complaint create a strong inference (i.e. a cogent and compelling one) that the certain individual Defendants orchestrated the fraud, knew about it, or were severely reckless in not knowing about it. Taking the well-pleaded allegations and reasonable inferences drawn from those allegations as true, and viewing them collectively, this Court concludes that Plaintiffs have adequately pleaded a strong inference of scienter as to Defendants Day, Huggins, and Anderson. The allegations in the Complaint do not support a strong inference of scienter as to Defendants Fanning, Beattie, and Holland, who are DISMISSED as individual Defendants.
Id. at 84-85.5 The Court viewed all of the allegations and reasonable inferences drawn from those inferences collectively in a light most favorable to Plaintiffs. No one factor was dispositive and the Court was careful to weigh the fact that there was an absence of insider trading allegations (the only adverse inference Defendants referenced in their briefing) against a finding of scienter.
It is this Court's analysis of scienter that is the subject of Defendants' Motion for Reconsideration. Specifically, Defendants contend that the Court erred in its application of the scienter standard in the following four respects:
See Defs.' Mem. of Law in Supp. of Defs.' Mot. for Recons. [Doc. 51-1] () .
Alternatively, if the Court decides against Defendants on their Motion for Reconsideration, Defendants have moved for a certification for interlocutory appeal on the following two questions:
"The Court does not reconsider its orders as a matter of routine practice." Belmont Holdings Corp. v. SunTrust Banks, Inc., 896 F.Supp.2d 1210, 1223 (N.D. Ga. 2012) (citing LR 7.2E, NDGa.). Under the Local Rules of this Court, "[m]otions for reconsideration shall not be filed as a matter of routine practice[,]" but only when "absolutely necessary." LR 7.2E, NDGa. Such absolute necessity arises only when there is "(1) newly discovered evidence; (2) an intervening development or change in controlling law; or (3) a need to correct a clear error of law or...
To continue reading
Request your trial-
Kang v. Mayor & Aldermen of City of Savannah
... ... the City or its employees. [ 5 ] (Doc. 37, Attach. 1 at 5.) In response, ... Jimenez v. Wellstar Health Sys. , 596 F.3d 1304, 1312 ... (11th Cir. 2010) ... rights." Dickerson v. Alachua Cnty. Comm'n , ... 200 F.3d 761, 767 (11th Cir ... power to utilize." Holloman ex rel. Holloman v ... Harland , 370 F.3d 1252, ... answering these questions. Monroe Cnty. Emps.' Ret ... Sys. v. S. Co. , 333 ... ...
-
Equal Emp't Opportunity Comm'n v. St. Joseph's/Candler Health Sys.
... ... or discharge of employees, ... and other terms, conditions, and ... Dekalb Cnty ... Sch. Dist., 145 F.3d 1441, 1449 (11th ... Cir. 1998); see, e.g., Brogdon ex rel. Cline v. Nat'l ... Healthcare Corp., 103 ... parties, ” Monroe Cnty. Employee's Ret. Sys. v ... S. Co., ... ...
-
Parker v. Exterior Restorations, Inc.
... ... 53 at 6 ... (quoting Monroe County Employees' Retirement System ... v ... ...
-
Monroe Cnty. Employees' Ret. Sys. v. S. Co., CIVIL ACTION NO: 1:17-cv-00241-WMR
..."exceedingly well-built and well organized," reaching specific component milestones, and would be completed by the May 2014 COD.2 Monroe Cty. Emps.' Ret. Sys. v. S. Co., No. 1:17-CV-241-MHC, 2018 WL 1558577, at *7-*23 (N.D. Ga. Mar. 29, 2018); see also ¶¶116, 118-119, 122-123, 125-127, 130,......