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Case 1:11-cv-00733-WHP Document 167 Filed 08/28/12 Page 1 of 8

individually and on behalf of all others similarly




11 Civ. 733 (WHP)






WILLIAM H. PAULEY III, District Judge:

Lead Plaintiff Pennsylvania Public School Employees' Retirement System

("Plaintiff') brings this putative securities class action lawsuit against Bank of America

Corporation ("BoA"), current and past officers and directors of BoA, twenty-seven underwriters,

and PricewaterhouseCoopers LLP. By Memorandum & Order dated July 11,2012 (the "July

2012 Memorandum & Order"), this Court dismissed all defendants except BoA from this action

and granted Plaintiff leave to replead its claims against the current and past officers and

directors. BoA moves for reconsideration, or, in the alternative, to certify an interlocutory appeal

pursuant to 28 U.S.C. § 1 292(b). For the following reasons, BoA's motion is denied.


This Court's July 2012 Memorandum & Order sets forth the allegations

underlying this action. See Pa. Public Sch. Emps' Ret. Sys. v. Bank of Am. Corp., --- F. Supp.

2d ----, No. 11 Civ. 733 (WHP), 2012 WL 2847732, at *1-4 (S.D.N.Y. July 11,2012). On


Case 1:11-cv-00733-WHP Document 167 Filed 08/28/12 Page 2 of 8

August 13,2012, Plaintiff filed its Amended Consolidated Class Action Complaint ("Amended

Complaint"). By letter dated August 23,2012, BoA requested a pre-motion conference in

contemplation of a motion to dismiss the Amended Complaint. (ECF No. 166).

I. Reconsideration


As a preliminary matter, the parties dispute whether Plaintiffs Amended

Complaint moots BoA's motion for reconsideration. See e.g., Meserole v. Sony Corp. of Am.,

08 Civ. 8987 (RPP), 2009 WL 2001451, at *1 (S.D.N.Y. July 8, 2009); Mintz v. Baron, No. 05

Civ. 4904 (LTS), 2009 WL 735140, at * 1 (S.D.N.Y. Mar. 20, 2009). This Court need not decide

that issue, because even assuming the motion is not moot, it nonetheless fails on its merits.

"A motion for reconsideration under Local Rule 6.3 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." Panchishak v. U.S. Dep't of Homeland Sec., No. 08 Civ. 6448 (WHP), 2010 WL

4780775, at *1 (S.D.N.Y. Nov. 22,2010) (internal quotation marks omitted) (quoting Shrader v.

CSX Transp., Inc., 70 F.3d 255,257 (2d Cir. 1995)), affd, 446 F. App'x 361 (2d Cir. 2011). "It

is implicit in this language that a motion for reconsideration cannot assert new arguments or

claims which were not before the court on the original motion and consequently cannot be said to

have been considered." Koehler v. Bank of Bermuda Ltd., No. M18-302 (CSH), 2005 WL

1119371, at *1 (S.D.N.Y. May 10,2005); see also Panchishak, 2010 WL 4780775, at *1.

"Reconsideration is not an invitation for parties to 'treat the court's initial decision as the


Case 1:11-cv-00733-WHP Document 167 Filed 08/28/12 Page 3 of 8

opening of a dialogue in which that party may then use such a motion to advance new theories or

adduce new evidence in response to the court's rulings.'" Panchishak, 2010 WL 4780775, at * 1

(quoting De Los Santos v. Fingerson, No. 97 Civ. 3972 (MBM), 1998 WL 788781, at *1

(S.D.N.Y. Nov. 12, 1998)). "The standard for reconsideration is strict and the decision is within

the sound discretion of the district court." Robbins v. H.H. Brown Shoe Co., Inc., No. 08 Civ.

6885 (WHP), 2009 WL 2496024, at *1 (S.D.N.Y. July 22.2009) (internal quotation marks

omitted); see also Colodney v. Continuum Health Partners, Inc., No. 03 Civ. 7276 (DLC). 2004

WL 1857568, at *1 (S.D.N.Y. Aug. 18,2004).

BoA argues that the Court mistakenly found that Plaintiff adequately alleged

corporate scienter. To allege that a corporate entity acted with scienter, a plaintiff must plead

facts that "create a strong inference that someone whose intent could be imputed to the

corporation acted with the requisite scienter." Teamsters Local 445 Freight Div. Pension Fund v.

Dynex Capital Inc., 531 F.3d 190, 195 (2d Cir. 2008). "[T]he most straightforward way to raise

such an inference for a corporate defendant will be to plead it for an individual defendant."

Dynex, 531 F.3d at 195. "But it is possible to raise the required inference with regard to a

corporate defendant without doing so with regard to a specific individual defendant." Dynex,

531 F.3d at 195. This Court concluded that Plaintiff alleged sufficient facts to plead that BoA

acted with scienter, although Plaintiff failed to allege scienter as to any specific individual

defendant. Dynex, 531 F.3d at 195. BoA claims that in coming to this conclusion, this Court

overlooked Dynex and Janus Capital Group, Inc. v. First Derivative Traders, 131 S. Ct. 2296

(2011). Specifically, BoA contends that Dynex and Janus impose an additional requirement that

the Court ignored: that an individual whose scienter is imputed to BoA must also be the "maker"


Case 1:11-cv-00733-WHP Document 167 Filed 08/28/12 Page 4 of 8

of the false or misleading statement at issue. According to BoA, this Court erred because

Plaintiff fails to allege that anyone whose scienter is imputed to BoA also made misstatements or


This Court relied on Dynex in its July 2012 Memorandum & Order and did not

overlook it. See Pa. Pub. Sch. Emps.' Ret. Sys., 2012 WL 2847732, at *8-9. To the extent that

BoA argues that this Court misconstrued Dynex, BoA advances new arguments that "cannot be

said to have been considered." Koehler, 2005 WL 1119371, at *1. Indeed, BoA acknowledges

that it did not previously address the corporate scienter issue. But BoA cannot use this motion as

a vehicle to advance new theories, and its argument concerning Dynex is unavailing. See

Panchishak, 2010 WL 4780775, at *1; see also Koehler, 2005 WL 1119371, at *1.

Moreover, BoA's cramped reading of Dynex eviscerates that holding, which does

not require a plaintiff to identify a specific individual within a corporation who acted with

scienter. Dynex, 531 F.3d at 195 ("It is possible to draw a strong inference of corporate scienter

without being able to name the individuals who concocted and disseminated the fraud." (internal

alterations and quotation marks omitted)).

BoA's contention that this Court overlooked the effect of Janus on Dynex also

fails. BoA claims that Janus reinforces its reading of Dynex that Plaintiff must plead that the

individual whose knowledge is imputed to BoA also made the statements at issue. But Janus

does not concern corporate scienter. Rather, Janus addresses what it means to "make" a

statement for purposes section lO(b) of the Securities Exchange Act of 1934 and Rule IOb-5

promulgated thereunder. See Janus, 131 S. Ct. at 2306. And there is no dispute that BoA,

through its various public filings, "made" the statements and omissions at issue in this action. In


Case 1:11-cv-00733-WHP Document 167 Filed 08/28/12 Page 5 of 8

any event, BoA's attempt to spin Janus into controlling authority also represents a new argument

that is inappropriate to support its motion for reconsideration.

Finally, BoA attacks three factual bases that the Court relied on in finding that

Plaintiffs had alleged scienter: (1) that a BoA vice president and assistant vice president robo­

signed affidavits and other documents (Consolidated Class Action Complaint ("Compl.") ~ 83);

(2) that senior managers knew of significant discrepancies between computer generated and hand

calCulated amortization schedules (Compl. ~ 120); and (3) counsel for BoA sent a letter to the

FCIC discussing a great decline in the value of subprime mortgages (the "FCIC letter") (Compl.

~ 101). As to the first two factual bases, BoA relies on its revised interpretation of Dynex and

Janus. Specifically, BoA asserts that Plaintiff did not plead that the vice president, assistant vice

president, and senior managers made any material misstatements or omissions. Because the

legal arguments undergirding this criticism are new, BoA's motion for reconsideration on those

grounds is denied in this regard.

As for BoA's critique of this Court's reliance on the FCIC letter, BoA notes that

this Court stated incorrectly that BoA's "general counsel" sent the letter, when in fact BoA's

outside counsel sent it. However, that misstatement is inconsequential because it is reasonable to

infer that someone in BoA's management authorized the FCIC letter. See Grandon v. Merrill

Lynch & Co., 147 F.3d 184, 188 (2d Cir. 1998) (drawing all inferences in favor of plaintiff on

motion to dismiss). Moreover, all "of the facts alleged, taken collectively, give rise to a strong

inference of scienter" on the part of BoA. Tellabs Inc. v. Makor Issues & Rights, Ltd., 551 U.S.

308,323 (2007). Accordingly, BoA's motion for reconsideration on this ground is denied as



Case 1:11-cv-00733-WHP Document 167 Filed 08/28/12 Page 6 of 8

II. Interlocutory Appeal

A court may certify an order for interlocutory appeal when "such order

involves a controlling question oflawas to which there is substantial ground for difference of

opinion and that an immediate appeal from the order may materially advance the ultimate

termination of the litigation." 28 U.S.C. § 1292(b). "[T]he mere presence of a disputed issue

that is a question of fIrst impression, standing alone, is insuffIcient to demonstrate a substantial

ground for difference of opinion." In re Flor, 79 F Jd 281, 284 (2d Cir. 1996). "Such an appeal

is limited to extraordinary cases where appellate review might avoid protracted and expensive

litigation, and is not intended as a vehicle to provide early review of difficult rulings in hard

cases." Mills v. Everest Reins. Co., 771 F. Supp. 2d 270,272 (S.D.N.Y. 2009) (internal

quotation marks omitted). "The decision whether to grant an interlocutory appeal from a district

court order lies within the district court's discretion." Mills, 771 F. Supp. 2d at 272.

BoA's motion to certify an interlocutory appeal is denied because there is no

substantial ground for a difference of opinion. None of the cases on which BoA relies impose

the requirement that BoA urges this Court to adopt-that an individual whose knowledge is

imputed to the corporation must also "make" the material misstatement or omission at issue. See

~, In re PXRE Om. Ltd. Sec. Litig., 600 F. Supp. 2d 510,529 n.22, 537 (S.D.N.Y. 2009)

(declining to impute knowledge of corporation's actuary to corporation); Defer LP v. Raymon

James Fin. Inc., 654 F. Supp. 2d 204, 212·13 (S.D.N.Y. 2009) (dismissing complaint when

plaintiff could not attribute false statements to any defendant). For example, in In re MBIA, Inc.,

Securities Litigation, 700 F. Supp. 2d 566,591·92 (S.D.N.Y. 2010), it so happened that the


Case 1:11-cv-00733-WHP Document 167 Filed 08/28/12 Page 7 of 8

officers whose knowledge was imputed to the corporation also made material misstatements.

However, Judge Karas does not assert that this relationship is necessary to establish scienter.

Moreover, courts in this jurisdiction consistently interpret Dynex in the same

manner as this Court. See Solow v. Citigroup, Inc., 827 F. Supp. 2d 280,291 (S.D.N.Y. 2011)

(noting that plaintiff "need not identify specifically the individuals at Citigroup who acted with

scienter in order to plead scienter with respect to Citigroup"); Defer, 654 F. Supp. 2d at 212

(where corporate scienter is concerned, there is no requirement "that the same individual who

made an alleged misstatement on behalf of a corporation personally possess the requisite

scienter"); In re Moody's Corp. Sec. Litig., 599 F. Supp. 2d 493,516 (S.D.N.Y. 2009) (when

imputing misstatements and scienter to a corporation, "the individual making an alleged

misstatement and the one with scienter do not have to be one and the same"). Accordingly,

BoA's motion to certify the July 2012 Memorandum & Order for an interlocutory appeal is

denied. l

I Plaintiff requests that if this Court certifies an interlocutory appeal on the issue of corporate
scienter, that it also certify an interlocutory appeal of its dismissal of Plaintiffs claims under
Section 11 and Section 15 of the Securities Act of 1933. Plaintiff asserts this request only in its
papers opposing BoA's motion. This Court denies Plaintiffs application for failure to comply
with its Individual Practices.

Case 1:11-cv-00733-WHP Document 167 Filed 08/28/12 Page 8 of 8


For the foregoing reasons, Defendant Bank of America's motion for

reconsideration is denied. Defendant Bank of America's motion to certify an interlocutory

appeal is also denied. The Clerk of the Court is directed to terminate the motion pending at ECF

No. 151.

Dated: August 28, 2012

New York, New York


~ ---\-?-...~Q~



Counsel ofRecord:

Mark Robert Rosen
Barrack, Rodos & Bacine
3300 Two Commerce Square, 2001 Market Street
Philadelphia, PA 19103
Lead Counsel for Plaintiff

Jay B. Kasner
Skadden, Arps, Slate, Meagher & Flom LLP (NYC)
Four Times Square
42nd floor
New York, NY 10036
Counsel for Bank ofAmerica