IN RE MORGAN KEEGAN OPEN-END MUTUAL FUND LITIGATION, No. 2:2007cv02784 - Document 291 (W.D. Tenn. 2010)
Court Description: ORDER DENYING MOTIONS FOR RECONSIDERATION 267 275 277 278 . Signed by Judge Samuel H. Mays, Jr., on December 30, 2010. (Mays, Samuel)
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IN RE MORGAN KEEGAN OPEN-END MUTUAL FUND LITIGATION Doc. 291 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION IN RE: REGIONS MORGAN KEEGAN SECURITIES, DERIVATIVE, AND ERISA LITIGATION ) ) ) ) ) ) ) ) ) ) IN RE: REGIONS MORGAN KEEGAN OPEN-END FUND LITIGATION Case No. 07-2784 MDL 2009 ORDER DENYING MOTIONS FOR RECONSIDERATION Before the Court are the October 28, 2010 Motion for Reconsideration filed by the Lead Plaintiffs (ECF No. 275) and the November Defendants 4, Morgan 2010 Motions Keegan & Regions Bank (“Regions”). for Co., Reconsideration Inc. (“Morgan (ECF Nos. 277-78.) Keegan”) by and All parties filed their responses in opposition on November 30, 2010. Nos. 286-88.) filed (See ECF Both the Lead Plaintiffs and the Defendants ask this Court to modify its Order of September 30, 2010, which granted in part and denied in part Defendants’ Dismiss the Consolidated Amended Complaint (“CAC”). Motions to See In re Regions Morgan Keegan Open-End Fund Litig., No. 07-2784, MDL 2009, 2010 U.S. Dist. LEXIS 104246, at *43-44 (W.D. Tenn. Sept. 30, 2010). For the following reasons, the Motions for Reconsideration are DENIED. Dockets.Justia.com I. STANDARD OF REVIEW District courts have the inherent authority, confirmed by the common law and Federal Rule of Civil Procedure 54(b), to reconsider any interlocutory order. Rodriguez v. Tenn. Laborers Heath & Welfare Fund, 89 F. App’x 949, 959 (6th Cir. 2004); Mallory v. Eyrich, 922 F.2d 1273, 1282 (6th Cir. 1991). On reconsideration, an a district court may modify or rescind interlocutory order and may “hold whatever hearings it deems Mallory, 922 F.2d at 1282. advisable.” motion for reconsideration if 1) an Courts will grant a intervening change in controlling law occurs; 2) new evidence becomes available; or 3) there is a need to correct a clear error of law or to prevent manifest injustice. “may not be used Rodriguez, 89 F. App’x at 959. to relitigate old matters, or Motions to raise arguments or present evidence that could have been raised prior to the entry of judgment.” 11 Charles Alan Wright et al., Federal Practice and Procedure § 2810.1 (2d ed. 1995). II. ANALYSIS A. Lead Plaintiffs’ Motion for Reconsideration Familiarity with the facts is assumed. See Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *5-17. Lead Plaintiffs argue that the Court erred by dismissing their claims under §§ 10(b) and 20 of the Securities and Exchange Act of 1934 (“the `34 Act”), 15 U.S.C. §§ 78j(b), 2 78t(a), and Rule 10b-5 promulgated dismissed thereunder. Lead 17 Plaintiffs’ C.F.R. claims § 240.10b-5. under those The Court provisions for failure to plead scienter as required by the Private Securities Litigation Reform Act (“PSLRA”). Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *20-35. Lead Plaintiffs argue that the rankest CAC “positively scienter” and that reeks of the allegations in the CAC. the Court ignored and most numerous obvious relevant (Pls.’ Mem. in Support of Their Mot. for Reconsideration, at 7-8, 16, ECF No. 275-1.) (“Pls.’ Mem.”) They also assert that Court erred by drawing an inference from the CAC in the Defendants’, rather than the Lead Plaintiffs’, favor. (Id. at 11.) The basis of Lead Plaintiffs’ prolixity of their Complaint. including 766 paragraphs primary argument is the With four hundred pages of text, and six attached appendices, Lead Plaintiffs assert that they must have pled scienter sufficiently for the Court to make the required inference. (See id. at 6-9.) Lead Plaintiffs note that the CAC uses some form of the word “know” more than fifty times. (Id. at 6.) Prolixity does not equal specificity. specificity. The PSLRA demands It requires that plaintiffs pleading a claim under the `34 Act 1) “state with particularity” the facts constituting the alleged violation, including “specifying each statement alleged to have been misleading,” 15 U.S.C. § 78u-4(b)(1), and 3 2) “state with particularity the facts giving rise to a strong inference that the defendant acted with the particular state of mind.” known Id. § 78u-4(b)(2). as scienter and That “particular state of mind” is requires a plaintiff to show that a defendant’s intention was “to deceive, manipulate or defraud.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 313 (2007) (citation omitted). An inference of scienter is “strong” within the meaning of the PSLRA if it is “more than merely plausible or reasonable – it must be cogent and at least as compelling as any opposing inference of nonfraudulent intent.” Id. at 314. In the Sixth Circuit, scienter requires that a plaintiff least at state facts sufficient to support conclusion that a defendant acted with recklessness. Diebold, Inc., 590 F.3d 390, 396 (6th Cir. 2009). the Konkol v. Recklessness is “highly unreasonable conduct which is an extreme departure from the standards of ordinary care.” Mansbach v. Prescott, Ball, & Turben, 598 F.2d 1017, 1025 (6th Cir. 1979). In its prior Order, the Court analyzed all four factors1 emphasized by Lead Plaintiffs. Compare Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *27-32, with Pls.’ Mem. in Opp. to Defs.’ Mot. to Dismiss, at 98, ECF No. 238. 1 (“Pls.’ Dismiss In their Motion, Lead Plaintiffs assert that the Court analyzed only two factors in its scienter analysis. Compare Pls.’ Mem. at 6 (“The Court only addressed two of the CAC’s allegations of Defendants’ knowledge”), with Open End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *27 (“Plaintiffs point to four factors suggesting scienter in this case.” (citation omitted)). 4 Resp.”) The Court also noted one Plaintiffs chose not to emphasize. important factor Lead Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *32-33. Although Lead Plaintiffs challenge the inferences the Court drew from the CAC, case law is clear: a district court has a duty to consider both the inferences Plaintiffs urge and “competing inferences rationally Tellabs, 551 U.S. at 314. drawn from the facts alleged.” That means that a district court must also consider non-fraudulent conclusions that one could fairly draw from the same alleged facts, engage in a comparative analysis, and determine whether the inference of fraudulent intent is “cogent and at least as compelling as any opposing inference of nonfraudulent intent.” Id. Here, Lead Plaintiffs’ allegations, viewed as a whole, were not at least as compelling. See Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *24-35. In their pleadings, Lead Plaintiffs repeatedly undermined their own scienter allegations. They have acknowledged that they did “not allege that the dollar value for any security was incorrect at any time during the Class Period.” Resp. at 22.) Lead Plaintiffs did make specific allegations about certain investments the Funds made. Defendants (Pls.’ Dismiss concluded that the They alleged that the investments were illiquid when Defendants analyzed them for independent clients, but concluded the opposite when analyzing them for the Funds. 5 See Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *29-30. However, Lead Plaintiffs at most indentified twenty securities in which the Funds invested over a period of three years. Id. at 30. Lead Plaintiffs did not quantify those investments in terms of the Funds’ total assets of $2.2 billion. Id. It is more likely that those highlighted transactions involved a de minimis amount of the Funds’ assets. Id. at *30-31. De minimis accusations will not support scienter. Similarly, Lead Plaintiffs’ allegations of insider trading are insufficient information that because Lead triggered Plaintiffs the insider admitted sales that appeared the in a published article available to any member of the general public. (CAC ¶ 352, ECF No. 218.) The CAC also failed to allege “how many employees sold their shares in the Funds, when these sales took place, how many total employees held the Funds’ shares, or whether individual share sales made a marked difference in the number of shares held by Morgan Keegan employees.” Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *34. Lead Plaintiffs complain that they could not fill the holes in their Complaint absent discovery. (Pls.’ Mem. at 3.) Congress enacted the PSLRA to “check against abusive litigation by private parties.” Tellabs, 551 U.S. at 313. One of those checks was a stay on all discovery in cases under the `34 Act until they had survived a motion to dismiss. 6 15 U.S.C. §78u- 4(b)(3)(B). filed, A plaintiff’s suit must be meritorious when it is not after the aided by discovery. completion of a “fishing expedition[]” See Konkol, 590 F.3d at 397 (citing Fischer v. Vantive Corp. (In re Vantive Corp. Secs. Litig.), 283 F.3d 1079, 1087 (9th Cir. 2002)). One cannot survive the PSLRA’s heightened scrutiny merely by listing a series of disturbing facts them. that and generally alleging that (Cf. Pls.’ Mem. at 6-8.) permit the Court to draw the defendants knew about One must plead specific facts a strong defendants acted with the required intent. inference that the See Konkol, 590 F.3d at 397 (noting that alleging “access to information” is not enough to satisfy the PSLRA’s standard (citation omitted)). It is not the job of the Court to sort through a “data dump” and construct plaintiffs’ claims for them. They must cogently state them on their own. Lead Plaintiffs also argue that the Court erred by dismissing their `34 Act claims because of confusion about the defendants Lead Plaintiffs actually sued. 19); see also Open-End 104246, at *22-24. Fund Litig., (Pls.’ Mem. at 17- 2010 U.S. Dist. LEXIS A complaint that fails to identify clearly who is a defendant fails under any form of heightened pleading standard. Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *24. and Here, Plaintiffs chose to define “Morgan Asset Management” “Morgan Keegan” to include 7 not only those corporate Defendants but also “their respective officers and employees as named Defendants, including John Does One through Twenty.” ¶ 88.) (CAC The CAC uses those defined terms in Counts V and VI, leading one to believe that the officers and directors were also defendants in those counts. (Id. ¶¶ 742, 752.) Despite Lead Plaintiffs’ definition of “Morgan Asset Management” and “Morgan Keegan,” Counts I and VII of the CAC specifically state whether they include or do not include the officers and directors. ¶¶ 684, 758.) (Id. Thus, Lead Plaintiffs introduced ambiguity into the CAC about what those defined terms mean. Defendants noted this confusion. Certain individual (See Mem. of Law in Support of the Individual Defs.’ Mot. to Dismiss, at 1 n.1, ECF No. 226-1.) Lead Plaintiffs did not respond. The ambiguity remained. Lead Plaintiffs argue that the questionable headings were “simply silent as to the Defendant officers and directors,” but that the “pattern” should have been clear. (Pls.’ Mem. at 18.) The Individual Defendants did not find it clear; neither did the Court. complaint If there can defendants. never is be one topic silent, about it is which the a plaintiff’s identity of the See Bell Atl. v. Twombly, 550 U.S. 544, 555 (2007) (noting that, even under the relaxed standards of Federal Rule of Civil Procedure 8, a complaint must contain “a short and plain statement of the claim” that will “give the defendant fair notice of what the . . . claim is.” (omission in original; 8 citation omitted)). That is true, a fortiori, under the PSLRA’s heightened pleading standards, which require specificity about every required element. See Konkol, 590 F.3d at 396. and prolixity are rarely allies. Cogency Lead Plaintiffs’ arguments for reconsideration of the dismissal of the `34 Act claims are not well-taken, and their Motion is DENIED.2 B. Defendants’ Motions for Reconsideration Defendants Morgan Keegan and Regions have filed separate Motions for Reconsideration, arguing that the Court erred in failing to dismiss Lead Plaintiffs’ claims under the Securities Act of 1933 (the “`33 Act”), 15 U.S.C. §§ 77k, 77l, 77o. See Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *35-40. Morgan Keegan argues that 1) these claims allege mismanagement of the Defendant Funds and therefore, under Maryland law, may only be raised in a derivative action; and 2) Lead Plaintiffs’ CAC demonstrates that they cannot prove loss causation. (Morgan Keegan Mem. in Support of Mot. for Reconsideration, at 2-9, ECF No. 277-1.) (“Morgan Keegan Mem.”) in its arguments. (Regions Mem. Regions joins Morgan Keegan in Support of Mot. for Reconsideration, at 1-2, ECF No. 278-1.) 2 Lead Plaintiffs did not move for reconsideration of the Court’s dismissal of their claims under §§ 13, 22, 30, 34(b), and 47(b) of Investment Company Act of 1940. See Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *41-43. 9 1. Derivative v. Direct Claims Morgan Keegan and Regions argue that Lead Plaintiffs may raise their claims only in a derivative action because the gravamen of the CAC is that the Defendants mismanaged the Funds. (Morgan Keegan Mem. at 2-3.) of the Alabama Supreme Defendants cite the recent opinion Court in Ex parte Regions Financial Corp., No. 1090425, 2010 Ala. LEXIS 183, at *24-26 (Ala. 2010), which dismissed a related shareholder suit filed in Alabama state court after determining that the claims were derivative in nature. Morgan Keegan and Regions also argue that they never promised to abide by any of the alleged investment restrictions that Lead Plaintiffs documentation. assert appeared in the Funds’ (Morgan Keegan Mem. at 6.) Defendants are correct that, under general principles of corporate law, “if a shareholder’s investment is frittered away by corporate mismanagement, only the corporation can recover.” See, e.g., Lubin v. Skow, 382 F. App’x 866, 870 (11th Cir. 2010) (citation omitted). A plaintiff also may not plead a cause of action under the federal securities laws by alleging “fraud by hindsight.” That occurs when a plaintiff claims that 1) the company should have disclosed bad news it eventually revealed sooner or 2) a defendant’s optimistic past statements were fraudulent because later developments proved them to be false. 10 In re Atlas Air Worldwide Holdings, Inc. Sec. Litig., 324 F. Supp. 2d 474, 494 (S.D.N.Y. 2004). These prohibited categories of claims are distinct from the claims made by Lead Plaintiffs here. Material misrepresentations in a registration statement of the risk posed by the Funds’ holdings are actionable under the `33 Act. See 15 U.S.C. § 77k(a); In re Citigroup, Inc. Bond Litig., No. 08 Civ. 9522, 2010 U.S. Dist. LEXIS 69257, at *68-69 (S.D.N.Y. July 12, 2010). An allegation that a statement was false when made is actionable under the federal securities laws and does not state an invalid mismanagement or fraud-by-hindsight claim. In re Atlas Worldwide Holdings, 324 F. Supp. 2d at 494 n.11. Lead Plaintiffs allege that Defendants stated they would not invest more than 15% of the Funds’ assets in illiquid securities or more than 25% of the Funds’ assets in securities related to the same industry. that Funds those (CAC ¶¶ 162, 276.) statements were, at restrictions. Defendants made that were misleading time, in 89, 93-94 when violation made of because the (See, e.g., id. ¶¶ 171, 276(a), (c).) those statements justiciable on a motion to dismiss. U.S. Lead Plaintiffs also allege (2007) (per is a question of the stated Whether fact not See Erickson v. Pardus, 551 curiam) (cautioning courts that factual disputes are not for resolution on motions to dismiss 11 and that the facts as alleged should be read in the light most favorable to the plaintiff). Ex parte Regions Financial Corp. is distinguishable because it was a complaint Court’s separate is only opinion; suit with briefly a separate excerpted therefore, it is in complaint. the Alabama impossible to allegations to those presently before the Court. LEXIS 183, at *2-4. That Supreme compare its See 2010 Ala. The portion excerpted makes only a general allegation of fraud and is not comparable to Lead Plaintiffs’ more specific allegations here. 162, 171, 276. Compare id. with e.g., CAC ¶¶ Lead Plaintiffs’ allegations are sufficient, and they have stated claims under the `33 Act. In re Citigroup Bond Litig., 2010 U.S. Dist. LEXIS 69257, at *49, 68-69; In re Atlas Worldwide Holdings, 324 F. Supp. 2d at 494 & n.11; cf. In re Surebeam Corp. Sec. Litig., No. 03 CV 1721 JM (FOR), 2004 U.S. Dist. LEXIS 26951, at *41-42 (S.D. Cal. June 3, 2005) (noting that merely derivative claim does because the mismanagement not mean same claim that a allegations and a plaintiff federal must may support securities bring one a law claim instead of the other). 2. Loss Causation Morgan Keegan and Regions next argue that the Court erred in refusing to dismiss Lead Plaintiffs’ failure to plead loss causation. 12 `33 Act claims for See Open-End Fund Litig., 2010 U.S. Dist. LEXIS 104246, at *38. Loss causation is not an element the of a claim under § 11 of `33 Act. It U.S.C. § 77l(b). an See affirmative defense that the Defendants must prove. is 15 Lead Plaintiffs have not pled themselves out of court by demonstrating that it is impossible for them to demonstrate loss causation succeed this affirmative on – the only defense way the at Defendants could motion-to-dismiss Cf. Jackson v. Marion County, 66 F.3d 151, 153 (7th Cir. stage. 1995) (“[A] plaintiff can plead himself out of court by alleging facts which show that he has no claim, even though he was not required to allege those facts.” (citation omitted)). Affirmative defenses are best left for adjudication on motions for summary judgment or at trial. See Indiana State Dist. Council of Laborers v. Omnicare, Inc., 583 F.3d 935, 947 (6th Cir. 2009) plaintiff’s (reversing § 11 claim a district for failure court’s to dismissal plead loss of a causation because that affirmative defense is generally not grounds for dismissal). See 11 Defendants’ Motions for Reconsideration are DENIED. Charles Alan Wright et al., Federal Practice and Procedure § 2810.1 (2d ed. 1995) (noting that reconsideration should not be used “to relitigate old matters”). C. Lead Plaintiffs’ Motion to Certify Final Judgment Lead Plaintiffs move in the alternative for the Court to certify its judgment dismissing their `34 Act claims against 13 Defendants as final under Federal Rule of Civil Procedure 54(b) so that they may appeal immediately. (Pls.’ Mem. at 19-20.) Defendants oppose that request and argue that the `34 Act and `33 Act claims are not severable and thus are unsuitable for piecemeal, interlocutory appeals. (Morgan Keegan Mem. in Opp. to Pls.’ Mot. for Reconsideration, at 11-14, ECF. No. 286.) (“Morgan Keegan Opp.”) Rule 54(b) provides, in pertinent part: When an action presents more than one claim for relief – whether as a claim, counterclaim, crossclaim, or third-party claim – or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. A district court must make two findings before it may certify a partial judgment as final. to one or more claims. First, the judgment must be final as Lowery v. Fed. Express Corp., 426 F.3d 817, 821 (6th Cir. 2005). for delay. Id. Rule Second, there must be no just reason 54(b) “attempts to strike a balance between the undesirability of piecemeal appeals and the need for making review available at a time that best serves the needs of the parties.” (6th Cir. Solomon v. Aetna Life Ins. Co., 782 F.2d 58, 60 1986) (citation omitted). It “does not tolerate immediate appeal of every action taken by a district court.” Gen. Acquisition, Inc. v. GenCorp, Inc., 23 F.3d 1022, 1026 (6th Cir. 1994). 14 When considering certification under Rule 54(b), a “claim” is “the aggregate of operative facts which give rise to a right enforceable in the courts.” Lowery, 426 F.3d at 821 (quoting McIntyre v. First Nat’l Bank of Cincinnati, 585 F.2d 190, 192 (6th Cir. 1978)) (internal quotation marks omitted). One “claim” for purposes of an interlocutory appeal may give rise to multiple avenues for legal relief under separate theories of liability. appeal brought requirements In Lowery, after the Id. of Rule 54(b) the Sixth district Circuit court satisfied. Id. dismissed had at found 819. an the Lowery brought claims against his employer for racial discrimination and retaliation under federal contract under state law. employment Id. at 820. law and breach of The district court granted summary judgment in favor of the employer on Lowery’s federal claims, but found should proceed to trial. that Id. the state-law contract It entered final judgment on the federal claims under Rule 54(b) at Lowery’s request. Circuit held federal employment contract that claim the district court discrimination arose from claim the erred claims “same because and aggregate The Sixth Lowery’s his state-law of operative facts” for “the same underlying injury,” Lowery’s failure to receive a pay increase and job opportunities similar to those of other managers. Id. at 821. 15 Lead Plaintiffs have brought suit against Defendants under two separate theories of recovery under the `33 and 34 Acts. However, their theories of recovery are based on one “claim,” as defined by Lowery – that Defendants misrepresented the risks the Funds undertook and hid portfolios from investors. the actual state of the Funds’ Open-End Fund Litigation, 2010 U.S. Dist. LEXIS 104246, at *13-16. The Court’s Order dismissed Lead Plaintiffs’ theory of recovery under the `34 Act, but it did not Id. at *35. extinguish their claim. Under the same aggregate of operative facts, Plaintiffs successfully stated a theory of recovery under the `33 Act, which, although it has a heightened pleading standard, does not require Lead Plaintiffs to plead scienter. Id. at *35-40. The Order did not finally determine all matters concerning one of Lead Plaintiffs’ claims within the meaning of Rule 54(b). See Lowery, 426 F.3d at 820-21. Thus, the Court cannot make the required first finding. Even if Lead Plaintiffs could meet the first requirement, they have failed to demonstrate that there is no just reason for delaying an appeal. five factors helps See id. at 821. to guide a A non-exhaustive list of district court’s analysis whether there is no just reason for delay: (1) the relationship between the adjudicated and unadjudicated claims; (2) the possibility that the need for review might or might not be mooted by future developments in the district court; (3) the possibility that the reviewing court might be obliged 16 of to consider the same issue a second time; (4) the presence or absence of a claim or counterclaim which could result in set-off against the judgment sought to be made final; (5) miscellaneous factors such as delay, economic and solvency considerations, shortening the time of trial, frivolity of competing claims, expense and the like. Id. at 822 (citing Gen. Acquisition, 23 F.3d at 1030). District courts factors. have great discretion in weighing these Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 12 (1980) (“[T]he task of weighing and balancing the contending factors is peculiarly one for the trial judge,” who knows the case best.). As discussed Plaintiffs’ previously, adjudicated and the relationship unadjudicated between claims because they are based on the same set of facts. is Lead close That also means that, if Lead Plaintiffs take an immediate appeal, the Court of Appeals would be likely to review the same facts and consider dismissal similar of the issues `34 twice Act – claims once and on appeal once after from the disposition of Lead Plaintiffs’ claims under the `33 Act. the final Cf. Curtiss-Wright, 446 U.S. at 9 (noting that, where a district court finds that the claims are severable both factually and legally, certification under Rule 54(b) may be appropriate). Because the facts supporting the different theories of recovery are so intertwined, any appeal would result in delay. This case has been pending since 2007 and is now ready for discovery. Further interlocutory legal maneuvering 17 would unjustifiably delay final adjudication of the pending claims and prejudice both the class members represented by the Lead Plaintiffs and the Defendants, who have an interest in a final and speedy determination of all claims. Against these strong reasons for declining to authorize an immediate appeal, there are no correspondingly strong reasons to authorize. The cases Lead Plaintiffs cite in support of their Motion are inapposite and demonstrate the impropriety of a Rule 54(b) certification in the present case. See, e.g., Chad Youth Enhancement Ctr., Inc. v. Colony Nat’l Ins. Co., No. 3:09-0545, 2010 U.S. Dist. LEXIS 53561, at *6-7 (M.D. Tenn. June 1, 2010) (granting certification where the only issue remaining was the correctness of the court’s challenged order and “the parties [had] resolved their differences” on all remaining issues); Life Ins. Co. of N. Am. v. Simpson, No. 08-2446, 2009 U.S. Dist. LEXIS 62944, certification at *19 under (W.D. Rule Tenn. 54(b) July 16, appropriate 2009) where (finding “no other claims” existed against the moving party and “it no longer has any role in this litigation”). Because Lead Plaintiffs have not demonstrated the presence of either factor required to certify a partial final judgment under Federal Rule of Civil Procedure 54(b), their Motion is DENIED. 18 D. Motion to Strike Defendants filed a Motion to Strike Lead Plaintiffs’ SurReply and note in their Motions for Reconsideration that the Motion to Strike remains pending. Keegan Opp. at 1 n.1.) (See ECF No. 267; Morgan Defendants’ Motion argues that the Court should strike the 637-page declaration Lead Plaintiffs attached to their Sur-Reply. They note that, in addition to new case law, Lead Plaintiffs also included recent regulatory filings and more than seventy exhibits. ECF No. 267.) engaged in (Defs.’ Mot. to Strike, at 3-4., Lead Plaintiffs respond that Defendants have similar behavior, supplementing their filings in support of their Motions to Dismiss with voluminous extraneous materials. (Pls.’ Mem. in Opp. to Mot. to Strike, at 2-4, ECF No. 268.) The Sixth Circuit generally takes “a liberal view of what matters fall within the pleadings for purposes of” a motion to Armengau v. Cline, 7 F. App’x 336, 344 (6th Cir. dismiss. 2001). That does not mean that a court may consider any and all materials the parties submit. sufficiency of the complaint. Motions to dismiss test the 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1356 (2d ed. 1990). If a court considers matters outside the pleadings, it must treat the motion as one for summary judgment, give notice parties, and allow for supplementation of the record. 19 to the Fed. R. Civ. P. 12(d); Armengau, 7 F. App’x at 343. to a motion to dismiss may be Documents attached considered as part of the pleadings if they are “referred to in a complaint and central to the claim.” Armengau, 7 F. App’x at 343 (citing Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir. 1999)). A court may also governmental consider public records, decisions of agencies, and matters of which it may take judicial notice. Jackson, 194 F.3d at 745. Both parties to this action have filed numerous extraneous materials with the Court. The Court has declined to convert Defendants’ Motions into motions for summary judgment. R. Civ. P. 12(d). See Fed. It, therefore, necessarily has limited its analysis to matters contained within the CAC and the additional documents referred to in it. See Armengau, 7 F. App’x at 343. No other materials from any party factored into the Court’s analysis. It is inappropriate for a party to attach more than six hundred pages of documents to a pleading to which the opposing parties do not have an opportunity to respond. Lead Plaintiffs’ Motion to File a Consolidated Sur-Reply sought permission to respond to thirty-five cases that the Defendants had not cited previously. (Mem. in Supp. of Pls.’ Mot. to File Sur-Reply, at 2-3, ECF No. 259-1.) on that basis alone. The Court granted Lead Plaintiffs’ Motion (See ECF No. 261.) 20 To the extent the materials submitted by Lead Plaintiffs are not cases cited in response to Defendants’ prior arguments, the Motion to Strike is GRANTED because Lead Plaintiffs exceeded the leave they sought and were granted. III. CONCLUSION The Motions for Reconsideration are DENIED. Lead Plaintiffs’ Motion to Certify the Judgment under Federal Rule of Civil Procedure 54(b) is DENIED. Defendants’ Motion to Strike is GRANTED IN PART. So ordered this 30th day of December, 2010. s/ Samuel H. Mays, Jr. SAMUEL H. MAYS, JR. UNITED STATES DISTRICT JUDGE 21
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