Roberts v. Bloom Energy Corporation et al, No. 4:2019cv02935 - Document 167 (N.D. Cal. 2021)
Court Description: ORDER DENYING 160 MOTION FOR ENTRY OF JUDGMENT. Signed by Judge Haywood S. Gilliam, Jr. on 12/1/52021. *This order terminates docket no. 165 .*Initial Case Management Conference set for 12/14/2021 02:00 PM. This proceeding will be held by AT&T Conference Line. The parties are advised that in the event of an audio problem, counsel should be prepared to attend the hearing via Zoom conference at the Courts direction. The court circulates the following conference number to allow the equi valent of a public hearing by telephone.For conference line information, see: https://apps.cand.uscourts.gov/telhrg/ All counsel, members of the public and press please use the following dial-in information below to access the conference li ne: Dial In: 888-808-6929Access Code: 6064255The Court may be in session with proceedings in progress when you connect to the conference line. Therefore, mute your phone if possible and wait for the Court to address you before spea king on the line. For call clarity, parties shall NOT use speaker phone or earpieces for these calls, and where at all possible, parties shall use landlines. The parties are further advised to ensure that the Court can hear and understand them clea rly before speaking at length.PLEASE NOTE: Persons granted access to court proceedings held by telephone or videoconference are reminded that photographing, recording, and rebroadcasting of court proceedings, including screenshots or other visual copying of a hearing, is absolutely prohibited. See General Order 58 at Paragraph III.(ndr, COURT STAFF) (Filed on 12/1/2021)
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Roberts v. Bloom Energy Corporation et al Doc. 167 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JAMES EVERETT HUNT, et al., Plaintiffs, 8 v. 9 10 ORDER DENYING MOTION FOR ENTRY OF JUDGMENT Re: Dkt. Nos. 160, 165 BLOOM ENERGY CORPORATION, et al., Defendants. 11 United States District Court Northern District of California Case No. 19-cv-02935-HSG 12 Pending before the Court is Plaintiffs’ motion for entry of judgment against Defendant 13 14 PricewaterhouseCoopers LLP (“PwC”). Dkt. No. 160. The Court finds this matter appropriate for 15 disposition without oral argument and the matter is deemed submitted. See Civil L.R. 7-1(b). For 16 the reasons detailed below, the Court DENIES the motion. 17 18 I. BACKGROUND The parties are familiar with the facts of this case, and the Court only briefly summarizes 19 them here as relevant to the pending motion for entry of judgment. In his second amended 20 complaint, Lead Plaintiff James Everett Hunt and additional plaintiffs asserted violations of the 21 federal securities laws under Sections 11 and 15 of the Securities Act of 1933; Sections 10(b) and 22 20(a) of the Securities Exchange Act of 1934; and SEC Rule 10b-5 against Bloom Energy 23 Corporation and certain of its top officials (collectively, “Defendants”). See Dkt. No. 113 24 (“SAC”) at ¶ 1. As relevant here, Plaintiffs challenged several statements in Bloom’s Registration 25 Statement under Section 11, including what Plaintiffs considered improper accounting under 26 Generally Accepted Accounting Principles (“GAAP”) for loss contingencies and revenue relating 27 to Bloom’s Energy Servers. See id. at ¶¶ 63–74. Defendants brought three motions to dismiss the 28 Dockets.Justia.com United States District Court Northern District of California 1 second amended complaint. The Section 11 Defendants1 brought a motion to dismiss the Section 2 11 claims, as well as the Section 15 “controlling persons” claims. Dkt. No. 130. PwC, Bloom’s 3 independent auditor, brought its own motion to dismiss the Section 11 claims. Dkt. No. 127. And 4 the Section 10(b) Defendants2 brought a motion to dismiss the Section 10(b) claims. Dkt. No. 5 129. 6 On September 29, 2021, the Court granted in part and denied in part the motions to 7 dismiss. See Dkt. No. 157. The Court dismissed all the claims against PwC as well as the related 8 accounting-based claims alleged against the other Defendants. See id. The Court held, inter alia, 9 that (1) Bloom’s statements regarding accounting for contingent liabilities and Managed Services 10 Agreements were subject to Omnicare, Inc. v. Laborers District Council Construction Industry 11 Pension Fund, 575 U.S. 175 (2015); and (2) Plaintiffs had failed to plead “facts calling into 12 question Defendants’ basis” for these statements. Dkt. No. 157 at 8–14. As to PwC, the Court 13 further held that PwC’s opinions in its audit report regarding Bloom’s 2016 and 2017 financial 14 statements were also subject to Omnicare, and that Plaintiffs “failed to plead any facts suggesting 15 that PwC did not sincerely believe” its opinions in the audit report. Id. at 22–26. The Court did 16 not, however, dismiss Plaintiffs’ Section 11 claims against the other Section 11 Defendants 17 regarding alleged misrepresentations about the efficiency and emissions of Bloom’s Energy 18 Servers and construction delays. See id. at 20–21. The Court granted Plaintiffs leave to amend within 21 days of the date of the order. See 19 20 id. at 34. However, Plaintiffs did not amend within this timeframe. Rather, they indicated in their 21 case management statement that they could not “plead additional facts regarding the dismissed 22 claims to meet the standard for pleading claims under the Securities Act and Exchange Act as 23 required by the Court in its Order,” and therefore concluded that “further amendment and 24 additional briefing on a motion to dismiss would be futile.” See Dkt. No. 159 at 3. Instead, 25 26 27 28 The Section 11 Defendants include Bloom Energy Corporation, nine of Bloom’s current and former officers and directors, and the ten underwriters of Bloom’s initial public offering. See Dkt. No. 130. 2 The Section 10(b) Defendants include Bloom Energy Corporation, Bloom’s CEO KR Sridhar, and Bloom’s former CFO Randy Furr. See Dkt. No. 129. 2 1 1 Plaintiffs seek entry of judgment as to PwC under Federal Rule of Civil Procedure 54(b). Dkt. 2 No. 160. Plaintiffs further indicate that if the Court denies this motion, they intend to seek an 3 interlocutory appeal under 28 U.S.C. § 1292(b). See id. at 7, n.2. 4 II. Appellate courts generally only have jurisdiction to hear appeals from final orders. See 28 5 United States District Court Northern District of California LEGAL STANDARD 6 U.S.C. § 1291. Rule 54(b) allows for a narrow exception to this final judgment rule, permitting 7 courts to “direct entry of a final judgment as to one or more, but fewer than all, claims or parties 8 only if the court expressly determines that there is no just reason for delay.” Entry of judgment 9 under Rule 54(b) thus requires: (1) a final judgment; and (2) a determination that there is no just 10 reason for delay of entry. See Pakootas v. Teck Cominco Metals, Ltd., 905 F.3d 565, 574 (9th Cir. 11 2018) (quoting Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 7–8 (1980)). 12 III. 13 DISCUSSION Here, the parties appear to agree that the Court rendered a final judgment as to the claims 14 against PwC. See Dkt. No. 163 at 3. Therefore, the only question before the Court is whether 15 there is any just reason for delay. 16 As the Ninth Circuit has explained, “[j]udgments under Rule 54(b) must be reserved for 17 the unusual case in which the costs and risks of multiplying the number of proceedings and of 18 overcrowding the appellate docket are outbalanced by pressing needs of the litigants for an early 19 and separate judgment as to some claims or parties.” Morrison-Knudsen Co. v. Archer, 655 F.2d 20 962, 965 (9th Cir. 1981). Accordingly, an explanation of findings “should include a determination 21 whether, upon any review of the judgment entered under the rule, the appellate court will be 22 required to address legal or factual issues that are similar to those contained in the claims still 23 pending before the trial court.” Id. at 965. “The greater the overlap the greater the chance that 24 [the Court of Appeals] will have to revisit the same facts—spun only slightly differently—in a 25 successive appeal.” Wood v. GCC Bend, LLC, 422 F.3d 873, 882 (9th Cir. 2005). “[P]lainly, 26 sound judicial administration does not require that Rule 54(b) requests be granted routinely.” Id. 27 at 879 (quotation omitted). 28 In their initial motion, Plaintiffs only sought entry of judgment as to PwC. See Dkt. No. 3 United States District Court Northern District of California 1 160. They did not seek judgment on their accounting-based claims against any of the other 2 Defendants. See id. at 2, 5–6. Plaintiffs nevertheless urged that entering judgment as to PwC 3 would not lead to piecemeal appeals because “the accounting claims under review are separable 4 from the other[] construction delays and life efficiency [claims] remaining to be adjudicated.” Id. 5 at 6 (quotation omitted). Plaintiffs have not, however, completely waived their right to amend the 6 accounting-based claims against the other Defendants. See Dkt. No. 159 at 9. In their case 7 management statement, Plaintiffs still purport to “reserve their rights to request leave to amend 8 [later] pending the outcome of any appeal or based on facts obtained during discovery.” Dkt. No. 9 159 at 9. Plaintiffs therefore endeavor to appeal the Court’s order as to PwC and use a favorable 10 ruling as a basis to amend the claims against the other remaining Defendants. See id. Such tactics 11 would all but guarantee piecemeal appeals of the same legal and factual issues. The Court finds 12 that no one’s interests are served by such inefficiency. 13 Perhaps recognizing these concerns, Plaintiffs changed tactics in their reply brief. They 14 now suggest that the Court could enter judgment as to all Defendants regarding the accounting- 15 based claims. See Dkt. No. 166. The Court does not credit arguments raised for the first time in 16 reply. In any event, the Court is not persuaded that entering judgment under Rule 54(b) would be 17 warranted even if it applied to all accounting-based claims. As the Ninth Circuit has explained, 18 judgments under Rule 54(b) are “reserved for the unusual case . . . .” Morrison-Knudsen Co., 655 19 F.2d at 965. Yet the circumstances of this case—in which some securities claims, but not all, have 20 survived a motion to dismiss—are quite routine. See Abdo v. Fitzsimmons, No. 17-CV-00851- 21 TSH, 2021 WL 3493169, at *4 (N.D. Cal. May 17, 2021) (noting that “[a]lthough motions for 22 summary judgment are commonly granted in part and denied in part as a case proceeds to trial, 23 granting a request for Rule 54(b) certification in ordinary situations is not – and according to the 24 Ninth Circuit should not become – routine”). 25 Plaintiffs also have not adequately explained why the equities in this case warrant entering 26 judgment under Rule 54(b). See Curtiss-Wright Corp., 446 U.S. at 8 (“[A] district court must take 27 into account judicial administrative interests as well as the equities involved.”). Plaintiffs simply 28 assert that “[i]t would be highly prejudicial to both Plaintiffs and PwC to potentially have to 4 United States District Court Northern District of California 1 commence litigating the claims against PwC arising from a transaction that took place in 2018, 2 several years from now.” See Dkt. No. 160 at 7. As an initial matter, PwC opposes the motion for 3 entry of judgment, and therefore does not appear to believe it will be prejudiced by the delay. See 4 Dkt. No. 163. As to Plaintiffs’ own hardship, they explain that “[t]here would be obvious 5 detrimental effects on discovery and the availability of witnesses and evidence.” See id. In short, 6 Plaintiffs are concerned about the passage of time before they may appeal the Court’s order on the 7 accounting-based claims. But again, such delay arises in every case in which some but not all 8 claims are dismissed before trial. And judgment under Rule 54(b) would not necessarily alleviate 9 the prejudice from delay because the appellate process itself takes time. In the interim, the Court 10 would either have to stay this case and the remaining claims, or proceed with the knowledge that 11 Plaintiffs intend to expand the scope of the issues if successful on appeal. Having considered the 12 specific circumstances of this case, the Court finds that the equities do not weigh in favor of 13 entering judgment. The Court understands that Plaintiffs disagree with the Court’s ruling on the 14 motions to dismiss, and Plaintiffs will have the opportunity to raise their arguments before the 15 Ninth Circuit at the conclusion of this case. 16 IV. CONCLUSION 17 Accordingly, the Court DENIES the motion. The Court further CONTINUES the 18 telephonic case management conference to December 14, 2021, at 2:00 p.m. All counsel shall use 19 the following dial-in information to access the call: 20 Dial-In: 888-808-6929; 21 Passcode: 6064255 22 For call clarity, parties shall NOT use speaker phone or earpieces for these calls, and where at all 23 possible, parties shall use landlines. The joint case management statement is due December 7, 24 2021. 25 The Court understands that Plaintiffs may intend to seek an interlocutory appeal under 28 26 U.S.C. § 1292(b). See Dkt. No. 160 at 7, n.2. Plaintiffs are of course free to do so. However, the 27 Court does not intend to stay this case while Plaintiffs confirm their appellate strategy or seek an 28 interlocutory appeal. The parties should therefore be prepared to discuss how to move this case 5 1 forward expeditiously, especially given the narrowed set of claims and issues remaining. This 2 order terminates Dkt. No. 165. 3 IT IS SO ORDERED. 4 5 6 Dated: 12/1/2021 ______________________________________ HAYWOOD S. GILLIAM, JR. United States District Judge 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6
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