Wu v. Stomber
292 F.R.D. 69
D.C. Cir.2013Background
- CCC was an offshore investment issuing private placements then a global Offering in 2007, financed with high leverage and subject to liquidity risk disclosures.
- Plaintiffs, CCC investors, sued CCC, its management firm, affiliates, and directors/officers under Rule 23, seeking relief for four asserted classes and multiple claims.
- The Court previously dismissed federal and state-law claims in a memorandum opinion dated August 13, 2012, and denied leave to amend the judgment that same day.
- After the 2012 dismissal, plaintiffs sought Rule 15(a)(2) and 59(e) relief to file an amended consolidated complaint and to amend the judgment, and appealed.
- The amended complaint purported to add four claims including 10b-5 and common-law theories, but the Court found no new actionable omissions or cured reliance or causation deficiencies.
- The Wu action was separately dismissed, and plaintiffs moved to overturn that dismissal as part of the post-judgment proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 59(e) relief to amend the judgment was proper | Plaintiffs contended amendments add new context and cure deficiencies | Defendants argued no extraordinary circumstances; no new actionable omissions; no cured reliance | Rule 59(e) motion denied; amendments futile |
| Do new allegations cure the omission-based securities claims | New facts show omissions in Offering Memorandum were actionable | New facts do not establish new omissions or causation; material theory unchanged | Amendment not sufficient to cure omissions or causation; judgment stands |
| Do updated disclosures in Supplemental Offering Memorandum alter sufficiency | Supplemental disclosures updated the record and could cure the prior failure | Warnings in original Offering Memorandum already put investors on notice; updates do not cure omissions | Disclosures do not warrant amending the judgment; continuing deficiencies remain |
| Is there a valid reliance theory for the common-law claims | Plaintiffs allege direct reliance on omissions | Reliance insufficiently pled; cannot rely on Rule 59(e) to relitigate | Reliance inadequacies persist; no basis to amend judgment |
| Does Wu v. Stomber alter the judgment on duplicative-party grounds | Removing Wu changes redundancy and supports amendment | Circumstances at filing unchanged; removal cannot justify relief | Wu dismissal stands; no basis to amend judgment |
Key Cases Cited
- Ciralsky v. CIA, 355 F.3d 661 (D.C. Cir. 2004) (Rule 59(e) relief requires extraordinary circumstances)
- Exxon Shipping Co. v. Baker, 554 U.S. 471 (U.S. Supreme Court 2008) (Rule 59(e) cannot relitigate old matters)
- Firestone v. Firestone, 76 F.3d 1205 (D.C. Cir. 1996) (establishes discretionary standard for reconsideration)
- Morrison v. Nat’l Australia Bank, 561 U.S. 247 (U.S. Supreme Court 2010) (anti-fraud securities claims in aftermarket context)
- Kattan v. District of Columbia, 995 F.2d 274 (D.C. Cir. 1993) (reconsideration cannot relitigate earlier arguments)