1 gibson, dunn & crutcher llp jonathan c....

UNDERWRITER DEFENDANTS' OPPOSITION TO MOTION TO VACATE JUDGMENT CASE NO. C-01-2661-MMC

Gibson, Dunn & Crutcher LLP

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GIBSON, DUNN & CRUTCHER LLP JONATHAN C. DICKEY, SBN 088226 PAUL J. COLLINS, SBN 187709 FREDRICK C. CROMBIE, SBN 244051 1881 Page Mill Road Palo Alto, California 94304 Telephone: (650) 849-5300 Facsimile: (650) 849-5333

Attorneys for Defendants GOLDMAN, SACHS & CO., MERRILL LYNCH & CO., MORGAN STANLEY DEAN WITTER, AND J.P. MORGAN

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

In re EXODUS COMMUNICATIONS, INC. SECURITIES LITIGATION

MASTER FILE NO. C-01-2661-MMC

This Document Relates To :

ALL ACTIONS.

UNDERWRITER DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO MOTION TO VACATE THE JUDGMENT PURSUANT TO RULES 59(e) AND 60 OF THE FEDERAL RULES OF CIVIL PROCEDURE

Case 3:01-cv-02661-MMC Document 373 Filed 10/06/2006 of 22

i UNDERWRITER DEFENDANTS' OPPOSITION TO MOTION TO VACATE JUDGMENT CASE NO. C-01-2661-MMC


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TABLE OF CONTENTS

Page

I. INTRODUCTION......................................................................................................... 1

II. BACKGROUND........................................................................................................... 3

III. ARGUMENT ................................................................................................................ 5

A. Intervenors Blacksmith-Boilermaker National Pension Fund’s And Ellen Brodsky’s Motion To Vacate The Judgment Does Not Address The Court’s Holding That It Lost Jurisdiction When It Dismissed Plaintiff Fox....................................................................... 5

B. Intervenors’ Motion To Vacate The Judgment And Reconsider The Court’s August 14, 2006 Order Dismissing The Action Should Be Denied Because Intervenors’ Motion Does Not Meet The Clear Standards For Such Motions Under Rules 59(e) and 60 Of The Federal Rules Of Civil Procedure.................................................... 8

1. The Intervenors’ Motion Does Not Present Any “Manifest Error Of Law Or Fact Upon Which The Judgment Is Based” For Purposes Of Rule 59(e) Or “Mistake” For Purposes Of Rule 60(b)................................................. 9

2. Intervenors’ Proffer Of “Newly Discovered Evidence” Is Not New And It Is Not Timely Under Either Rule 59(e) Or Rule 60. ................................................................................ 11

3. Intervenors’ Failure To Obtain and Provide Alleged Additional Evidence Was Not Inadvertent or Excusable Neglect. ............................................................................................... 13

IV. CONCLUSION........................................................................................................... 17


TABLE OF AUTHORITIES Page(s)

ii UNDERWRITER DEFENDANTS' OPPOSITION TO MOTION TO VACATE JUDGMENT CASE NO. C-01-2661-MMC


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CASES

Ackermann v. United States, 340 U.S. 193 (1950)..................................................................................................................... 8, 16

Allmerica v. Llewellyn, 139 F.3d 664 (9th Cir. 1997) ................................................................................................. 8, 15, 16

Bd. of Sch. Comm’rs v. Jacobs, 420 U.S. 128 (1975)....................................................................................................................... 6, 7

Becton v. Greene County Bd. of Ed., 32 F.R.D. 220 (E.D.N.C. 1963) ......................................................................................................... 6

Casey v. Albertson’s, Inc., 362 F.3d 1254 (9th Cir. 2004), cert. denied, 543 U.S. 870 (2004) ........................................................................................ 13, 15, 16

Casey v. Albertson's Inc., 632 F.3d 1254, 1260 (9th Cir. 2004) ............................................................................................... 13

Comm. for First Amend. v. Campbell, 962 F.2d 1517 (10th Cir. 1992) ................................................................................................. 11, 12

Engleson v. Burlington N. R. Co., 972 F.2d 1038 (9th Cir. 1992) ......................................................................................................... 15

Feature Realty, Inc. v. City of Spokane, 331 F.3d 1082 (9th Cir. 2003) ......................................................................................................... 13

Feature Realty, Inc. v. City of Spokane, 331 F.3d 1082 (9th Cir. 2003) ......................................................................................................... 11

Foster v. Center Township of LaPorte County, 798 F.2d 237 (7th Cir. 1986) ............................................................................................................. 6

Frischer v. Exodus Communications, Inc., N.D. Cal. Case No. CV-01-2697 (July 16, 2001) .............................................................................. 3

Guenther v. Cooper Life Sci., No. C-89-1823-MHP, 1992 Lexis U.S. Dist. 22601, (N.D. Cal. Apr. 7, 1992) .................................................................................................................... 7

Herbst v. Cook, 260 F.3d 1039 (9th Cir. 2001) ........................................................................................................... 8


iii UNDERWRITER DEFENDANTS' OPPOSITION TO MOTION TO VACATE JUDGMENT CASE NO. C-01-2661-MMC


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TABLE OF AUTHORITIES [Continued]

Page(s)

In re Exodus Communications, Inc. Sec. Litig., Master File No. C-01-2661 (Dec. 13, 2001) ...................................................................................... 3

In re Magourik, 693 F.2d 948 (1982)......................................................................................................................... 16

Int’l Allied Printing Trades Ass’n v. Am. Lithographers, Inc., 233 F.R.D. 554 (N.D. Cal. 2006)............................................................................................... 13, 15

Kennerly v. United States, 721 F.2d 1252 (9th Cir. 1983) ........................................................................................................... 7

Kona Enters., Inc. v. Bishop, 229 F.3d 877 (9th Cir. 2000) ........................................................................................................... 11

Latshaw v. Trainer Wortham & Co., 452 F.3d 1097 (9th Cir. 2006). ........................................................................................................ 13

Lierboe v. State Farm Mut. Ins. Co., 350 F.3d 1018 (9th Cir. 2003) ........................................................................................................... 6

Lusardi v. Xerox Corp., 975 F.2d 964 (3d Cir. 1992)........................................................................................................... 6, 7

McClune v. Shamah, 593 F.2d 482 (3d Cir. 1979)............................................................................................................... 5

McDowell v. Calderon, 197 F.3d 1253 (9th Cir. 1999) ........................................................................................................... 8

Mut. Produce, 119 F.R.D. at 620-21.......................................................................................................................... 7

Mut. Produce, Inc. v. Penn Cent. Trans. Co., 119 F.R.D. 619 (D. Mass. 1988)........................................................................................................ 6

Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (1993)................................................................................................................... 15, 16

Prudent Publishing Co. v. Myron Mfg. Corp., 722 F. Supp. 17 (S.D.N.Y. 1989)....................................................................................................... 7


iv UNDERWRITER DEFENDANTS' OPPOSITION TO MOTION TO VACATE JUDGMENT CASE NO. C-01-2661-MMC


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TABLE OF AUTHORITIES [Continued]

Page(s)

Rosenzweig v. Azurix Corp., 332 F.3d 854 (5th Cir. 2003) ............................................................................................................. 9

Ruthfield v. Exodus Communications, Inc., N.D. Cal. Case No. CV-01-2661 (July 12, 2001) .............................................................................. 3

Spacone v. Microsoft Corp., No. C-0304739, 2006 WL 1600675 (N.D. Cal. June 7, 2006) .................................................... 8, 10

Sze v. INS, 153 F.3d 1005 (9th Cir. 1998) ........................................................................................................... 6

Turner v. Burlington N. Santa Fe R.R. Co., 338 F.3d 1058 (9th Cir. 2003) ........................................................................................................... 8

United Bank of Ariz. v. Sun Mesa Corp., 119 F.R.D. 430 (D. Ariz. 1988) ......................................................................................................... 7

United States v. Alpine Land & Reservoir, Co., 984 F.2d 1047 (9th Cir. 1993) ..................................................................................................... 8, 16

Wade v. Kirkland, 118 F.3d 667 (9th Cir. 1997) ............................................................................................................. 7

Walters v. Edgar, 163 F.3d 430 (7th Cir. 1998) ............................................................................................................. 6

Zimmerman v. City of Oakland, 255 F.3d 734 (9th Cir. 2001) ..................................................................................................... 11, 13

OTHER AUTHORITIES

11 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2810.1 (2d ed. 1995) .................................................................. 8

RULES

Civil Local Rule 7-9(b)(2) ................................................................................................................... 11

Fed. R. Civ. P. 60 ................................................................................................................................... 8


1 UNDERWRITER DEFENDANTS' OPPOSITION TO MOTION TO VACATE JUDGMENT CASE NO. C-01-2661-MMC


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I. INTRODUCTION

Defendants Goldman, Sachs & Co., Merrill Lynch & Co., Morgan Stanley Dean Witter, and

J.P. Morgan (the “Underwriter Defendants”) respectfully submit this memorandum of points and

authorities in opposition to the motion filed by putative intervenors, the Boilermaker-Blacksmith

National Pension Fund and Ellen Brodsky (the “Intervenors”) to vacate this Court’s August 16, 2006

judgment in this action and, effectively, to reconsider its August 14, 2006 dismissal order.1 For the

reasons set forth below, Intervenors’ motion should be denied.2

Intervenors’ motion should be denied because there was no live case or controversy between

any of the parties in this case in August when the Court originally (and correctly) rejected the

Intervenors’ motion to intervene. The gravamen of Intervenors’ motion is that, despite the Court’s

May 9, 2006 order dismissing Plaintiff Martin Fox’s Section 11 claim based on his failure to

participate in the case, Fox nevertheless had standing to assert that claim, and the Court therefore

erred in concluding that there was no live case or controversy at the time it ruled on their intervention

motions in August. Intervenors’ current motion is based on a misunderstanding of this Court’s

subject matter jurisdiction and the fundamental Article III jurisdictional issue presented. Whether or

not Fox ever had standing to pursue a Section 11 claim, his claim was dismissed on May 9, 2006

because he unequivocally refused to prosecute it. At issue at the time was the fact that Fox ignored

defendants’ discovery requests for information relating to his alleged standing (among a host of other

subjects) and ignored this Court’s April 28, 2006 order to address his willingness to participate in the

litigation. A month later, on June 2, 2006, the Court issued an order dismissing the claims of the

other Section 11 plaintiff, Thomas Welch, finding that Welch never had standing to assert that claim.

1 Intervenors’ motion to vacate the judgment states that it is brought by the Boilermaker-Blacksmith National Pension Fund, Ellen Brodsky and certain unnamed “plaintiffs.” At the time the motion to vacate was filed, however, there were no longer any named plaintiffs remaining as parties in this litigation. The Court dismissed each of the Lead Plaintiffs (whose claims were dismissed on August 5, 2005) on April 28, 2006. Named Plaintiff Martin Fox was dismissed from this action on May 5, 2006. The last remaining Named Plaintiff, Thomas Welch, was dismissed from this action on June 2, 2006.

2 Exodus Communications’ former Chief Executive Officer, defendant Ellen Hancock, sets forth a number of reasons why Intervenors’ motion should be denied in her own brief in opposition to Intervenors’ motion, and the Underwriter Defendants join in those arguments.




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Thus, there were no remaining plaintiffs when the Court ruled on Intervenor’s original motion and,

therefore, no live case or controversy. Absent a live case or controversy, of course, the federal courts

lack subject matter jurisdiction under Article III of the United States Constitution.

Even aside from the fundamental jurisdictional issue, Intervenors’ motion to vacate the final

judgment would still have to be rejected because it flies in the face of the well-established principles

governing such motions under Rules 59(e) and 60. Intervenors argue that the Court’s August 14,

2006 judgment was predicated upon an erroneous assumption that Fox never had standing to assert a

Section 11 claim. In fact, the Court’s order was predicated upon a finding that Intervenors had failed

to satisfy their burden of demonstrating that Fox had standing — a finding that hardly constitutes the

kind of “manifest error” contemplated by Rule 59(e) given Fox’s repeated and willful failures to

comply with his discovery obligations and orders of this Court relating to that very issue. Likewise,

Intervenors suggest that “new” evidence in the form of brokerage statements conclusively

demonstrates that Fox did, indeed, have standing. Although the Intervenors would have this Court

believe that this evidence was not presented with their original motions to intervene because Fox’s

brokerage statements were not available (and through the exercise of due diligence could not have

been available) to them, the truth is that Intervenors’ counsel has had access to Fox’s brokerage

statements years before presenting the evidence as “new” in the context of this motion to vacate the

judgment. In the Boilermaker-Blacksmith Fund’s reply brief in support of its original motion to

intervene, the Fund’s counsel — the same law firm that represented Fox throughout this litigation —

“assure[d] the Court that [counsel] met with Fox and reviewed Fox’s personal investment records and

confirmed that those records reflected that Fox had in fact acquired the notes that are the subject of

this litigation.”3 Fox, of course, was required to produce those brokerage statements in response to

defendants’ discovery requests, but failed to do so, and the Intervenors do not even attempt an

explanation as to why this supposedly “new” evidence was not presented and could not have been

presented with their original motion.

3 See Plaintiffs’ Reply Brief In Support Of Motion For Order Allowing Boilermaker-Blacksmith National Pension Fund To Intervene As A Plaintiff, dated June 30, 2006, at 5:7-11.




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Intervenors’ fallback argument is to plead “excusable neglect” on the part of their counsel.

But the “neglect” they cite in support of their argument is not “excusable” at all. The evidence

Intervenors now seek to introduce was available to their counsel all along and Intervenors offer no

reason why it could not have been submitted earlier. Intervenors claim to be surprised that standing

was an issue raised in connection with defendants’ Rule 12(b)(1) motion to dismiss, but the Court’s

lack of subject matter jurisdiction following the dismissal of both of the named plaintiffs asserting

Section 11 claims was the central thrust of that motion and, in fact, had been raised on numerous

occasions throughout this litigation. And the Intervenors certainly knew that standing was in dispute

because they addressed the issue in the Boilermaker-Blacksmith’s papers in support of its motion to

intervene.4 That the Intervenors now regret that they failed to marshal certain evidence in their

possession in support of that motion is not a basis for a motion to vacate a judgment based on

“excusable neglect.” Accordingly, Intervenors’ attempt to shoehorn the facts into arguments that

would entitle them to relief under Rules 59(e) and/or 60(b) is misguided and should be rejected.

II. BACKGROUND

The original plaintiffs in this action — Michael Klein, Teresi Trucking, Inc., and William

Friedman — filed this action on July 12, 2001 and asserted claims under Section 10(b) of the

Securities Act of 1934 and SEC Rule 10b-5 against Exodus and certain of Exodus’ directors and

officers.5 A year later, on July 11, 2002, two new plaintiffs — Thomas Welch and Martin Fox —

joined the action and asserted, for the first time, claims against the Underwriter Defendants and

defendant Ellen Hancock under Section 11 of the Securities Act of 1933 based upon Exodus’

February 2001 secondary offering of common stock and convertible bonds. Plaintiff Welch was the

only named plaintiff who claimed to have purchased common stock in or traceable to Exodus’

4 See Plaintiff’s Reply Brief In Support Of Motion For Order Allowing Boilermaker-Blacksmith National Pension Fund To Intervene As A Plaintiff, dated June 30, 2006, at 5:4-6:8.

5 See Ruthfield v. Exodus Communications, Inc., N.D. Cal. Case No. CV-01-2661 (July 12, 2001); Frischer v. Exodus Communications, Inc., N.D. Cal. Case No. CV-01-2697 (July 16, 2001); In re Exodus Communications, Inc. Sec. Litig., Master File No. C-01-2661 (Dec. 13, 2001).




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February 2001 secondary stock offering, and plaintiff Fox was the only named plaintiff who claimed

to have purchased the convertible bonds in that offering. On August 5, 2005 this Court issued an

order dismissing without leave to amend plaintiffs’ Section 10(b) claim, but allowing the Section 11

claims asserted by plaintiffs Welch and Fox to proceed.

After nearly four years of litigation, plaintiffs admitted for the first time in March 2006 that

the only named plaintiff who claimed to have standing to assert a Section 11 claim on behalf of

purchasers of Exodus’ convertible bonds — plaintiff Fox — was not, in fact, a willing litigant. This

important fact surfaced only because defendants requested in discovery documents demonstrating

that Fox had purchased convertible bonds in, or traceable to, Exodus’ February 2001 offering. In

response to those requests, plaintiffs stated that “Plaintiff [Fox] does not presently intend to seek

appointment as a class representative or to pursue any claim, other than participating as an absent

class member.” On April 28, 2006, this Court stated that “Fox may not elect to remain in the action

as a named plaintiff and decline to participate in discovery” and, therefore, ordered Fox to state

definitively whether he intended to serve as a representative plaintiff or not. Fox ignored that order.6

Accordingly, on May 9, 2006, this Court granted defendants’ motion to dismiss plaintiff Fox’s claim

for failure to prosecute.

Similarly, although defendants raised standing arguments as to plaintiff Welch in their

motions to dismiss and plaintiffs, in response, argued vigorously that such objections were not well

founded, after nearly four years of litigation plaintiffs finally admitted in the context of discovery that

plaintiff Welch did not purchase Exodus stock in the February 2001 offering and could not trace the

stock he purchased to that offering.7 Accordingly, on June 2, 2006, this Court granted defendants’

motion for summary judgment with respect to Welch.

6 In its April 28, 2006 Order, the Court also dismissed plaintiffs Klein, Teresi Trucking and Friedman, none of whom claimed to have purchased securities in or traceable to Exodus’ February 2001 offerings and none of whom, therefore, could have had standing to pursue Section 11 claims allegedly arising out of those offerings.

7 Welch admitted in disclosures filed with the July 11, 2002 First Amended Complaint that he purchased Exodus stock at a price demonstrating that the transactions could only have occurred in the secondary market.




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Rather than seek reconsideration of one or both of the Court’s orders concerning Fox and

Welch, plaintiffs’ counsel filed motions to intervene on behalf of two entirely new parties — the

Boilermaker-Blacksmith National Pension Fund (on behalf of convertible bond purchasers) and Ellen

Brodsky (on behalf of common stock purchasers).8 On August 14, 2006, however, the Court issued

an order in which it (1) granted defendants’ motion to dismiss on the grounds that the Court ceased to

have subject-matter jurisdiction in this action when it dismissed all of the named plaintiffs and

(2) denied the motions to intervene. The final judgment was entered on August 16, 2006.

The Intervenors now seek to vacate the Court’s entry of final judgment, arguing that Fox had

standing all along and that, as a result, their motions to intervene somehow survived dismissal of all

of the claims of all of the named plaintiffs. The Intervenors are wrong, and this Court should reject

their invitation to vacate the final judgment.

III. ARGUMENT

A. Intervenors Blacksmith-Boilermaker National Pension Fund’s And Ellen Brodsky’s Motion To Vacate The Judgment Does Not Address The Court’s Holding That It Lost Jurisdiction When It Dismissed Plaintiff Fox.

In its August 14, 2006 dismissal order, this Court recognized that “intervention will not be

permitted to breathe life into a nonexistent lawsuit.” August 14, 2006 Order at 2:13-15 (quoting

McClune v. Shamah, 593 F.2d 482, 486 (3d Cir. 1979)). The Court recognized that it ceased to have

subject-matter jurisdiction — that is, that this became a “nonexistent lawsuit” — when it (a)

dismissed plaintiff Fox for failure to prosecute “after he refused to participate in discovery, including

discovery with respect to standing, and disobeyed the Court’s order to file a declaration stating

whether he wished to proceed as a named plaintiff” and (b) dismissed plaintiff Welch “on the ground

that Welch lacked standing.” August 14, 2006 Order at 2:17-22.

8 Brodsky’s motion to intervene was filed on May 5, 2006—the same day Fox was required by the Court’s April 28, 2006 Order to (but did not) file a statement as to whether or not he intended to prosecute his alleged Section 11 claim. The Boilermaker-Blacksmith National Pension Funds’ motion was filed May 19, 2006 — ten days after the Court dismissed Fox’s Section 11 claim.




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Whether or not Fox ever had standing to pursue a Section 11 claim, this Court’s subject-

matter jurisdiction over his claims ended when it dismissed him from the lawsuit for failure to

produce evidence relating to his standing, among other subjects. See, e.g. Bd. of Sch. Comm’rs v.

Jacobs, 420 U.S. 128, 130 (1975) (affirming dismissal of class action and rejection of motions to

intervene filed thereafter on subject-matter jurisdiction grounds where plaintiffs’ claims were mooted

prior to class certification); Sze v. INS, 153 F.3d 1005, 1010 (9th Cir. 1998) (denying plaintiffs’

request to remand and permit intervention of unnamed class members where plaintiffs’ claims were

mooted prior to class certification); Lusardi v. Xerox Corp., 975 F.2d 964, 984-85 (3d Cir. 1992)

(affirming denial of motions to intervene where plaintiffs had previously been dismissed and “there

[was] no live case or controversy into which the applicants may intervene”); Mut. Produce, Inc. v.

Penn Cent. Trans. Co., 119 F.R.D. 619, 621 (D. Mass. 1988) (denying motions to intervene on

subject-matter jurisdiction grounds where parties stipulated to dismissal prior to court’s ruling on

intervention motions); Becton v. Greene County Bd. of Ed., 32 F.R.D. 220, 223 (E.D.N.C. 1963)

(denying motion to intervene after case had been dismissed).9

Intervenors’ motion to vacate the judgment, however, is predicated upon their notion that, if

they had produced evidence with their motions to intervene that Fox had standing all along — despite

Fox’s failure to produce such evidence himself — their motion to intervene would have been

meritorious. See Intervenors’ Brief at 6-7. Based on that assumption, Intervenors argue that they

should be permitted to remedy their prior failure to produce such evidence after entry of judgment.

9 Plaintiffs and Intervenors do not contend that Welch ever had standing and, therefore, concede that the subject matter jurisdiction required under Article III cannot be found in reliance on his claims. It is well-established that a motion to intervene must be denied where the original plaintiff never had standing. See Lierboe v. State Farm Mut. Ins. Co., 350 F.3d 1018, 1023 (9th Cir. 2003) (reversing trial court’s order permitting intervention by new plaintiffs where plaintiff never had standing); Walters v. Edgar, 163 F.3d 430, 432 (7th Cir. 1998) (holding that where “the district court never acquired jurisdiction over the present suit, all previous rulings in this litigation in the district court should be vacated”); Foster v. Center Township of LaPorte County, 798 F.2d 237, 244-45 (7th Cir. 1986) (affirming dismissal on subject-matter jurisdiction grounds, and denying motion to intervene, where the sole named plaintiff “never had standing” to challenge city ordinance and where “she never was a member of the class she was named to represent”). Thus, neither the Boilermaker-Blacksmith Fund nor Brodsky may intervene this action based on those claims.




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But Fox’s standing is beside the point. The Intervenors’ motion to intervene is dependent

upon whether the Court correctly decided defendants’ motion to dismiss Fox’s claim for failure to

prosecute — not whether Fox had standing in the first instance. If the Court correctly dismissed

Fox’s Section 11 claim in May, there was no longer any case or controversy over which the Court

could exercise jurisdiction. See Jacobs, 420 U.S. at 129-30 (dismissing action where plaintiff’s

claims were rendered moot before motions to intervene were decided and before any class

certification issues were addressed); Lusardi, 975 F.2d at 974-83 (“Normally when claims of the

named plaintiffs become moot before class certification, dismissal of the action is required.”);

Prudent Publishing Co. v. Myron Mfg. Corp., 722 F. Supp. 17, 21-22 (S.D.N.Y. 1989) (holding an

affidavit disclaiming a party’s willingness to prosecute a claim and subsequent dismissal of that

claim divested the court of jurisdiction); Mut. Produce, 119 F.R.D. at 620-21 (holding “[i]ntervenors

were not named parties when plaintiffs and defendants filed their stipulations of dismissal, nor did

their [earlier] filing of a motion to intervene give them party status,” and dismissing the action

because “the stipulations of dismissal were effective when filed, [and] there is no action in which to

intervene . . . .”). Intervenors challenge only the Court’s ruling with respect to Fox’s standing. They

do not contend that defendants’ motion to dismiss for failure to prosecute was incorrectly decided in

May and, therefore, do not lay a foundation upon which this Court could have exercised jurisdiction

and granted their motions to intervene in August. See Jacobs, 420 U.S. at 129-30; Lusardi, 975 F.2d

at 974-83.10

10 In their Opposition to defendant Hancock’s Motion to Dismiss For Lack Of Subject Matter Jurisdiction, Intervenor’s and plaintiffs’ counsel cited to a number of cases in support of their contention that the Court retained jurisdiction in this case notwithstanding the dismissal of all of the named plaintiffs. Plaintiffs’ citations were misplaced. Plaintiffs primarily relied on Kennerly v. United States, 721 F.2d 1252 (9th Cir. 1983), and United Bank of Ariz. v. Sun Mesa Corp., 119 F.R.D. 430 (D. Ariz. 1988). Neither case expressly considered the courts’ jurisdictional power to entertain motions to intervene when, as here, every named plaintiff in an uncertified putative class action already had been dismissed. Nor would those courts have had the opportunity to do so, because in Kennerly the named plaintiff retained monetary claims sufficient to provide the court with an ongoing “case or controversy” (Kennerly, 721 F.2d at 1258), and in United Bank the court had not yet dismissed the named plaintiff or entered final judgment depriving it of jurisdiction (United Bank, 119 F.R.D. at 432 n.1). Likewise, in Guenther v. Cooper Life Sciences, No. C-89-1823-MHP, 1992 Lexis U.S. Dist. 22601, at *25-27 (N.D. Cal. Apr. 7, 1992), the court granted the defendants’ motion for

[Footnote continued on next page]




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B. Intervenors’ Motion To Vacate The Judgment And Reconsider The Court’s August 14, 2006 Order Dismissing The Action Should Be Denied Because Intervenors’ Motion Does Not Meet The Clear Standards For Such Motions Under Rules 59(e) and 60 Of The Federal Rules Of Civil Procedure.

Intervenors’ motion to vacate the judgment does not come close to meeting the requirements

set forth in Rules 59(e) and 60(b), upon which Intervenors rely. In Turner v. Burlington N. Santa Fe

R.R. Co., 338 F.3d 1058 (9th Cir. 2003), the Ninth Circuit explained that “[t]here are four grounds

upon which a Rule 59(e) motion may be granted: (1) the motion is ‘necessary to correct manifest

errors of law or fact upon which the judgment is based;’ (2) the moving party presents ‘newly

discovered or previously unavailable evidence;’ (3) the motion is necessary to ‘prevent manifest

injustice;’ or (4) there is an ‘intervening change in controlling law.’” Id. at 1063 (quoting

McDowell v. Calderon, 197 F.3d 1253, 1254 n.1 (9th Cir. 1999), and 11 C. Wright, A. Miller & M.

Kane, Federal Practice and Procedure § 2810.1 (2d ed. 1995)); accord Herbst v. Cook, 260 F.3d

1039, 1044 (9th Cir. 2001) (holding that “[a] motion under Rule 59(e) ‘should not be granted, absent

highly unusual circumstances, unless the district court is presented with newly discovered evidence,

committed clear error, or if there is an intervening change in controlling law’”) (internal citation

omitted); Spacone v. Microsoft Corp., No. C-0304739, 2006 WL 1600675, at *1 (N.D. Cal. June 7,

2006 (same).

Likewise, Rule 60(b) provides that “the court may relieve a party or a party’s legal

representative from a final judgment, order, or proceeding” only where there has been:

(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence would not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud . . ., misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied . . .; or (6) any other reason justifying relief from the operation of the judgment.

[Footnote continued from previous page]

summary judgment with respect to only one of three plaintiffs and continued to exercise subject matter jurisdiction over the claims asserted by the two other plaintiffs not affected by the summary judgment ruling. Plaintiffs also cited to Wade v. Kirkland, 118 F.3d 667, 668 (9th Cir. 1997), but the trial court in that case considered possible intervention only after a class certification motion had been made and denied — a key fact that the court held brought it within a narrow exception to the general rule requiring dismissal of class actions where the named plaintiffs’ claims are mooted. No such exception applies in this case.




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Although Rule 60(b) provides the court with the power and discretion to vacate judgment, it is well-

established that such relief is only appropriate in “extraordinary circumstances.” Allmerica v.

Llewellyn, 139 F.3d 664, 666 (9th Cir. 1997) (quoting Ackermann v. United States, 340 U.S. 193,

199-201 (1950)); see also United States v. Alpine Land & Reservoir, Co., 984 F.2d 1047, 1049 (9th

Cir. 1993) (stating that Rule 60(b) “is to be utilized only where extraordinary circumstances

prevented a party from taking timely action to prevent or correct an erroneous judgment”); 11 C.

Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2810.1 at 124, 128

(“reconsideration of a judgment after its entry is an extraordinary remedy which should be used

sparingly”).

Intervenors offer three arguments in support of their request for relief under Rules 59(e) and

60(b) — that the Court failed to consider Fox’s unsubstantiated certification as evidence that Fox had

standing all along (see Intervenors’ Brief at 3:17-4:3); that they have discovered “new evidence” in

support of Fox’s standing (id. at 6:8-11, 7:15-19); and, finally, that Intervenors’ failure to present

evidence constitutes “excusable neglect” on the part of their counsel (id. at 6:79). None of these

arguments addresses the fact that this Court no longer had subject-matter jurisdiction after it granted

defendants’ motion to dismiss Fox’s Section 11 claim for failure to prosecute. But even if the Court

somehow retained jurisdiction after it dismissed Fox, none of the Intervenors’ arguments in support

of their request for an order vacating the judgment satisfies the well-established standards for

granting relief under Rules 59(e) and 60.

1. The Intervenors’ Motion Does Not Present Any “Manifest Error Of Law Or Fact Upon Which The Judgment Is Based” For Purposes Of Rule 59(e) Or “Mistake” For Purposes Of Rule 60(b).

Intervenors contend that the Court erred in concluding that “Brodsky and the Fund have not

met their burden of demonstrating Fox had standing to assert a § 11 claim” because Fox filed a

certification attesting to his standing on September 9, 2003. Intervenors’ Brief at 3:17-4:3.

Intervenors suggest that Fox’s unsubstantiated assertion may have been lost “[i]n the mass of

voluminous pleadings submitted” in connection with their motions to intervene and defendants’ Rule

12(b)(1) motion to dismiss. Id. at 4:17-18.




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The difficulty with Intervenors’ argument is that Intervenors expressly raised it in their

motion papers11 and cannot explain why the Court’s failure to credit Fox’s unsubstantiated

certification in its dismissal order reflects the kind of “manifest error . . . of fact” contemplated as a

basis for relief from a judgment for purposes of Rule 59(e). See, e.g., Rosenzweig v. Azurix Corp.,

332 F.3d 854, 863 (5th Cir. 2003) (noting that a “motion to alter or amend the judgment under Rule

59(e) ‘must clearly establish either a manifest error of law or fact or must present newly discovered

evidence’ and ‘cannot be used to raise arguments which could, and should, have been made before

the judgment is issued’”) (citations omitted); Spacone, 2006 WL 1600675, at *2-3 (denying motion

to vacate judgment, explaining that plaintiff’s failure to present an argument based upon known facts

at time of summary judgment motion did not warrant post-judgment relief). Given Fox’s repeated

refusals to comply with discovery requests and the express orders of this Court directly relating to

Fox’s standing to assert a Section 11 claim, the Court’s finding that Intervenors failed to satisfy their

burden of demonstrating Fox’s standing simply by relying on his unsubstantiated certification was

not erroneous, let alone “manifest[ly]” so.

Further, Intervenors’ reliance on Fox’s unsubstantiated lead plaintiff certification effectively

seeks to transmute a rule of procedure into a rule of evidence that creates a presumption of standing.

Nothing in the Private Securities Litigation Reform Act (pursuant to which the certification was

originally filed) purports to elevate the lead plaintiff certification to an evidentiary presumption. If

Intervenors’ argument were correct, no securities plaintiff could ever be dismissed for lack of

standing so long as that plaintiff has filed a lead plaintiff certification — whether or not the

certification is supported by any evidence. Thus, even if the Court somehow retained subject-matter

jurisdiction after its May 9, 2006 order in which the Court dismissed Fox’s Section 11 claim (and for

11 See Plaintiffs’ Reply Brief In Support Of Motion For Order Allowing Boilermaker-Blacksmith National Pension Fund To Intervene As A Plaintiff, dated June 30, 2006, at 5:7-11.




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the reasons set forth above, it did not), the Intervenors still would not be entitled to the relief they

seek.12

2. Intervenors’ Proffer Of “Newly Discovered Evidence” Is Not New And It Is Not Timely Under Either Rule 59(e) Or Rule 60.

Intervenors also contend that if Fox’s unsubstantiated certification is not sufficient to warrant

an order vacating the judgment, they are now prepared to “submit . . . additional evidence”

(Intervenors’ Brief at 6:8-11) consisting of brokerage statements obtained from Fox’s brokerage firm

(id. at 7:15-19). But Intervenors’ contention that the evidence they now proffer is “new” is directly

contradicted by their own intervention motions. On page five of Boilermaker-Blacksmith’s reply

brief in support of its motion to intervene, Boilermaker-Blacksmith’s counsel “assure[d] the Court

that he met with Fox and reviewed Fox’s personal investment records and confirmed that those

records reflected that Fox had in fact acquired the notes that are the subject of this litigation.” See

Plaintiffs’ Reply Brief In Support Of Motion For Order Allowing Boilermaker-Blacksmith National

Pension Fund To Intervene As A Plaintiff, dated June 30, 2006, at 5:7-11. Thus, the evidence

Intervenors now proffer is not, by their own admission, “new.” Accordingly, the proffer has no place

in the context of a motion to vacate a judgment. Feature Realty, Inc. v. City of Spokane, 331 F.3d

1082, 1093 (9th Cir. 2003) (rejecting Rule 60(b)(1) and (2) motion where movant failed to meet its

burden of showing that the proffered evidence was not available prior to entry of judgment);

Zimmerman v. City of Oakland, 255 F.3d 734, 740 (9th Cir. 2001) (“[A] party that fails to introduce

facts in a motion or opposition cannot introduce them later in a motion to amend by claiming that

they constitute ‘newly discovered evidence’ unless they were previously unavailable”).

Even if the proffer consisted of new evidence, the Intervenors’ proffer is too late. It is well-

established that new evidence will be considered only if (a) it was not available before entry of the

12 Intervenors also suggest that the Court overlooked its own August 19, 2003 Order, in which the Court rejected defendants’ argument that plaintiffs’ First Amended Complaint should be dismissed because Fox and Welch lacked standing to pursue claims under Section 11. See Intervenors’ Brief at 4:10-14. The Court’s August 19, 2003 Order, of course, is not evidence of Fox’s standing and, in the context of a motion to dismiss, is not a judicial finding that standing exists. To the contrary, the Court found merely that, assuming all of the factual allegations set forth in the First Amended Complaint to be true, both Fox and Welch would have standing to pursue their alleged Section 11 claims.




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judgment, and (b) could not have been made available through the exercise of due diligence. See,

e.g., Kona Enters., Inc. v. Bishop, 229 F.3d 877, 890 (9th Cir. 2000) (holding that “[a] Rule 59(e)

motion may not be used to raise arguments or present evidence for the first time when they could

reasonably have been raised earlier in the litigation”) (emphasis in original); Comm. for First

Amend. v. Campbell, 962 F.2d 1517, 1523 (10th Cir. 1992) (holding that “[w]hen supplementing a

Rule 59(e) motion with additional evidence, the movant must show either that the evidence is newly

discovered [and] if the evidence was available at the time of the decision being challenged, that

counsel made a diligent yet unsuccessful effort to discover the evidence”) (alteration in original); see

also Civil Local Rule 7-9(b)(2) (stating that evidence presented in support of motion for

reconsideration must be “new material facts . . . occurring after the time of such order”). The only

“new” evidence proffered by the Intervenors, however, is an account statement allegedly obtained

from Fox’s stock broker. See Intervenors’ Brief at 7:15-18. But Intervenors do not explain why the

brokerage statement was not available previously (particularly given that their counsel admits that he

personally reviewed them before the litigation was commenced) or could not have been obtained

through the exercise of due diligence prior to entry of the judgment. Indeed, the facts strongly

suggest otherwise.

In Campbell, the plaintiff sought reconsideration of a district court’s grant of summary

judgment as to plaintiff’s claims for injunctive and monetary relief arising from university officials’

suspension of a screening of “The Last Temptation of Christ.” 962 F.2d at 1519-20. As part of their

motion for reconsideration, the plaintiff proffered two declarations concerning mostly historical

instances of censorship by the defendants along with other summary judgment related materials. Id.

at 1524 n.9. The district court determined that “the proffered evidence did not warrant

reconsideration because it had not been discovered subsequent to the order granting summary

judgment, the [p]laintiffs had not demonstrated reasonable diligence and the evidence would not

produce a different result.” Id. at 1524. The Tenth Circuit subsequently affirmed:

Absent in this record, however, is little explanation why [p]laintiffs waited three months to submit additional evidence, and then as part of a Rule 59(e) motion. When one considers that [p]laintiffs submitted largely historical evidence . . . it is evident that the [p]laintiffs have not met their burden of showing diligence. They have not demonstrated that the evidence was newly discovered or unavailable in a more timely




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fashion through the exercise of diligence. Plainly the district court did not abuse its discretion in denying [p]laintiff’s motion for reconsideration.

Id. Intervenors’ motion is no different. It does not “demonstrat[e] that the evidence was newly

discovered or unavailable in a more timely fashion.” Id. Indeed, Intervenors’ counsel admits that the

proffered brokerage statements not only are not new evidence, but were in counsel’s files all along.

Therefore, Intervenors have failed to carry their burden of proving that the evidence is “new” and

could not have been discovered through the exercise of reasonable diligence.

3. Intervenors’ Failure To Obtain and Provide Alleged Additional Evidence Was Not Inadvertent or Excusable Neglect.

The Intervenors alternatively request Rule 60(b)(1) relief on the grounds of “mistake,

inadvertance or excusable neglect.” See Intervenors’ Brief at 6:7-9. As this Court recently

recognized, “[t]here is no per se rule governing what constitutes . . . ‘excusable neglect’ and district

courts are instructed to take into account all the circumstances surrounding a party’s act or omission.”

Int’l Allied Printing Trades Ass’n v. Am. Lithographers, Inc., 233 F.R.D. 554, 555 (N.D. Cal. 2006).

It is well established, however, that “Rule 60(b) is not intended to remedy the effects of a deliberate

and independent litigation decision that a party later comes to regret. . . . Rule 60(b)(1) relief is

unavailable to parties who simply misunderstand the legal consequences of their deliberate acts.”

Latshaw v. Trainer Wortham & Co., 452 F.3d 1097, 1100-01 (9th Cir. 2006).

Intervenors here identify three possible bases for their “excusable neglect” argument:

(a) their failure to present the Court with evidence of Fox’s bond purchases (Intervenors’ Brief at 6:7-

10); (b) Hancock’s motion to dismiss “did not argue that . . . plaintiffs lacked standing” (id. at 6:18-

23); and (c) they misread the Court’s April 28, 2006 Order such that they did not provide the ordered

statement from Fox as to whether he was willing to proceed as a named plaintiff (id. at 5:23-26).

None of these arguments satisfies the well-established grounds for Rule 60(b)(1) relief.

In Casey v. Albertson’s, Inc., 362 F.3d 1254, 1259 (9th Cir. 2004), cert. denied, 543 U.S. 870

(2004), the plaintiff sought Rule 60(b)(1) relief from the district court’s entry of summary judgment

in favor of the defendant on claims of sexual harassment and discrimination. Casey, 362 F.3d 1254

at 1259. The plaintiff’s motion was based on claims of attorney malpractice and argued that by use

of an investigation service of which she had just become aware, she was able to locate new evidence




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her attorneys had previously failed to find. Id. at 1256. The district court ruled that the delay in

finding the new evidence was inexcusable and denied the Rule 60(b)(1) motion. Id. In affirming, the

Ninth Circuit highlighted the deficiencies of the plaintiff’s motion, noting that the she did not explain

why she was unable to discover the new evidence until after entry of summary judgment. Id. at 1260.

Further, the Court noted that plaintiff’s attorney’s failure to locate the evidence was not “excusable

neglect”: “As a general rule, parties are bound by the actions of their lawyers, and alleged attorney

malpractice does not usually provide a basis to set aside a judgment pursuant to Rule 60(b)(1).” Id.13

Casey is directly on point. Here, just as in Casey, the Intervenors’ motion for Rule 60(b)(1)

relief offers no explanation as to why they could not locate this “new” evidence prior to the Court’s

dismissal of the case (and, as described above, the evidence is strongly to the contrary). Intervenors’

counsel admits that he personally reviewed evidence concerning Fox’s standing to assert a Section 11

claim prior to the commencement of the action. Moreover, Intervenors should not have been

surprised that standing was an issue given that questions regarding Fox’s standing were clearly

present no later than October 23, 2002, when Underwriter Defendants raised the issue of Fox’s

standing in their motion to dismiss the First Amended Complaint. The issue was raised again in the

parties’ December 30, 2005 joint case management conference statement, and yet again no later than

January 17, 2006, when defendant Hancock propounded document requests and interrogatories to

Fox directly related to standing issues. Yet, in contravention of the most rudimentary rules of

13 Although the court in Casey noted in dicta that the alleged new evidence would not have changed the outcome, its actual holding was clear: "[plaintiff's] failure to look for and find a key witness until after the lawsuit was over was not excusable neglect under rule 60(b)(1)." Casey v. Albertson's Inc., 632 F.3d 1254, 1260 (9th Cir. 2004) (emphasis in original); accord Feature Realty, Inc. v. City of Spokane, 331 F.3d 1082, 1093 (9th Cir. 2003) ("[e]vidence 'in the possession of the other party before the judgment was rendered is not newly discovered . . . .'") (citations omitted); Zimmerman v. City of Oakland, 255 F.3d 734, 740 (9th Cir. 2001) ("a party that fails to introduce facts in a motion or opposition cannot introduce them later in a motion to amend by claiming they constitute 'newly discovered evidence' unless they were previously unavailable"). The result should be no different here. Intervenors' counsel was well aware of the allegedly "new evidence" well before the Court issued its August 14, 2006 dismissal order. See Plaintiffs' Reply Brief In Support Of Motion For Order Allowing Boilermaker-Blacksmith National Pension Fund To Intervene As A Plaintiff, dated June 30, 2006, at 5:7-11. And Intervenors' allegedly "new evidence" would not change the outcome of this action because on May 19, 2006, Fox was dismissed for failure to prosecute, not for lack of standing.




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discovery, Fox elected to withhold the very evidence Intervenors now rely upon as “new.” And even

if Intervenors could not obtain the evidence from their counsel’s own files, they could have obtained

it from Fox (as they belatedly did) or from Fox’s brokerage firm. Intervenors’ motion papers simply

fail to explain why their counsel could not have obtained this allegedly new evidence while they were

aggressively seeking discovery from other parties.14

Similarly, Intervenors fail to explain why their attorneys’ neglect — if there indeed was any

— is “excusable” in the circumstances of this case. “[N]either ignorance nor carelessness on the part

of the litigant or his attorney provide grounds for relief under Rule 60(b)(1).” Allmerica, 139 F.3d at

666 (quoting Engleson v. Burlington N. R. Co., 972 F.2d 1038, 1043 (9th Cir. 1992)). Neither

declaration attached to Intervenors’ motion offers any justification for their failure to come forward

with the “new” evidence earlier. See Decl. of John K. Grant In Support Of Motion To Vacate, dated

August 30, 2006, at 1; Decl. of Martin Fox In Support Of Motion To Vacate, dated August 31, 2006,

at 1. Nor do they explain when or how this “new” evidence was found. And even if Intervenors’

counsel did not already have Fox’s brokerage statements or if Fox refused to provide counsel with

copies, counsel clearly was aware that evidence supporting Fox’s standing claim would be important.

Defendants specifically requested such evidence in document requests and raised issues concerning

Fox’s standing in their briefs in opposition to Intervenors’ original motions. Yet Intervenors proffer

no evidence that counsel at any time requested that Fox (or his broker) provide them with copies of

the account statements, as ultimately occurred after the judgment was entered. Such carelessness

amounts to inexcusable neglect that warrants denial of Intervenors’ motion for Rule 60(b)(1) relief.

14 Intervenors’ claim of surprise is further contradicted by the briefing the parties submitted to the Court in connection with their motions to intervene. On June 2, 2006, defendant Hancock stated that “[w]hether Fox ever had standing is hotly disputed . . . . [T]here is absolutely no reason to believe that Fox ever had Article III standing.” Defendant Ellen Hancock’s Surreply To Plaintiffs’ Motion To Add Or In The Alternative, To Intervene, An Additional Named Plaintiff at 3:2-4. On June 23, 2006, defendant Hancock stated that “[t]here is no reason to believe Fox ever had standing to bring a claim.” Defendant Ellen Hancock’s Opposition to Plaintiffs’ Motion For Order Allowing Boilermaker-Blacksmith National Pension Fund to Intervene As A Plaintiff at 2:13. Likewise, on June 30, 2006, defendant Hancock stated that “[f]ormer plaintiffs’ counsel assert, without any evidence, that Fox did have standing at one time. But former plaintiffs’ counsel have failed to meet their burden to produce evidence to support subject matter jurisdiction.” Defendant Ellen Hancock’s Reply In Support Of Motion To Dismiss For Lack Of Subject Matter Jurisdiction at 2:5-7.




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See Casey, 362 F.3d at 1260 (finding attorney’s failure to obtain available evidence did not amount to

excusable neglect); see also Allmerica, 139 F.3d at 666 (holding that “counsel’s failure to plead an

affirmative defense of waiver . . . does not provide a basis for equitable relief under Rule 60(b)(1)”);

Engleson, 972 F.2d at 1044 (holding that counsel’s ignorance of a statute governing the dispute did

not constitute excusable neglect); Am. Lithographers, 233 F.R.D. at 555-56 (holding that counsel’s

failure to note that settlement agreement and stipulated order called for dismissal with prejudice was

not excusable neglect).

Under these circumstances, it is not surprising that the cases Intervenors rely upon for their

“excusable neglect” argument are easily distinguished. Intervenors first cite to Pioneer Inv. Servs.

Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (1993), for the proposition that a Rule 60(b)(1)

movant does not have to show that he is faultless. See Intervenors’ Brief at 6:11-18. But the

Supreme Court in Pioneer Investment Services specifically required courts evaluating “excusable

neglect” arguments under Bankruptcy Rule 9006(b)(1) to consider, among other things, the reason

for the delay and whether the delay was incurred in good faith. See. id at 395. Intervenors carry the

burden of establishing excusable neglect, yet facts suggesting good faith neglect are notably absent

from Intervenors’ motion. See Casey, 362 F.3d at 1260.

Intervenors also cite to In re Magourik, 693 F.2d 948 (1982), for the proposition that Rule

60(b)(1) relief should be “applied liberally.” See Intervenors’ Brief at 6:13-7:5. Nothing could be

further from the truth. Time and again, in Magourik and cases subsequently decided, the Ninth

Circuit has held that Rule 60(b)(1) relief should be granted only in “extraordinary circumstances.”

See, e.g., Allmerica, 139 F.3d at 666 (quoting Ackermann, 340 U.S. at 199-201); In re Magourik, 639

F.2d at 950 (“In this context, ‘excusable neglect is very strictly construed. It requires . . . a finding of

extraordinary circumstances, where excusing the delay is necessary to avoid an injustice.”); see also

Ackermann, 340 U.S. at 199-201; Alpine Land & Reservoir, Co., 984 F.2d at 1049. In short, this is

not an “extraordinary circumstance” warranting Rule 60(b)(1) relief. Rather, Intervenors sat on their

hands, failed to marshal potential evidence readily available to them and only now complain when

judgment has been rendered against them. The “voluntary, deliberate, free, untrammeled choice” of




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Intervenors and their counsel not to produce the supposed “new” evidence before final judgment was

rendered cannot support a finding of excusable neglect. Ackerman, 340 U.S. at 200.

Finally, Intervenors state that plaintiffs’ counsel misread the Court’s April 28, 2006 Order, in

which the Court directed Fox to file a declaration no later than May 5, 2006 “stating whether he

desires to proceed as a named plaintiff” and did not believe that a response from Fox was necessary

“if he did not intend to proceed.” Intervenors’ Brief at 5:24-25. If Intervenors intend to suggest an

independent basis for an excusable neglect argument based on counsel’s misreading of the April 28,

2006 Order, that argument must rejected for the simple reason that counsel’s error did not affect the

outcome — Fox was dismissed from the action just as he wanted to be.

IV. CONCLUSION

For all of the foregoing reasons, defendants Goldman, Sachs & Co., Merrill Lynch & Co.,

Morgan Stanley Dean Witter, and J.P. Morgan respectfully request that this Court enter an order

denying the motion by the Boilermaker-Blacksmith National Pension Fund and Ellen Brodsky to

vacate the Court’s judgment and to reconsider its order denying their motions to intervene in this

action.

DATED: October 6, 2006

GIBSON, DUNN & CRUTCHER LLP

By: /s/ Paul J. Collins Paul J. Collins

Attorneys for Defendants GOLDMAN, SACHS & CO., MERRILL LYNCH & CO., MORGAN STANLEY DEAN WITTER, and J.P. MORGAN

100079432_3.DOC


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