In Re HOMESTORE.COM, INC. SECURITIES LITIGATION

347 F. Supp. 2d 811, 2004 U.S. Dist. LEXIS 25274, 2004 WL 2792450

Opinion

ORDER CLARIFYING PRIOR ORDER OF MAY 11, 2004

PECHMAN, District Judge.

This matter comes before the Court on Defendant PricewaterhouseCoopers LLP’s (“PwC”) motion for clarification of the Court’s May 11, 2004, order on scienter, pursuant to Federal Rule of Civil Procedure 59(e) and Local Rule (WAWD) CR 7(h). Specifically, PwC seeks an order modifying the Court’s prior order to include a determination that PwC did not “knowingly” commit securities violations, effectively entering summary judgment as to PwC’s potential joint and several liability under 15 U.S.C. § 78u-4(f)(2)(A) (2004). That statutory provision allows a defendant to be held jointly and severally liable only if the trier of fact specifically determines a defendant to have “knowingly committed a violation of the securities laws.” (Id.). PwC argues that the Court implicitly held that no issue of fact exists as to this higher level of scienter when it held that “[wjhether PwC’s failure to uncover the true nature of these transactions sooner was excusable, negligent, or reckless, is a determination to be made by the trier of fact.” (May 11, 2004, Order at 21).

Having considered PwC’s motion for clarification, and having determined that no response from opposing counsel would be needed, the Court hereby clarifies its prior order as follows. The issue now raised by PwC was not one that was briefed by the parties or argued at oral argument. The briefing makes no explicit reference to the proportionate liability provision at 15 U.S.C. § 78u-4(f)(2). The issue of whether the evidence presented would support a finding that PwC “knowingly” committed securities violations was not considered by the Court. Because the Court was not presented with this alternative argument in the briefing and argument, it cannot grant PwC’s requested relief now. PwC’s current motion is essentially a new motion for partial summary judgment, the filing deadline for which has long since passed. Therefore, the Court clarifies its prior order by stating that the Court’s order should not be read to bar presentation of evidence or argument that PwC committed knowing violations of the securities laws. This issue was simply not raised in a timely fashion and was not decided, implicitly or explicitly, by the Court in its prior order.

To the extent that PwC requests an order granting summary judgment under 15 U.S.C. § 78u-4(f)(2)(A), that motion is DENIED.

The Clerk is directed to send a copy of this order to all counsel of record.