Mehedi v. View, Inc. f/k/a CF Finance Acquisition Corp. II

Opinion

1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 ASIF MEHEDI, et al., Case No. 21-cv-06374-BLF

8 Plaintiffs, ORDER DENYING MOTION FOR 9 v. LEAVE TO FILE MOTION FOR RECONSIDERATION OF ORDER 10 VIEW, INC., et al., APPOINTING LEAD PLAINTIFF AND APPROVING SELECTION OF 11 Defendants. COUNSEL

12 [Re: ECF No. 74]

13 14 On February 8, 2022, the Court issued an order appointing Stadium Capital LLC (“Stadium”) 15 as Lead Plaintiff and Kaplan Fox & Kilsheimer LLP (“Kaplan Fox”) as Lead Counsel in this 16 securities class against brought by Plaintiff Asif Mehedi against View, Inc. (“View”). See Order, 17 ECF No. 67. In its Order, the Court denied the motions to appoint lead plaintiff and lead counsel 18 filed by parties other than Stadium, including the motion filed by Sweta Sonthalia. See id. On 19 February 22, 2022, Ms. Sonthalia filed a Motion for Leave to file a Motion for Reconsideration of 20 the Court’s order appointing Stadium as Lead Plaintiff and Kaplan Fox as Lead Counsel. See 21 Motion, ECF No. 74. Ms. Sonthalia argues that under Civil Local Rule 7-9(b)(3), the Court 22 manifestly failed to consider material facts or dispositive legal arguments which were presented to 23 the Court by (1) “erroneously reject[ing]” the movants’ purchase price in calculating the parties’ 24 losses and (2) the Court made an improper finding of fact at the lead plaintiff stage by declining to 25 consider Ms. Sonthalia’s losses before the alleged August 16, 2021 corrective disclosure 26 (“Corrective Disclosure”). See id. 27 Under Civil Local Rule 7-9(a), “[n]o party may notice a motion for reconsideration without 1 to file a motion for reconsideration must show reasonable diligence in bringing the motion and one 2 of the following: 3 (1) That at the time of the motion for leave, a material difference in 4 fact or law exists from that which was presented to the Court before entry of the interlocutory order for which reconsideration 5 is sought. The party also must show that in the exercise of reasonable diligence the party applying for reconsideration did 6 not know such fact or law at the time of the interlocutory order; or 7 (2) The emergence of new material facts or a change of law occurring 8 after the time of such order; or

9 (3) A manifest failure by the Court to consider material facts or dispositive legal arguments which were presented to the Court 10 before such interlocutory order. 11 Civ. L.R. 7-9(b). Ms. Sonthalia brings her motion under Civil Local Rule 7-9(b)(3), which requires 12 her to show “[a] manifest failure by the Court to consider material facts or dispositive legal 13 arguments which were presented to the Court” before it issued its Order. See Motion, ECF No. 74 14 at 1; Civ. L.R. 7-9(b)(3). 15 The Court declines to grant Ms. Sonthalia leave to file a motion for reconsideration. Ms. 16 Sonthalia argues that the Court failed to consider the purchase price of her View stock in its Order. 17 See Motion, ECF No. 74 at 6–9. To the contrary, the Court considered using purchase price in 18 calculating the parties’ losses, but it found that using the price of View stock just before the 19 Corrective Disclosure provided for a better recoverable loss metric. See Order, ECF No. 67, at 20 9–15; see also Motion, ECF No. 74 at 6 (“The Court’s methodology erroneously rejected the 21 movants’ purchase price”) (emphasis added). Ms. Sonthalia points to cases in which courts factored 22 in purchase price, including Dura, to argue that the Court should have done the same. See id. at 6–9. 23 But the Court considered cases that used the stock purchase price in calculating losses, ultimately 24 deciding to use a different metric—pre-Corrective Disclosure price—in calculating losses. See 25 Order, ECF No. 67 at 9–15. Further, the Court explicitly considered Dura, although it chose a 26 different approach consistent with the Dura principle that pre-corrective disclosure losses should 27 not be factored into loss calculation. See id.; Dura Pharma., Inc. v. Broudo, 544 U.S. 336, 342 1 See Motion, ECF No. 74 at 7 (citing 15 U.S.C. § 78u-4(e)). Again, the Court considered this in its 2 |} Order. See Order, ECF No. 67 at 14 (“And the statutory cap is exactly that—a cap—it does not 3 indicate that the Court cannot take into account a Jower amount of damages than the limit provided 4 || by the cap.”) Accordingly, the Court finds that its decision not to rely on purchase price in 5 calculating the parties’ losses did not constitute a “manifest failure” to consider material facts. 6 || Civ. L.R. 7-9(b). 7 Further, Ms. Sonthalia argues that the Court made an improper finding of fact at the lead 8 || plaintiff stage by failing to consider the parties’ losses from View stock price fluctuations prior to 9 the Corrective Disclosure. See Motion, ECF No. 74 at 9-13. Again—the Court considered these 10 || losses, but it declined to factor these into its calculation of the parties’ losses because they took place 11 before the single Corrective Disclosure alleged in the Complaint. See Order, ECF No. 67 at 11; 12 || Complaint, ECF No. 1 {| 34-35; Sonthalia Reply, ECF No. 48 at 2 (stating that a single corrective 13 disclosure is alleged here). Accordingly, the Court did not make a finding of fact—it relied on the 14 allegations of a single Corrective Disclosure in the Complaint, which came after the losses Ms. 3 15 Sonthalia argues the Court should have considered. Accordingly, the Court again finds that Ms. a 16 || Sonthalia has failed to point to a “manifest failure” by the Court to consider material facts. 17 || civ. LR. 7-96). 18 Based on the above reasoning, the Court DENIES Ms. Sonthalia’s motion for leave to file a 19 || motion for reconsideration of the Court’s order appointing Stadium as Lead Plaintiff and Kaplan 20 || Fox as Lead Counsel. 21 IT IS SO ORDERED. 22 23 Dated: February 23, 2022 Ly) han tn) 24 Roh M. BETH LABSON FREEMAN 25 United States District Judge 26 27 28