DENISE COTE, District Judge
On February 18, 2003, the motion in this securities fraud class action lawsuit brought by defendant Deloitte Touche Tohmatsu ("Deloitte") for summary judgment was denied. See Cromer Finance Ltd. v. Berger et al., 245 F. Supp.2d 552 (S.D.N.Y. 2003) (February 18 Opinion"). The February 18 Opinion found that the plaintiffs had raised questions of fact whether William A. Jack ("Jack"), the partner from Deloitte Touche Bermuda ("DTB") who was in charge of the audits at issue in this lawsuit, was Deloitte's agent during the performance of the audits because of his participation in Deloitte's Global Financial Services Industries practice ("GFSI"). DTB is a member of Deloitte, a Swiss verein. Deloitte moves for reconsideration pursuant to Local Rule 6.3 or certification pursuant to 28 U.S.C. § 1292(b). The motions are denied.
Reconsideration
Local Rule 6.3 requires a party moving for reconsideration to "set forth concisely the matters or controlling decisions which counsel believes the court has overlooked." U.S. Dist. Ct. Rules S. E.D.N.Y., Civil Rule 6.3. Thus, to be successful on a motion for reconsideration, the movant must demonstrate that the court has overlooked controlling decisions or factual matters that were presented to it on the underlying motion. See Local Rule 6.3; Eisemann v. Greene, 204 F.3d 393, 395 n. 2 (2d Cir. 2000); Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995); Int'l Top Sports S.A. v. Pan American Sports Network Int'l, No. 01 Civ. 9668 (HB), 2002 WL 226657, at *1 (S.D.N.Y. Feb. 14, 2002). The decision to grant or deny the motion is within the sound discretion of the district court. Devlin v. Transp. Communications Int'l Union, 175 F.3d 121, 132 (2d Cir. 1999) (citing McCarthy v. Manson, 714 F.2d 234, 237 (2d Cir. 1983)).
Familiarity with the February 18 Opinion is assumed. Deloitte makes essentially two arguments.
1. Whether the agent must act "primarily" for the benefit of the principal.
The plaintiffs presented two theories of liability in connection with the summary judgment motion. The February 18 Opinion reached only one of the two theories, that Jack was Deloitte's agent through his participation in GFSI, that he acquired knowledge about the Fund's audits during the course of that agency, and that his knowledge may be imputed to Deloitte. Cromer, 245 F. Supp.2d at 561. The agency theory rested on the plaintiffs' contention that Jack had been given actual authority by Deloitte to act as its agent.
In its motion for reconsideration, Deloitte argues that the summary judgment ruling was based on an error of law. It contends that the plaintiffs must show that the acts of the agent that are at issue in the litigation — the performance of the audit of the fund in which the plaintiffs had invested their money — were "primarily" for the benefit of Deloitte. In the course of the summary judgment motion practice, Deloitte had argued that the plaintiffs must show that Jack was acting primarily for Deloitte's benefit when he acquired knowledge of the Fund's audits. The February 18 Opinion held that "for an agency relationship to exist, an agent must be acting `on behalf' of the principal, with consent and subject to control". Id. at 562.
Deloitte has not shown that the Court overlooked any authority that it presented in connection with the summary judgment motion. The February 18 Opinion discussed each of the cases on which Deloitte relied. Instead, Deloitte relies on cases applying law from jurisdictions other than New York and a section of the Restatement Second of Agency, which discusses the agent as a fiduciary, that it did not previously present to the Court.
Deloitte has not only presented new law, it has shifted the focus of its argument, contending now that it must be shown that Jack was performing the audit of the fund primarily for the benefit of Deloitte. That is not a correct statement of the issue. The issue the jury must decide is whether, in the event that it finds that there was an agency relationship between Deloitte and Jack, Jack's knowledge of the fund's audit was acquired within the scope of that agency. As the February 18 Opinion found,
the plaintiffs have pointed to sufficient facts in the record such that a reasonable jury . . . could find that it was within the scope of [Jack's] agency to acquire knowledge of the existence and quality of the Fund's audits. A jury would also be entitled to find that Deloitte expected Jack to report, based on his membership in GFSI, any deficiencies of which he was aware or which he uncovered in the performance of audits of off-shore investment funds by the member firms, particularly where those deficiencies could be remedied through improvements in the manuals and systems circulated by Deloitte, or where those deficiencies might, if detected and uncorrected, threaten Deloitte's reputation in the field and ability to compete for this business.
Id. at 562.
As to the existence of the agency relationship itself, even if the existence of an agency relationship requires that the principal and agent agree that the agent will act "primarily" on behalf of the principal, the plaintiffs have shown that the jury could conclude that Deloitte and Jack had such an understanding with respect to his service on GFSI, in other words, that such service was on behalf of Deloitte and primarily for its benefit. Deloitte does not really suggest otherwise. While the parties dispute whether Jack's knowledge of the fund's audit came within the scope of the agency relationship, that issue is, as already explained, a question of fact that must be resolved by a jury.
2. Whether plaintiffs must show reliance on the agency relationship.
Deloitte argues that the plaintiffs did not identify any evidence in opposition to summary judgment that they relied on the agency relationship between Jack and Deloitte when making their investment decisions. It contends that the Court erred in finding that an issue of fact concerning reliance existed because the fund audits bore Deloitte's own name and logo. Id. at 563. Deloitte's motion for reconsideration relies on a case presented in its summary judgment papers, and discussed in the February 18 Opinion, Gabriel Capital, L.P. v. NatWest Fin., Inc., 122 F. Supp.2d 407, 430 (S.D.N.Y. 2000). See Cromer, 245 F. Supp.2d at 563. Deloitte has not shown that any authority it presented was overlooked.
In any event, this prong of the motion for reconsideration is based on a fundamental error. The doctrine of agency being applied here is based on the alleged existence of actual authority, which depends on an understanding between the agent and principal, and not on any perception a third party may have of the relationship. Id. at 560. This agency doctrine is being asserted to impute Jack's knowledge or scienter to Deloitte. It is not being asserted to establish the other elements of a Section 10(b) claim under the Exchange Act.
The agency doctrine is not being used as a substitute for proof that Deloitte itself made the statements at issue in this case. Deloitte may be held responsible, under the law established in Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994), for the misrepresentations in the fund audits because its name and logo are on the audits, making it an identified speaker. Similarly, the plaintiffs' burden to prove reliance on "Deloitte's misrepresentations" must be satisfied by evidence that the plaintiffs relied on the audits when investing in the fund. The presumption of reliance, that will be applied to DTB at trial in connection with the federal securities law claim, applies as well to Deloitte.
Certification
Deloitte has also moved for certification of an interlocutory appeal of the February 18 Opinion to the Second Circuit, pursuant to 28 U.S.C. § 1292(b). Section 1292(b) provides in relevant part that
When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order.
28 U.S.C. § 1292(b); Karaha Bodas Co., L.L.C. v. Perusahaan Pertanbangan Minyak Dan Gas Bumi Negara,
313 F.3d 70, 81 (2d Cir. 2002).
This statute is to be strictly construed, as the power to grant an interlocutory appeal "must be strictly limited to the precise conditions stated in the law," Klinghoffer v. S.N.C. Achille Lauro, 921 F.2d 21, 25 (2d Cir. 1990) (quoting Gottesman v. General Motors Corp., 268 F.2d 194, 196 (2d Cir. 1959)), which is why "it continues to be true that only `exceptional circumstances'" warrant certification, id. (quoting Coopers Lybrand v. Livesay, 437 U.S. 463, 475 (1978)). See also O'Bert v. Vargo, 2003 WL 21257933 (2d Cir. June 2, 2003); Westwood Pharmaceuticals, Inc. v. National Fuel Gas Dist. Corp., 964 F.2d 85, 89 (2d Cir. 1992) (district courts should "exercise great care in making a § 1292(b) certification").
The fact intensive inquiries at issue here are not appropriate for certification. Moreover, Deloitte has not shown that there is a substantial basis for disagreement about any issue of law that will determine the resolution of the relevant fact issues at trial.
CONCLUSION
The motions for reconsideration and certification are denied.
SO ORDERED.
ORDER
It is hereby
ORDERED that the parties in the Cromer action are directed to appear at a conference to be held on July 31, 2003, at 10:00 a.m., at the United States Courthouse, 500 Pearl Street, New York, New York, in Courtroom 11B, to address trial management issues.
SO ORDERED.