SIDNEY I. SCHENKIER, United States Magistrate Judge.
In this action brought under the federal securities laws, plaintiff alleges violations of Section 17(A) of the Securities Act ( 15 U.S.C. § 77q(a)); Section 10(B) of the Exchange Act ( 15 U.S.C. § 78j(b)), and Rule 10 B-5 thereunder; and Section 16(a) of the Exchange Act ( 15 U.S.C. § 78p(a)), and Rules 16 A-2 and 16 A-3 thereunder. These claims arise out of defendant's alleged use of non-public information in trading 365,000 shares of Supercuts stock in March and April of 1995. On December 16, 1998, this Court issued a 15-page Memorandum Opinion and Order granting plaintiff's motion to bar defendant's expert, Ben W. Perks, from testifying at trial and to strike Mr. Perks' Rule 26 report. The case now comes before the Court on defendant's motion to reconsider that ruling.
Whether to grant a motion to reconsider is a matter committed to the sound discretion of the Court. Caisse Nationale de Credit v. CBI Industries, Inc., 90 F.3d 1264, 1270 (7th Cir. 1996). Motions to reconsider "should not be a `Pavlovian Response' to an adverse ruling," Jefferson v. Security Pacific Financial Services, Inc., 162 F.R.D. 123, 125 (N.D. Ill. 1995), but — properly used — instead are designed to "serve a limited function: to correct manifest errors of law or fact or to present newly discovered evidence." Publishers Resource, Inc. v. Walker-Davis Publications, Inc., 762 F.2d 557, 561 (7th Cir. 1985) (quoting Keene Corp. v. International Fidelity Ins. Co., 561 F. Supp. 656, 665-66 (N.D. Ill. 1982).
Thus, a motion to reconsider should only be presented when the law or facts change significantly after the issue is presented to the Court, or the Court has "patently misunderstood a party," has "made a decision outside the adversarial issues presented" to it, or has "made an error not of reasoning but of apprehension." Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990). A motion to reconsider is not "at the disposal of parties who want to `rehash' old arguments" that previously were made and rejected. Young v. Murphy, 161 F.R.D. 61, 62 (N.D. Ill. 1995), or to raise new arguments or evidence that could have been previously offered. Moro v. Shell Oil Co., 91 F.3d 872, 876 (7th Cir. 1996).
The Court has carefully considered defendant's arguments, which boil down to the contentions that the Court (a) misunderstood the nature of Mr. Perks' testimony, and the way in which it allegedly is tied to appropriate principles of accountancy, and (b) that the Court improperly applied Federal Rule of Evidence 702 and the decision in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) in finding that Mr. Perks' testimony (as outlined in his report) would not assist a jury. In aid of his motion to reconsider, defendant has tendered two supplemental affidavits prepared by Mr. Perks after the Court issued its ruling on December 16, 1998 (Defendant's Renewed Motion to Reconsider, Exs. C and D), which the Court has considered even though anything that Mr. Perks said in those affidavits could have been offered prior to the Court's ruling and thus, under well settled law, may be disregarded. Moro, 91 F.3d at 876. However, neither defendant's arguments nor the supplemental information supplied in Mr. Perks' affidavits persuades the Court that it misunderstood the nature of Mr. Perks' report and his proposed testimony, or that the Court misapplied the law. Accordingly, the Court finds no reason to change its earlier ruling and, as explained below, defendant's motion to reconsider is denied.
I.
In excluding Mr. Perks' testimony and report, the Court found that one opinion which Mr. Perks intended to offer was "that Mr. Lipson and others at Supercut did not believe the internal financial reports in March and April 1995 were reliable" (12/16/98 Mem. Op. and Order 9), and that this opinion testimony fails to meet the reliability and helpfulness criteria required for admissibility under Rule 702 ( Id. 9-10). Defendant does not challenge this ruling, but instead protests that in fact "Mr. Perks was not retained to opine on the credibility of Mr. Lipson's statement that the financial reports at issue were not reliable" (Def.'s Renewed Motion to Reconsider ("Def.'s Motion") ¶ 4).
Although defendant does not object to this portion of the Court's order, the Court wishes to reiterate that it is plain from Mr. Perks' original report ( see, e.g., Ex. A to 4/29/98 Def.'s Response to Motion to Bar, at 2, 4, 7, 8, 10), and his deposition ( see, e.g., Ex. B to 4//29/98 Def.'s Response to Motion to Bar, at 68-69, 103) that — contrary to defendant's current position — Mr. Perks indeed intended to offer such opinion testimony. The Court views defendant's present reversal of position as a concession, sub silentio, that any opinion testimony by Mr. Perks about whether, in fact, defendant or others at Supercuts viewed the internal financial reports as unreliable "falls far short of meeting the reliability and helpfulness criteria set forth in Rule 702" (12/16/98 Mem. Op. and Order 9) — a point that is important to keep in mind as the Court now turns to the other opinion that defendant sought to have Mr. Perks sponsor: that is, that the reports in fact were not reliable.
II.
The Court found that defendant had failed to establish that his opinion that the internal financial reports at Supercuts in March and April of 1995 were unreliable meets the criteria for admissibility under Rule 702. In so ruling, the Court found that this proposed opinion testimony was unreliable because it was "not sufficiently rooted in the principles and methodology of accountancy" (12/16/98 Mem. Op. and Order 11) and, in addition, would not be helpful to the jury ( Id. 13-14). Defendant asserts that the Court erred on each of these findings, which we address in turn.
A.
In the reconsideration briefs, the parties engage in an extended (and often unnecessarily heated) debate about whether Mr. Perks' opinions sufficiently derive from accepted principles and methodology of accountancy to satisfy Rule 702. Much of this debate is a rehash of the even more extended debate between the parties on plaintiff's original motion to strike and bar, which the Court carefully reviewed and considered before issuing its Memorandum Opinion and Order. Nothing that is offered in the reconsideration briefing persuades the Court that it erred in finding that Mr. Perks' opinion concerning the reliability of the internal financial reports is insufficiently grounded in principles and methodology of accountancy to be admissible.
Although the Court finds it unnecessary to review in detail all of the evidence and argument cited by the parties, the Court does wish to comment on the proposition — offered by defendant — that it was appropriate for Mr. Perks to "consider the statements of Mr. Lipson in forming his opinion" (Def.'s Motion ¶ 13). Defendant's argument misses the point, as the Court did not find fault with the mere fact that Mr. Perks interviewed Mr. Lipson (or others) at Supercuts about the reports. It would have been one thing had Mr. Perks simply interviewed Mr. Lipson and others at Supercuts for the purpose of learning relevant,
objective facts about the internal financial reports — such as, for example, who was involved in their preparation, what were the sources of information used, how was the information compiled, how was the information checked, or how was it verified. However, Mr. Perks' report and deposition testimony make it clear that he went far beyond searching for objective facts: instead he allowed his opinion to become "intertwined with, and in part based upon, statements by the Defendant and others that the reports were unreliable and that they considered them to be so" (12/16/98 Mem. Op. and Order 12 and n. 4).
In granting the plaintiff's motion, this Court stated that "[a]llowing an opinion about the objective reliability of certain records to be influenced by the subjective statements of an interested party about what he believed does not, in this Court's view, comport with the principles and methodology of the accountancy profession" (12/16/98 Mem. Op. and Order 12). Defendant has offered nothing on reconsideration to demonstrate otherwise.
B.
Defendant also takes issue with the Court's finding that "Mr. Perks' opinion that the internal financial reports are unreliable also would not be helpful to the jury" (12/16/98 Mem. Op. and Order 12).
First, defendant says that Mr. Perks' testimony is necessary to educate the lay jury about principles of accrual accounting, pooling, variable contribution and the significance of a material weakness in internal controls" (Def.'s Motion ¶ 17). If that had been defendant's sole purpose in calling Mr. Perks, the Court doubts there would have been any motion practice regarding his testimony. However, Mr. Perks' report made clear that it was never defendant's intention to offer Mr. Perks merely as an expert "background" witness to teach the jury certain accounting concepts. As defendant concedes (Def.'s Motion ¶ 17), the defendant (and no doubt other witnesses) will be qualified and able to explain to the jury any necessary accounting concepts from the defendant's perspective.
What defendant in fact sought to have Mr. Perks do is offer opinion testimony about the reliability in fact of the reports, and defendant's subjective belief as to their reliability in the first quarter of 1995. Defendant cannot justify calling Mr. Perks as an expert to offer those opinions, which the Court has found would not be reliable and helpful, by arguing that Mr. Perks might be able to offer other testimony or opinions that could be helpful to the jury.
Second, defendant takes issue with the Court's view that the actual reliability of the internal reports is not a fact in issue at trial (12/16/98 Mem. Op. and Order 13-14). Defendant urges that in order for defendant to persuade the jury that he in fact did not pay attention to the reports because they were unreliable, he must have the expert testimony of Mr. Perks showing that the reports were unreliable. In short, defendant wants to have Mr. Perks' opinion that the reports were unreliable, because defendant believes that will make it more likely that the jury will accept defendant's testimony that defendant thought the reports were unreliable and thus ignored them. However, whether or not the actual reliability of the internal reports in March and April of 1995 is a fact in issue at trial, defendant is not entitled to have the credibility of defendant's testimony bolstered by an expert opinion that is not sufficiently rooted in the principles and methodology of accountancy.
Third, defendant also quarrels with the Court's analysis that the internal financial reports, which contained accounting information, would be material irrespective of their accuracy or reliability (Def.'s Motion ¶ 19). In reaching that conclusion, the Court found that the authorities offered by defendant during the original briefing for the proposition that "unreliable" information cannot be material were inapposite; those cases did not deal with hard revenue and performance numbers but instead "soft" information such as subjective analysis, opinions, projections, estimates and forecasts. (12/16/98 Motion Op. and Order 14 n. 5). In seeking reconsideration, defendant argues that the information contained in the Supercuts internal financial reports also contain certain preliminary estimates. However, the internal company reports that plaintiff claims the defendant relied on or reports containing revenue and performance information, which fits the definition of "hard" information. The fact that some of that hard data may have been unreliable (according to defendant), or may have been later revised in some respects, does not convert that information in "soft" information. The Court finds no basis to alter its previous analysis on this point.
As was true with its original opinion (12/16/98 Mem. Op. and Order 14), this opinion on reconsideration expresses no view on the merits of defendant's defense that he did not use the internal financial reports in engaging in trades in 1995. What the Court found — and still finds — is that Mr. Perks' opinion testimony about the reliability of the reports is not sufficiently rooted in principles and methodology of accountancy. The Court does not believe that it will advance the search for truth to allow defendant to testify that he did not view the internal reports because he believed them unreliable, and then to allow defendant to bolster that testimony by having Mr. Perks (with the patina of an independent expert) opine that he also does not believe that the reports were reliable — an opinion based in part on Mr. Perks being told by the defendant that he did not think that the reports were reliable. While such circular opinion testimony might assist defendant, it will not assist the jury.
CONCLUSION
For the foregoing reasons, the Court denies defendant's motion to reconsider (doc. # 168-1) the December 16, 1998 Memorandum Opinion and Order granting plaintiff's motion to bar defendant's expert from testifying and to strike defendant's expert's report. The matter is set for status on Friday, April 30, 1999 at 9:30 a.m. for submission of the final pretrial order.