United States District Court, District of Columbia
BERMAN JACKSON United States District Judge.
to Federal Rule of Civil Procedure 59(e), plaintiffs have
moved for reconsideration of the Court's order dismissing
this case with prejudice, Pls.' Mot. to Amend or Alter
Final J. [Dkt. # 25] ("Pls.' Mot."), and
plaintiffs have also moved for leave to file a substitute
amended complaint under Federal Rule of Civil Procedure
15(a)(2). Pls.' Mot. & Mem. of Authorities for Leave
to File First Substitute Am. Compl. [Dkt. #31]
("Pls.' Mot. Am. Compl."). Because plaintiffs
have not identified any proper basis for the Court to alter
or set aside its judgment, and because any amendment to the
complaint would be futile, the Court will deny the motions.
are involved in an arbitration against Wells Fargo Advisors,
LLC concerning their deceased parents' brokerage
accounts, and they brought this action against defendant
FINRA Regulation, Inc. ("FINRA Regulation") while
the proceedings were ongoing. See Substitute Am.
Compl. [Dkt. # 10] ("Compl."). On July 29, 2016,
defendant moved to dismiss the complaint on a number of
grounds, including Federal Rules of Civil Procedure 12(b)(1),
12(b)(6), 12(b)(7), and 12(h)(3). Mot. to Dismiss Compl.
[Dkt. # 16] ("Def's Mot"). They argued that:
plaintiffs'claims are not ripe for review; defendant is
immune from suit under the doctrines of arbitral and
regulatory immunity; plaintiffs failed to name indispensable
parties; defendant is not a state actor; the Securities and
Exchange Act does not create a private right of action for
alleged violations of rules enacted under the Act; and
plaintiffs' request that the Court appoint new
arbitrators is moot because replacement arbitrators have
already been appointed. Mem. of Law in Supp. of Def's
Mot. [Dkt. # 17] ("Def's Mem.") at 1-2.
Plaintiffs opposed the motion, but they only briefed the
issues of arbitral immunity, whether FINRA Regulation is a
state actor, and whether their claims were ripe for review.
Pls.' Mem. in Opp. to Def's Mot. [Dkt. # 21]
("Pls.' Opp.") at 8-11, 18-19. Plaintiffs
failed to respond to any of defendant's other
contentions. On January 27, 2017, the Court granted
defendant's motion to dismiss. See Habliston v. FINRA
Regulation, Inc., No. 15-2225, 2017 WL 396580 (D.D.C.
Jan. 27, 2017).
granting the motion to dismiss, the Court found that the four
arguments plaintiffs failed to address had been conceded.
Id. at *4. But the dismissal of the case was
ultimately predicated upon lack of subject matter
jurisdiction and failure to state a claim under Federal Rules
of Civil Procedure 12(b)(1) and 12(b)(6). Id. at *7.
The Court concluded that plaintiffs' claims that their
constitutional rights had been violated in an allegedly
unfair arbitration process were not ripe for review and
should be dismissed for lack of subject matter jurisdiction
under Federal Rule of Civil Procedure 12(b)(1). Id.
at *5. And the Court held that all of plaintiffs' claims
should be dismissed pursuant to Federal Rule of Civil
Procedure 12(b)(6) because FINRA Regulation is immune from
suit under the doctrine of arbitral immunity. Id. at
February 16, 2017, plaintiffs filed a motion to amend or
alter the final judgment under Rule 59(e), arguing that it
was an abuse of discretion for the Court to deem issues not
opposed as conceded, and asking the Court to dismiss all
counts without prejudice. Pls.' Mot. at 1; Pls.' Mem.
of P. & A. to Alter or Amend Final J. [Dkt. # 25-1]
("Pls.' Mem.") at 1. Plaintiffs also stated
that they intended to file a motion for leave to file an
amended complaint that would be limited to the topics of
"adhesion, unconscionability and material breach of
contract to have the arbitration agreements declared
unenforceable under 9 U.S.C. § 2, and [to] add new facts
to appoint new arbitrators under 9 U.S.C. § 5."
Pls.' Mem. at 1. Defendant opposed the motion on March 2,
2017, arguing that plaintiffs had failed "to meet the
stringent standards established by Rule 59(e), " and
that they should have filed a Rule 15 motion accompanied by
their proposed amended complaint together with their Rule
59(e) motion if they intended to seek leave to amend. Opp. to
Pls.' Mot. [Dkt. # 26] ("Def's Opp") at 1-2
& n.2. Defendant also took the position that any
amendment would be futile. Id. at 10. Plaintiffs
replied in support of their motion on March 8, 2017.
Pls.' Reply in Supp. of Pls.' Mot. [Dkt. # 27]
March 10, 2017, the Court directed plaintiffs to file any
motion for leave to file an amended complaint by March 31,
2017, stating that it would be "in a better position to
consider such issues as the futility of any amendment once
the proposed amended complaint [was] before the Court."
Min. Order (Mar. 10, 2017). Plaintiffs filed their motion on
April 3, 2017, attaching a copy of the amended complaint.
See Pls.' Mot. Am. Compl.; Ex. 1, First
Substitute Am. Compl. [Dkt. # 31-1] ("Am. Compl.").
On April 10, 2017, FINRA Regulation opposed the motion,
arguing that the motion should be denied because: (1)
plaintiffs have failed to satisfy their burden under Rule
59(e); and (2) the motion for leave to file an amended
complaint was futile because plaintiffs' substitute
amended complaint would not survive a motion to dismiss. Opp.
to Pls.' Mot. Am. Compl. [Dkt. # 32] ("Def's
Opp. to Pls.' Mot. Am. Compl") at 1. Plaintiffs
replied on April 17, 2017. Pls.' Reply in Supp. of
Pls.' Mot. Am. Compl. [Dkt. # 33], STANDARD OF
ordinary circumstances, when a party seeks to amend its
pleading after a responsive pleading has been served, the
Court should "freely give leave [to amend] when justice
so requires." Fed.R.Civ.P. 15(a)(2); Firestone v.
Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996) (per
curiam). When evaluating whether to grant leave to amend,
however, the Court must consider these factors: (1) undue
delay; (2) prejudice to the opposing party; (3) futility of
the amendment; (4) bad faith; and (5) whether the plaintiff
has previously amended the complaint. Atchinson v.
District of Columbia, 73 F.3d 418 (D.C. Cir. 1996),
quoting Foman v. Davis, 371 U.S. 178, 182 (1962).
The Court may deny leave to amend based on futility if the
proposed claims would not survive a motion to dismiss.
Rumber v. District of Columbia, 598 F.Supp.2d 97,
102 (D.D.C. 2009), citing James Madison Ltd. v.
Ludwig, 82 F.3d 1085, 1099 (D.C. Cir. 1996).
a plaintiff may amend his or her complaint after judgment has
been entered "only by filing ... a 59(e) motion to alter
or amend a judgment combined with a Rule 15(a) motion
requesting leave of court to amend the complaint."
Firestone, 76 F.3d at 1208. "Rule 15(a)'s
liberal standard for granting leave to amend governs once the
court has vacated the judgment.... But to vacate the
judgment, [a plaintiff] must first satisfy Rule 59(e)'s
more stringent standard." Id.
Rule 59(e) motion is discretionary and need not be granted
unless the district court finds that there is an intervening
change of controlling law, the availability of new evidence,
or the need to correct a clear error to prevent manifest
injustice." Firestone, 76 F.3d at 1208
(internal quotation marks omitted). A motion to reconsider
under Rule 59(e) "is [neither]... an opportunity to
reargue facts and theories upon which a court has already
ruled nor a vehicle for presenting theories or arguments that
could have been advanced earlier." SEC v.
Bilzerian, 729 F.Supp.2d 9, 14 (D.D.C. 2010) (internal
quotation marks omitted), quoting New York v. United
States, 880 F.Supp. 37, 38 (D.D.C. 1995) and Kattan
by Thomas v. District of Columbia, 995 F.2d 274, 276
(D.C. Cir. 1993).
Plaintiffs' Motion for Reconsideration Under Rnle
Plaintiffs have not identified an "intervening change in
memorandum opinion, the Court determined that plaintiff had
conceded several arguments advanced in the motion to dismiss
by failing to respond to them. See Habliston, 2017
WL 396580, at *4. Plaintiffs now move the Court to
"vacate issues deemed conceded, and dismiss all [c]ounts
without prejudice so [p]laintiffs may file an
amended complaint." Pls.' Mot. at 1. They assert
that "[r]ecent changes in controlling law hold it an
abuse of discretion to deem issues not opposed as conceded
under LCvR 7(b)." Id., citing Cohen v. Bd.
of Trs. of Univ. ...