Sustrick v. CI Capital Partners LLC

Background

The Court considered Stephen Sustrick’s motion for leave to file a motion for reconsideration of the Court’s May 5, 2025 order on defendants’ motion to dismiss. The order also addressed continuing the briefing schedule and hearing on Mariani Enterprises LLC’s motion to dismiss Sustrick’s Second Amended Complaint.

Reconsideration request

Under Northern District of California Local Rule 7-9, reconsideration may be sought based on a material difference in fact or law that could not reasonably have been known earlier, newly emerged material facts or a change in law, or the Court’s manifest failure to consider material facts or dispositive legal arguments presented before the earlier order. The rule also bars a party from rearguing written or oral arguments previously presented. The Court described reconsideration as an extraordinary remedy to be used sparingly.

Sustrick argued that the Court should reconsider its dismissal of his retaliation claim under the Dodd-Frank Act because he reported information to the Securities and Exchange Commission after the Court’s order. The Court relied on the Supreme Court’s statement that a plaintiff must provide information to the Securities and Exchange Commission before being terminated to bring a Dodd-Frank retaliation claim. The Court therefore rejected Sustrick’s argument that a later report showed error in the earlier ruling.

Sustrick also argued that the Court misunderstood CI Capital Partners LLC’s relationship with and control over Mariani Enterprises LLC. The Court stated that Sustrick had to allege and ultimately prove facts showing both unity of interest and ownership between the entities and that treating the conduct as Mariani’s alone would produce an inequitable result. The Court had previously found that alleging CI Capital was the manager of Mariani as a portfolio-company investment and an adviser to its investors was insufficient.

The Court further stated that Sustrick had not and could not allege that Mariani was publicly traded, as required for a Sarbanes-Oxley Act claim. It also stated that Sustrick had not alleged that he was terminated for providing information about the types of fraud or shareholder-related federal-law violations identified by the Court. The Court concluded that disagreement with its earlier order did not establish a basis for reconsideration.

Briefing schedule

The Court noted that Sustrick had not filed an opposition to Mariani’s motion to dismiss his Second Amended Complaint, which was noticed for a September 8, 2025 hearing. Because Sustrick’s pending reconsideration request may have caused him to misunderstand whether his response was still due, the Court extended the schedule. Sustrick’s opposition is due September 4, 2025; Mariani’s reply, if any, is due September 11, 2025; and the Court continued the hearing to September 29, 2025.

Ruling

Judge Sallie Kim DENIED Sustrick’s motion for leave to file a motion for reconsideration. The Court also extended the briefing schedule and CONTINUED the hearing on Mariani’s motion to dismiss to September 29, 2025.