Advanced Analytics, Inc. v. Citigroup Global Markets, Inc.

Background

Advanced Analytics, Inc. (AAI) alleged that the defendants misappropriated AAI’s numerical sequences used to help price mortgage-backed securities and incorporated them into software called the Yield Book or used them to create new sequences for that software.

The case had been pending for more than 16 years. Earlier orders limited AAI’s use of an untimely expert declaration by Dr. Jinqing Fan and awarded the defendants some attorney’s fees and costs because of AAI’s failure to comply with discovery deadlines and expert-disclosure rules. The court later issued a case-management order requiring the parties to meet and confer and, if necessary, request a conference before filing motions for relief.

AAI sought reconsideration of the case-management order and the amended attorney’s-fee award. AAI argued, among other things, that its former counsel, Todd S. Collins, had colluded with defense counsel and that this justified revisiting earlier rulings. AAI submitted a declaration by Dr. Xiaolu Wang in support. The defendants asked the court to exclude that declaration, sought a conference about its use, and requested fees and costs. AAI also requested fees and costs.

Wang Declaration and Conference Motion

The court held that an earlier order about producing redacted court records for proposed intervenors did not give AAI permission to use the Wang Declaration in its reconsideration motion. The order did not mention that declaration, and the court found that the declaration was submitted years after the discovery deadline.

The court received and reviewed the Wang Declaration but did not rely on its substance when deciding the reconsideration motion. It therefore granted in part and denied in part the defendants’ request to exclude the declaration. After ruling on the issues raised by the defendants’ request, the court denied the defendants’ Conference Motion.

Reconsideration Motion

A motion for reconsideration asks a court to revisit an earlier ruling. The court explained that this remedy is available only in exceptional circumstances, such as an overlooked controlling decision or fact, newly available evidence, a clear error, or a need to prevent serious unfairness. It is not a way to repeat arguments already rejected or raise arguments that could have been made earlier.

The court found that AAI’s motion was timely as to the amended attorney’s-fee award. Although AAI first sought reconsideration of the case-management order more than 14 days after that order, the court had continued considering the request and allowed AAI to address both orders in its later motion.

AAI’s collusion arguments did not satisfy the reconsideration standard. The court stated that AAI had repeated those arguments in earlier motions, declarations, and objections, and that earlier rulings by Judge Swain and Judge Pitman had rejected them. AAI identified no intervening change in controlling law, newly available evidence, overlooked matter, clear error, or serious unfairness that could change the earlier decisions. The court therefore denied AAI’s Motion for Reconsideration based on the alleged collusion scheme.

AAI also sought reconsideration of the portion of the case-management order requiring a meet-and-confer process and a court conference before filing requests for relief. The court held that this request was denied as moot because the relevant preauthorization motion had already been denied and the court had allowed AAI to file the reconsideration motion.

As to the amended attorney’s-fee award, AAI argued that the award should be reconsidered because its objection to an earlier order remained pending and because its former counsel, rather than AAI, should bear responsibility. The court found that AAI had not shown any basis for reconsideration and denied that portion of the motion.

Fees and Costs

Both sides requested monetary relief. AAI sought costs for responding to what it characterized as frivolous defense motions and for bringing its reconsideration motion. The defendants sought sanctions against AAI and its counsel based on AAI’s repeated collusion allegations and motion practice.

The court considered the standards governing sanctions for improper filings. It concluded that neither side’s request for monetary sanctions should be granted. Among other reasons, the court explained that the applicable sanctions rule is intended primarily to deter improper conduct rather than compensate a party for attorney’s fees. The parties’ requests for fees and costs were therefore denied.

Disposition

Judge Cave ordered that: (1) AAI’s Motion for Reconsideration was denied; (2) the defendants’ request to exclude the Wang Declaration was granted in part and denied in part; (3) the parties’ requests for fees and costs were denied; and (4) the defendants’ Conference Motion was denied. The existing attorney’s-fee award to the defendants remained in effect and had to be paid by AAI and its counsel within 60 days. The court also directed the clerk to close the reconsideration and conference-motion docket entries and unseal one specified filing.