City of Providence, Rhode Island v. Bats Global Markets, Inc.

Background

The plaintiffs asserted claims under Section 10(b) of the Securities Exchange Act of 1934 against stock exchanges. In 2015, the court dismissed the claims, ruling that the exchanges had absolute immunity and that the plaintiffs had failed to state a Section 10(b) claim. The Court of Appeals disagreed on both points, vacated that ruling, and sent the Section 10(b) claims back for further proceedings.

In 2019, the court denied the exchanges’ renewed motion to dismiss for lack of standing and failure to state a claim. After discovery, however, the court excluded the plaintiffs’ principal expert’s testimony and granted summary judgment to the exchanges. The court held that, without that testimony, the plaintiffs could not prove standing through admissible evidence. The plaintiffs initially appealed, but withdrew the appeals.

Motion to Vacate

The exchanges asked the court to vacate the portions of its 2015 decision addressing the merits of the plaintiffs’ claims and its 2019 decision denying the renewed motion to dismiss. They relied on decisions from outside the Second Circuit stating that prior decisions should be vacated when a federal court never had jurisdiction because the plaintiffs lacked standing. They also relied on a Supreme Court decision concerning vacatur of an unreviewed judgment when a case becomes moot during an appeal.

Court’s Analysis

The court explained that a plaintiff’s burden to establish constitutional standing increases as a case advances. At the pleading stage, general factual allegations may be enough because the court accepts them for purposes of evaluating a motion to dismiss. At summary judgment, the plaintiff must provide specific facts through affidavits or other evidence.

The court concluded that the exchanges’ cited out-of-circuit decisions did not address the situation presented here: the court had found standing at the motion-to-dismiss stage but later found that the plaintiffs had not proved standing under the higher summary-judgment standard. Those decisions were also not binding on this court. In addition, the exchanges sought to vacate interlocutory district-court decisions rather than a judgment. The court said the exchanges had not explained how leaving those decisions in place would prejudice them in the way an unreviewed judgment could prejudice a party.

Disposition

The court denied the exchanges’ request without prejudice to renewal if they could support it with authority more directly on point or otherwise persuade the court that vacatur was appropriate.