Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_02-cv-04656/USCOURTS-cand-4_02-cv-04656-2/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:78m(a) Securities Exchange Act

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United States District Court

For the Northern District of California

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This Court referred the motion to dismiss to Judge Schwarzer

for decision; however, this Court has retained jurisdiction over

the case as well as a related case, In re JDS Uniphase Corp.

Securities Litigation, No. C-02-1486-CW (N.D. Cal. filed March 27,

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SHIRLEY ZELMAN, TRUSTEE, F/B/O

SHIRLEY ZELMAN LIVING TRUST, on

behalf of herself and all others

similarly situated,

Plaintiff,

v.

JDS UNIPHASE CORPORATION, JOZEF

STRAUS, KEVIN KALKHOVEN, ANTHONY R.

MULLER, DAN E. PETTIT, CHARLES J.

ABBE, ZITA M. COBB, JOSEPH IP,

FREDERICK LEONBERGER, MICHAEL C.

PHILLIPS, DONALD R. SCIFRES, and THE

FURUKAWA ELECTRIC CO., LTD.,

Defendants.

 /

No. C 02-4656 CW

ORDER DENYING

DEFENDANTS’

MOTION FOR

CERTIFICATION OF

JULY 13, 2005

ORDER

Defendants JDS Uniphase Corporation, Jozef Straus, Anthony R.

Muller and Charles J. Abbe move for certification pursuant to 28

U.S.C. § 1292(b) of Judge William W Schwarzer’s July 13, 2005 Order

denying their motion to dismiss Plaintiff Shirley Zelman's amended

complaint.1

 Defendant Kevin Kalkhoven joins the motion. Plaintiff

Case 4:02-cv-04656-CW Document 75 Filed 10/12/05 Page 1 of 5
United States District Court

For the Northern District of California

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2002). 

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opposes the motion for certification. The matter was taken under

submission on the papers. 

Having reviewed all of the papers submitted by the parties,

the Court DENIES the motion. 

The relevant facts are set forth in Judge Schwarzer's July 13,

2005 Order, Zelman v. JDS Uniphase Corp., 376 F. Supp. 2d 956, 958-

59 (N.D. Cal. 2005) (hereinafter referred to as "the July 13

Order"). Title 28 U.S.C. § 1292(b) grants a district judge the

power to certify a controlling question of law for interlocutory

appeal. Section 1292(b) identifies three factors that must be

present for certification. First, the issue to be certified must

involve a controlling issue of law. Second, there must be a

substantial ground for difference of opinion with respect to that

issue. Third, an interlocutory appeal must be likely materially to

speed the termination of the litigation. In re Cement Antitrust

Litig., 673 F.2d 1020, 1026 (9th Cir. 1981). The party seeking

certification bears the burden of showing that "exceptional

circumstances justify a departure from the basic policy of

postponing appellate review until after the entry of a final

judgment." Coopers & Lybrand v. Livesay, 437 U.S. 463, 475 (1978)

(quoting Fisons, Ltd., v. United States, 458 F.2d 1241, 1248 (7th

Cir. 1972)).

Both sides agree that the July 13 Order involved controlling

issues of law. Defendants argue that it resolved two issues of law

in a way that allows for substantial ground for difference of

Case 4:02-cv-04656-CW Document 75 Filed 10/12/05 Page 2 of 5
United States District Court

For the Northern District of California

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opinion. First, Defendants seek to appeal the issue of Plaintiff's

standing, a question of law on which Judge Schwarzer noted that "no

persuasive authority on point" existed. 376 F. Supp. 2d at 962. 

Defendants disagree with Judge Schwarzer's conclusions regarding

the relevance of Ontario Public Serv. Employees Union Pension Trust

Fund v. Nortel Networks Corp., 369 F.3d 27 (2nd Cir. 2004), cert

denied, 125 S. Ct. 919 (2005) and Blue Chip Stamps v. Manor Drug

Stores, 421 U.S. 723, 749 (1975). Second, Defendants seek

interlocutory appeal of the determination that Plaintiff is

entitled to use the "fraud on the market" doctrine to satisfy the

reliance element of her prima facie case, a theory Judge Schwarzer

described as "novel, but . . . a logical extension of existing

doctrine." 376 F. Supp. 2d at 970. Defendants argue that the

novelty of Plaintiff's theory demonstrates that there are

substantial grounds for difference of opinion. 

While Defendants show that these points of law decided in the

July 13 Order are both arguable and new, they do not demonstrate

that the decisions are contradicted by cases that are directly on

point. Furthermore, none of the cases cited by Defendants supports

their apparent contention that the extraordinary circumstance of

"substantial ground for difference of opinion" required for

certification of interlocutory appeal by § 1292(b) exists wherever

"reasonable jurists might not" reach the same conclusions as the

district court. Instead, the cases Defendants cite involve

additional circumstances not present here that justified

certification of interlocutory appeal. See, e.g., Huangyan Imp.

and Exp. Corp. v. Nature's Farm Prods., 370 F. Supp. 2d 993, 1005

Case 4:02-cv-04656-CW Document 75 Filed 10/12/05 Page 3 of 5
United States District Court

For the Northern District of California

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(N.D. Cal. 2005) (certifying three issues of pure law for

interlocutory appeal where no Ninth Circuit authority existed on

point, decision was adverse to both sides and district court

"candidly acknowledged" disagreement with contrary, out-of-circuit

authority); Kirkbride v. Cont'l Cas. Co., 707 F. Supp. 429, 433

(N.D. Cal. 1989) (certifying novel issue within Ninth Circuit where

decisions of other circuits courts had split); Bryan v. United

Parcel Serv., Inc., 307 F. Supp. 2d 1108, 1115 (N.D. Cal. 2004)

(certifying issue to Ninth Circuit in order to allow certification

to California Supreme Court of novel issue of California law);

Wells Fargo Bank v. Bourns, Inc., 860 F. Supp. 709, 717 (N.D. Cal.

1994) (certifying interlocutory appeal where issue had not been

squarely addressed by Ninth Circuit and was "inextricably

intertwined" with an issue already on appeal). 

Furthermore, Defendants have not shown that an interlocutory

appeal will likely materially speed the termination of the

litigation. Although reversal of the July 13 Order could terminate

this particular case, it would not affect the related securities

action before the Court, in which Defendants face the same

securities claims. If the order was not reversed, the appeals

process would have delayed the case considerably. Certification of

the July 13 Order also risks decoupling the Zelman schedule from In

re JDS Uniphase, potentially leading to separate trials in the two

cases and wasting the Court's and the parties' time and resources. 

For the foregoing reasons, the Court concludes that there are

no exceptional circumstances warranting the certification for

interlocutory appeal in this case, and exercises its discretion to

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United States District Court

For the Northern District of California

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decline to do so. Defendants’ motion for certification of

interlocutory appeal of the July 13 Order denying in part

Defendants' motions to dismiss is DENIED (Docket No. 62).

IT IS SO ORDERED.

Dated: 10/12/05

 

CLAUDIA WILKEN

United States District Judge

Case 4:02-cv-04656-CW Document 75 Filed 10/12/05 Page 5 of 5