IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

LAST ATLANTIS CAPITAL LLC, et al.,

Plaintiffs,

v.

AGS SPECIALIST PARTNERS, et al.,

Defendants.

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) No. 04 C 397

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MEMORANDUM OPINION AND ORDER

On March 26, 2010, I granted a motion for summary judgment

filed on behalf of defendant Knight Financial Products, LLC

(“Knight”). On May 8, 2010, certain plaintiffs moved the court to

reconsider this order1 and I denied that request. Now, plaintiffs

have again moved for reconsideration of my order granting summary

judgment. I have considered all the arguments raised by

plaintiffs, and none have merit. For the reasons explained below,

plaintiffs’ motion to reconsider is denied.

 “‘Motions for reconsideration serve a limited function; to

correct manifest errors of law or fact or to present newly

discovered evidence.’” Rothwell Cotton Co. v. Rosenthal & Co., 827

F.2d 246, 251 (7th Cir. 1987) (quoting Keene Corp. v. Int’l

1 The May 8, 2010 motion was styled as “Certain Plaintiffs’

Motion for Leave of Court to Supplement the Record on Defendant

Knight’s Summary Judgment Motion and For Revision of the Court’s

March 26, 2010 Order.”
Fidelity Ins. Co., 561 F. Supp. 656 (N.D. Ill. 1982)). 

“Reconsideration is not an appropriate forum for rehashing

previously rejected arguments.” Sikora v. AFD Indus., Inc., 18 F.

Supp. 2d 841, 844 (N.D. Ill. 1998). Nor can parties use such

motions to raise arguments or present evidence that could have been

raised in the original briefing. Rothwell, 827 F.2d at 251.

Plaintiffs first argue that the court erred in granting

summary judgment to Knight on all federal claims. According to

plaintiffs, “Knight never argued that it was entitled to summary

judgment on plaintiffs’ claims that it committed a manipulative act

in violation of Rule 10b-5(a) and (c) and never contested

plaintiffs’ evidence that it sent them misleading confirmations in

violation of Rule 10b-5(b).” Pls’ Mem. at 13. 

The court concludes that plaintiffs’ argument is waived. In

its motion for summary judgment, Knight clearly moved for summary

judgment on all federal counts. See Knight Mot. at 1

(“Knight . . . hereby moves the Court, pursuant to Fed. R. Civ. P.

56, for entry of summary judgment in its favor on plaintiffs’

federal securities law claims against Knight[.]”; “Knight is

entitled to judgment as a matter of law on Claim I of the

complaint, which is a claim under federal securities laws.”)). 

Further, Knight argued that all state law claims should be

dismissed because if its motion was successful, there would be no

remaining federal claims left in the case. In responding to

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Knight’s motion, plaintiffs never argued that Knight moved only for

partial summary judgment on subsections (a), (b), and (c) of Rule

10b-5. They never notified either the court or Knight that there

were other bases supporting the claims under Rule 10b-5(a), (b) and

(c), and they never indicated that the state law claims would

remain viable even if Knight’s motion was successful. The

complaint in this case is 236 pages long, and it is not the job of

the court to make plaintiffs’ arguments for them. The appropriate

time and place to argue that Knight’s motion, if successful, only

addressed part of plaintiffs’ claims based on (a) and (c), and part

of the claims based on (b), was in plaintiffs’ response to Knight’s

summary judgment motion. I conclude that it is too late for

plaintiffs to raise this argument.2

 See Bloch v. Frischholz, 587

F.3d 771, 784 (7th Cir. 2009) (“[A]ny arguments . . . raised for

the first time in [a] motion to reconsider are waived.”).

Next, plaintiffs argue that I erred in following the Second

Circuit’s holding in United States v. Finnerty, 533 F.3d 143 (2d

Cir. 2008) (“Finnerty III”), instead of the “controlling legal

authority” set forth in United States v. Ashman, 979 F.2d 469 (7th

2 I am not persuaded that the Seventh Circuit’s recent

opinion in Costello v. Grundon, -- F.3d --, 2010 WL 4055563 (7th

Cir. Oct. 18, 2010) dictates a result to the contrary. In

Costello, the Seventh Circuit made clear that a district court

may not decide a motion for summary judgment based on an argument

raised for the first time in the movant’s reply brief. Because I

am not deciding a motion for summary judgment based on an

argument raised for the first time in reply, Costello is

distinguishable from this case.

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Cir. 1992). Plaintiffs failed to raise Ashman in their response to

Knight’s summary judgment motion (or in their multiple post-reply

filings). A motion to reconsider should not serve as the occasion

to tender new legal authority for the first time. Publishers Res.,

Inc. v. Walker-Davis Publ’n, Inc., 762 F.2d 557, 561 (7th Cir.

1985). I reject the notion that Ashman (which involves brokers and

does not involve the kind of specialists at issue here) is

“controlling,” and given the extensive briefing in this case, I

conclude that any arguments relating to Ashman should have been

raised during summary judgment briefing. See Bloch, 587 F.3d at

784.

Plaintiffs also re-argue that Section 10b-5(b) is not limited

to cases involving fiduciaries or cases involving express

misrepresentations. Further, they argue that plaintiffs and Knight

had a fiduciary-type relationship. Plaintiffs simply rehash their

previous arguments already presented at summary judgment and have

not convinced me that my earlier analysis needs to be changed. 

In addition, plaintiffs argue the court erred in not finding

that a “fraud-on-the-market” theory of reliance is applicable in

this case. Plaintiffs argue that, even without evidence that they

actually relied on Knight’s misrepresentations, their reliance can

be presumed under a fraud-on-the-market theory. Having reviewed

the parties’ summary judgment briefing, I conclude that plaintiff’s

argument has been waived. See Bloch, 587 F.3d at 784. Had

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plaintiffs wished me to consider their argument that reliance must

be presumed under a fraud-on-the-market theory, they should have

raised this argument when they discussed Finnerty III’s

requirements for express misrepresentations (which included a

requirement of reliance) in their response brief. Motions to

reconsider are not a mechanism to allow parties to make arguments

they could have raised in the original briefing.

Finally, plaintiffs rehash their argument that quotes

themselves amount to an express misrepresentation. The court

considered this argument on summary judgment, and plaintiffs may

not re-argue it here.

For all the foregoing reasons, plaintiffs’ motion to

reconsider [800] is denied.

 ENTER ORDER:

 ____________________________

 Elaine E. Bucklo

 United States District Judge

Dated: November 4, 2010

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