Court Opinion

ID: 4020028
Source: CourtListenerOpinion
Date Created: 2016-07-29 15:00:36.245853+00
Date Added: 2024-06-11T07:44:58.793742
License: Public Domain

15-1885-cv
Steginsky v. Xcelera Inc. et al.

                                        UNITED STATES COURT OF APPEALS
                                           FOR THE SECOND CIRCUIT

                                              SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 29th day of July, two thousand sixteen.

PRESENT:              JOSÉ A. CABRANES,
                      CHRISTOPHER F. DRONEY,
                                   Circuit Judges,
                      JEFFREY ALKER MEYER,
                                   District Judge. *

GLORIA STEGINSKY, INDIVIDUALLY AND ON BEHALF
OF ALL OTHERS SIMILARLY SITUATED,

                                   Plaintiff-Appellant,

                                   v.                               15-1885-cv

XCELERA INC., VBI CORP., ALEXANDER M. VIK,
GUSTAV M. VIK, HANS EIRIK OLAV, AND OFC
LTD.,

                                   Defendants-Appellees.

     *
    The Honorable Jeffrey Alker Meyer, of the United States District Court for the District of
Connecticut, sitting by designation.

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FOR PLAINTIFF-APPELLANT:                                      Jeffrey S. Abraham and Philip T. Taylor,
                                                              Abraham Fruchter & Twersky LLP, New
                                                              York, NY.

FOR DEFENDANTS-APPELLEES
XCELERA INC., VBI CORP.,
ALEXANDER M. VIK, AND GUSTAV
M. VIK:                                                       Peter J. Macdonald and Andrea Dreyer,
                                                              Wilmer Cutler Pickering Hale and Dorr
                                                              LLP, New York, NY.

        Appeal from a judgment of the United States District Court for the District of Connecticut
(Stefan R. Underhill, Judge).

       UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the instant appeal be and hereby is DISMISSED IN
PART, insofar as plaintiff-appellant Gloria Steginsky’s individual claims and her motion for default
judgment against defendant-appellant OFC Ltd. are concerned, and that the judgment of the District
Court be and hereby is AFFIRMED, insofar as Steginsky’s motion for class certification is
concerned.

        Plaintiff-appellant Gloria Steginsky appeals the District Court’s judgment of May 13, 2015,
which followed her voluntary dismissal of claims brought against defendants-appellees Xcelera Inc.,
VBI Corp., Alexander M. Vik, Gustav M. Vik, Hans Eirik Olaf, and OFC Ltd. (jointly,
“defendants”) alleging breach of fiduciary duty and violations of sections 10(b), 20(a), and 20A(a) of
the Securities Exchange Act.1 We assume the parties’ familiarity with the underlying facts and the
case’s procedural history and, for the reasons that follow, dismiss the appeal in part and affirm the
District Court’s judgment.

        We begin with Steginsky’s individual claims, and conclude that they are not properly before
us. The District Court dismissed these claims at Steginsky’s request. See J.A. 1026-29. A plaintiff
who seeks and obtains dismissal of a claim is not ordinarily permitted to appeal from the dismissal,
“since it is presumed that [the] plaintiff[ ] obtained that which [she] sought.” Ali v. Fed. Ins. Co., 719
F.3d 83, 88 (2d Cir. 2013) (internal quotation marks omitted).

        We have, it is true, fashioned a narrow exception to this rule: “when the dismissal is with
prejudice, plaintiffs have been allowed, in limited circumstances, to appeal from a voluntary
dismissal when the plaintiffs’ solicitation of the formal dismissal was designed only to expedite

    1
     On appeal, Steginsky does not challenge the District Court’s treatment of her breach of
fiduciary duty claims.

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review of a prior order which had in effect dismissed plaintiffs’ complaint.” Id. (alteration and
internal quotation marks omitted). Steginsky takes the view that this is just such a case, contending
that the District Court’s ruling denying her motion for class certification “effectively dismissed” her
individual claims. See Steginsky v. Xcelera, Inc., No. 3:12 Civ. 188 (SRU), 2015 WL 1036985 (D. Conn.
Mar. 10, 2015).

          Not so. The District Court ruled only that certification was improper because Steginsky’s
claims—which were susceptible to “the unique defense of non-reliance”—were not typical of the
class’s claims. Id. at *5, *7. Indeed, Judge Underhill expressly stated that, in denying the motion for
certification, he was not “passing judgment on the merits of [the] case.” Id. at *7; see also SPA-25
(“[I]t is my current intention to allow the 20A claim to proceed . . . .”); Palmieri v. Defaria, 88 F.3d
136, 140 (2d Cir. 1996) (“[Plaintiff] thus concludes that . . . the ruling effectively dismissed his
case . . . . We are not persuaded by this argument, primarily because the district court expressly
declined to take the position that . . . [plaintiff’s] proof as a whole was insufficient as a matter of
law.”). Steginsky might be correct in asserting that the Court took a dim view of her case’s merits, see
Pl.’s Reply Br. 11-14, but discerning an adverse judgment somewhere in the offing is not the same as
having one’s claims “effectively dismissed.” See Ali, 719 F.3d at 88-89 (“In order to qualify as an
effective dismissal of the claim, the adverse ruling must have rejected the claim as a matter of law.”
(citations and internal quotation marks omitted)); Empire Volkswagen Inc. v. World-Wide Volkswagen
Corp., 814 F.2d 90, 95 (2d Cir. 1987) (“The danger inherent in electing voluntarily to dismiss a case
because of a prior adverse ruling is well illustrated in this case: Appellants rely exclusively on their
interpretation of [the district judge’s] partial summary judgment order as an effective dismissal of
their entire complaint.”). Steginsky’s individual claims are therefore not reviewable.

        Neither is the District Court’s order denying without prejudice Steginsky’s motion for
default judgment against OFC Ltd. As we have explained, voluntary dismissal of a claim brings up
for review only such prior orders as “ha[ve] in effect dismissed [the] plaintiff’s complaint.” Ali, 719
F.3d at 88 (internal quotation marks omitted). It does not permit appeal of any and all adverse
decisions rendered prior to entry of judgment. See Palmieri, 88 F.3d at 140 (declining to review an
evidentiary ruling following voluntary dismissal because the ruling was “subject to change at trial in
the district court’s discretion,” and, as a result, the plaintiff was not “faced with a nonappealable
order effectively dismissing his case”). The District Court’s order did not by any stretch of the
imagination effectively dispose of Steginsky’s claims against OFC Ltd.; indeed, Steginsky was invited
to make another motion for default judgment at a later time. SPA 40-44. Accordingly, the order is
unreviewable as well.

        As for the issue that is within our power to review—the District Court’s ruling on
Steginsky’s motion for class certification—we affirm, substantially for the reasons stated by the
District Court in its thorough and well-reasoned decision. See Steginsky, 2015 WL 1036985, at *4-7.
The Court did not err, much less “abuse its discretion,” in determining that Steginsky’s unique

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susceptibility to the defense of non-reliance rendered her an unsuitable representative plaintiff.2 See
Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 179-80 (2d Cir.
1990) (“[C]lass certification is inappropriate where a putative class representative is subject to unique
defenses which threaten to become the focus of the litigation.” (citations omitted)).

                                           CONCLUSION

        We have reviewed all of Steginsky’s arguments on appeal and find them to be without merit.
We thus DISMISS IN PART the instant appeal and AFFIRM the May 13, 2015 judgment of the
District Court.

                                                         FOR THE COURT:
                                                         Catherine O’Hagan Wolfe, Clerk

    2
      In view of this conclusion, and because Steginsky does not suggest that she could have
represented the non-tender-offer class members any more effectively than she could have
represented the tender-offer class members, we need not determine whether the District Court was
correct in holding that Steginsky lacked standing to sue on behalf of the non-tender-offer plaintiffs.
Our typical practice of deciding standing questions first may properly be suspended when, as in this
case, “they would not exist but for” certification, Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 612
(1997) (alteration and internal quotation marks omitted), and “resolution of class certification”
accordingly “obviates the need to decide” the standing issues, Mahon v. Ticor Title Ins. Co., 683 F.3d
59, 65 (2d Cir. 2012).

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