Court Opinion

ID: 6937548
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:44:01.782491+00
Date Added: 2024-06-11T16:07:33.144694
License: Public Domain

RIPPLE, Circuit Judge,
dissenting.
The requirement that fraud be pleaded with specificity has many salutary justifications. It safeguards defendants from baseless charges of moral turpitude and makes it more difficult to bring such allegations solely because of their nuisance or settlement value. It affords the defendant sufficient information to permit an intelligent evaluation of the complaint and a focused response. See 5 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1296. In my *285view, the district court’s decision demonstrates that these concerns are safeguarded adequately in the present case and that litigation beyond the pleading stage is appropriate. Our earlier case law sets forth, as adequately as they can be stated, the applicable standards in this area. Reasonable minds can — and will — differ on the adequacy of the factual specificity in an allegation of fraud. The issue is, by its nature, case specific and neither the case law of this circuit nor the case law of the other circuits can make any claim to being a seamless garment.
In addition to noting my respectful disagreement on the merits, I also write to suggest that, as a prudential matter, this court ought to exercise significantly more restraint in using the certification procedure to review fact-bound issues with respect to the adequacy of a complaint. I hope that the court’s action in this case does not signal a radical change in .its receptivity to such overtures. Before embarking on such a course, we ought to reflect on the significant institutional costs implicated in such an approach. Certification is not a vehicle for obtaining a “second opinion” on every fact-bound issue that confronts a district court. The Supreme Court has made it clear that “even if the district judge certifies the order under § 1292(b), the appellant still ‘has the burden of persuading the court of appeals 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, 98 S.Ct. 2454, 2461, 57 L.Ed.2d 351 (1978) (quoting Fisons, Ltd. v. United States, 458 F.2d 1241, 1248 (7th Cir.1972)). This principle has been confirmed just recently by the Court of Appeals for the Second Circuit in In re Prudential Lines, Inc., 59 F.3d 327, 332 (2d Cir.1995).
Absent the most unusual circumstances,11 do not believe that the certification procedure of 28 U.S.C. § 1292(b) ought to be employed as a device to allow interlocutory review of close, fact-bound judgment calls by district courts concerning the adequacy of a complaint. Here, the district court had before it a decision that confronts district courts every day — the sufficiency of a complaint’s factual allegations. The district court made a determination that the allegations were sufficient. Although my colleagues disagree with that judgment call, they point to no issue of law, no significant doctrinal development that compels departure from the normal course of adjudication.
The specificity requirement of Rule 9(b) does not come without its costs. Wright & Miller § 1296. The requirement creates significant delays by encouraging a great deal of motion practice. Id. If, in addition to this motion practice, we now invite defendants in fraud cases to litigate the factual specificity of the complaint not only in the district court but also in this court, much of the benefit of Rule 9(b) certainly will be diluted. Indeed, if we allow fraud complaints to visit this court as a matter of course after an unsuccessful motion to dismiss based on factual insufficiency, we shall be hard-pressed to turn away other fact-based denials of a motion to dismiss the complaint for failure to state a cause of action. The tactical weapon of delay will have found another battlefield. Appellate resources can be put to better use.

. In this respect, the court ought to weigh the burden on the parties, financial and otherwise, as well as the overall burden on judicial resources. Although the district court noted, in conclusory fashion, that, absent certification, the parties would engage in a significant amount of discoveiy, it made no finding that the extent of that discovery would be unusual.