The opinion of the court was delivered by: Ludwig, J.
This is a Securities Action; jurisdiction is federal question. 28 U.S.C. § 1331. Defendants move for "Reconsideration of Denial of Their Rule 12(b) Motion to Dismiss Amended Complaint" (docket no.39). A summary of the fact basis for plaintiffs' claims as well as the basis for the denial of the motion to dismiss is set forth in the Memorandum of March 23, 2012 (docket no. 36). The reconsideration motion will be granted in part in that Count II of the amended complaint will be dismissed. Otherwise, it will be denied.*fn1
On reconsideration defendants' position is that the claims as to the
purchase of a convertible note were absolutely time-barred, the
purchase having occurred more than five years prior to the
commencement of this action. 28 U.S.C. § 1658(b)(2).*fn2
Plaintiffs' response is that they converted the loans into
common stock well within the statute of repose.
According to the amended complaint, after the initial 2004 investment, plaintiffs received interest payments under the terms of the notes through 2007, but none thereafter. Amended complaint, ¶¶ 27, 33, 39. In May, 2008, plaintiffs converted $300,000 of the $400,000 VEI#1 investment into common stock.*fn3 Amended complaint, ¶ 37. In July, 2009, plaintiffs were notified of an assignment for the benefit of creditors of VEI#1. Amended complaint, ¶ 83. It is unclear whether any "violation"happened before the 2008 conversion of the note to stock. The denial of defendants' motion must be upheld.
It is also defendants' position that claims under Pennsylvania's Unfair Trade Practices and Consumer Protection Law must be dismissed because:
(1) plaintiffs are not "consumers," and (2) securities are not "goods" under that act. Algrant v. Evergreen Valley Nurseries, Ltd., 126 F.3d 178, 186-88 (3d Cir. 1997).
As to the first point, the amended complaint specifically alleges "[t]he Brunis purchased financial services and/or investment products primarily for personal, family or household purposes." Amended complaint, ¶ 164. This adequately satisfies the requirement that plaintiffs are consumers under the act.*fn4
As to the second: "[i]nvestment securities are not goods under the UTP/CPL and therefore the UTP/CPL does not provide a cause of action for a party alleging fraud in the securities themselves." Algrant, 126 F.3d at 187. "The sale of investment securities, however, can qualify as 'services' under the UTP/CPL if fraud existed in the transaction in which the security was purchased." Cehula v. Janus Distributors, LLC, 2008 WL 2890874, at *4 n.20 (W.D. Pa., Jul 23, 2008), citing Baker v. Summit Bank, 64 F.Supp.2d 466, 468 (E.D. Pa. 1999)("securities are not 'goods' in the usual sense of the word and for their sale to be actionable as 'services,' the fraud must be in the transaction, not in the securities themselves.").
It is correct that the UTP/CPL creates a private cause of action if the fraud existed in the transaction itself, rather than in the securities: cases "in which the alleged violation of the UTP/CPL was committed by a brokerage house customarily selling the securities of third parties." Algrant, 126 F.3d at 187. Here, defendants are not alleged to have been brokers, but instead officers and co-owners of the investment businesses and the businesses themselves. See, e.g., amended complaint, ¶¶ 5-7. Moreover, these investments were made through Michael Bader, a broker who is not a party to this action. Defendants cannot be said to have provided "services."
Because the allegations of fraud and deceit are in regard to the value of plaintiffs' investments, and not in the transactions resulting in their purchase, the pleading does not state a claim under the UTP/CPL, and Count II of the amended complaint must be dismissed.
The rest of defendants' motion for reconsideration has already been rejected and will be denied. "It is improper on a motion for reconsideration to ask the court to rethink what it has already thought through - rightly or wrongly." Lischner v. Upper Darby Twp., ...