The opinion of the court was delivered by: Rufe, J.
MEMORANDUM OPINION & ORDER
By Memorandum Opinion and Order dated July 16, 2012, the Court denied motions to dismiss the Second Amended Complaint for failure to state a claim, which were filed by the officers and directors of Advanta ("the Advanta Defendants") *fn1 and KPMG LLP ("KPMG"). Defendant KPMG has filed a Motion to Reconsider that Opinion, again seeking dismissal of the single claim against it in Plaintiffs' Second Amended Complaint, brought pursuant to the Securities Act of 1933, § 11 ("§ 11"). KPMG's Motion will be denied.
Motions to reconsider are governed by Local Rule of Civil Procedure 7.1(g) and are considered motions to alter or amend judgment under Federal Rule of Civil Procedure 59(e). "The purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence." *fn2 Thus, a motion for reconsideration should be granted only if: 1) there is an intervening change in the controlling law; 2) new evidence not previously available to the movant emerges; or 3) there is a need to correct a clear error of law or fact or to prevent manifest injustice. *fn3 The standard is a stringent one, and such motions must be granted sparingly. *fn4
The Court assumes familiarity with prior opinions and will not recount the factual and procedural history beyond what is necessary to rule on the Motion to Reconsider.
In its September 9, 2011 opinion, which addressed Motions to Dismiss the First Amended Complaint, the Court held that the Advanta Defendants' statements about Advanta's loan loss reserves were material misstatements of fact, and not statements of opinion, and held that Plaintiff had adequately stated a § 11 claim against the Advanta Defendants. *fn5 This holding was affirmed without further discussion in the July 16, 2012 opinion. *fn6
The Court's September 9, 2011 opinion also held that Plaintiffs
had not adequately pled a § 11 violation by KPMG, the accounting firm
that certified Advanta's registration statements as compliant with
generally accepted accounting principles ("GAAP"). *fn7
The Court wrote:
By their terms, the challenged statements are only "false" if Advanta's financial statements did not, as KPMG stated, conform to GAAP. Thus, Plaintiffs' vague allegation that KPMG's statements "were not correct for the reasons set forth in the various FDIC orders and reports" is insufficient. The FDIC reports do not conclude that Advanta's financial results were not prepared in conformity with GAAP or that its internal controls did not adhere to the criteria established in the Internal Control Integrated Framework. Plaintiffs have neither alleged what GAAP standards KPMG violated nor how the statements in the audit report were false or misleading at the time they were made. Indeed, Plaintiffs have not even alleged that the statements did not conform to GAAP. In sum, Plaintiffs' allegations are entirely conclusory and do not contain factual matter sufficient to support a plausible claim for relief." *fn8
Therefore, on September 9, 2011, the Court dismissed the claim against KPMG without prejudice.
Plaintiffs filed a Second Amended Complaint, in which they alleged additional facts in support of their allegation that KMPG violated § 11. In this complaint, Plaintiffs alleged that Advanta's financial statement, and in particular the loan loss reserve calculation, was not calculated in conformity with GAAP, and yet KPMG had certified that the financial statement did comply with GAAP.
In its July 16, 2012 opinion, the Court found that the Second Amended Complaint addressed the pleading deficiencies identified in the Court's September 9, 2011 opinion and adequately stated a § 11 claim against KPMG. The Second Amended Complaint added allegations that KPMG's endorsements of Advanta's financial statements contained materially misleading statements of fact, in that the financial statements KPMG certified as compliant with GAAP in fact violated an identified GAAP standard (Financial Accounting Standards Board Statement of Financial Accounting Concepts No. 5). Specifically, Plaintiffs alleged that Advanta violated GAAP when it failed to consider all past and present information when determining loan loss reserves and that the GAAP violation should have been evident to KPMG during its audit. However, Plaintiffs alleged, KPMG failed to verify that Advanta had used accurate source data, had made reasonable assumptions, and had accounted for known or knowable past and present information, and therefore KPMG failed to ensure that Advanta's registration statements complied with GAAP. Accordingly, the Court denied KPMG's Motion to Dismiss the Second Amended Complaint.
KPMG now argues that reconsideration of the Court's July 16, 2012 opinion is necessary "because there has been a clear error of law that needs to be corrected to prevent manifest injustice." *fn9
First, KPMG argues that the Court's July 16, 2012 opinion was inconsistent with its September 9, 2011 opinion. Specifically, KPMG argues that the pleading deficiencies the Court identified in the First Amended Complaint persisted in the Second Amended Complaint. However, as noted above, the July 16, 2012 opinion addressed new factual allegations set forth for the first time in the Second Amended Complaint. Because new factual allegations were before the Court, the July 16, 2012 opinion was not inconsistent with the Court's September 9, 2011 opinion, which ruled on the pleading adequacy of the ...