Order Denying Reconsideration — In re Carvana Securities

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U.S. District Court for the District of Arizona · No. 2:22-cv-02126-MTL · Doc. 117 · 2025-02-03 · Docket on CourtListener

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An order filed February 3, 2025 in United Association National Pension Fund, et al. v. Carvana Company, et al., No. 2:22-cv-02126-MTL, in the U.S. District Court for the District of Arizona, docketed as Doc. 117. It rules on the Carvana Defendants' Motion for Reconsideration (Doc. 107), joined by Ernest Garcia II and the Underwriter Defendants, of the court's order (Doc. 105) granting in part and denying in part motions to dismiss the Amended Consolidated Complaint. The court finds that scienter arguments raised only in footnotes of the motion to dismiss are waived, that its scienter analysis properly weighed all circumstances alleged, and that its PSLRA safe harbor ruling on Statement Nos. 1 and 6 and Statement C need not be revisited. The four-page order denies the motion under LRCiv 7.2(g).

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WO 
 
 
 
 
IN THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF ARIZONA 
 
 
United Association National Pension Fund, et 
al., 
 
Plaintiffs, 
 
v.  
 
Carvana Company, et al., 
 
Defendants. 
No. CV-22-02126-PHX-MTL 
 
ORDER  
 
 
 
 
Before the Court is a Motion for Reconsideration (Doc. 107) filed by the Carvana 
Defendants* and joined by Defendant Ernest Garcia II (“Garcia Senior”) and Defendants 
Citigroup Global Markets Inc. and J.P. Morgan Securities LLC (collectively, the 
“Underwriter Defendants”) (Docs. 108, 110). At the request of the Court, Plaintiff filed a 
response (Doc. 113). The Court now rules. 
I. 
LEGAL STANDARD 
 
The standard of review for motions for reconsideration is set forth in Local Rule of 
Civil Procedure 7.2(g). Motions for reconsideration will ordinarily be denied “absent a 
showing of manifest error or a showing of new facts or legal authority that could not have 
been brought to its attention earlier with reasonable diligence.” LRCiv 7.2(g)(1). “Motions 
for reconsideration are disfavored . . . and are not the place for parties to make new 
arguments not raised in their original briefs. Nor is reconsideration to be used to ask the 
 
* The “Carvana Defendants” include Carvana Co., Ernest Garcia III (“Garcia Junior”), 
Mark Jenkins, Stephen Palmer, Michael Maroone, Neha Parikh, Ira Platt, and Greg 
Sullivan. 
Case 2:22-cv-02126-MTL     Document 117     Filed 02/03/25     Page 1 of 4

 
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Court to rethink what it has already thought.” Motorola, Inc. v. J.B. Rodgers Mech. 
Contractors, Inc., 215 F.R.D. 581, 582 (D. Ariz. 2003) (citations omitted). 
II. 
DISCUSSION  
 
Defendants seek reconsideration of this Court’s order (Doc. 105) granting in part 
and denying in part Defendants’ motions to dismiss the Amended Consolidated Complaint 
(“ACC”), raising three issues. (Doc. 107.) 
 
First, Defendants argue the Court overlooked their “unresponded-to argument that 
the ACC lacks a single fact alleging that the speakers of Statements Nos. 4 and 8 acted 
with scienter.” (Id. at 3-4.) Defendants fleetingly made this argument in the footnotes of its 
motion. (Doc. 82 at 29 n.12, 30 n.14, 48 n.30.) The Court reminds Defendants that 
“[d]istrict judges are not archaeologists.” Nw. Nat. Ins. Co. v. Baltes, 15 F.3d 660, 662 (7th 
Cir. 1994). And this Court is not obligated, nor inclined to excavate arguments buried in 
briefs. See id.; Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 896 n.5 (1990) (“Our district 
judges must read footnotes with new care if they are to be reversed for failing to recognize 
motions buried in this fashion.”). The Carvana Defendants’ motion to dismiss contained 
thirty-three footnotes, reciting lengthy arguments and compound citations to the record and 
caselaw. (See Doc. 82.) To this Court, Defendants’ superfluous use of footnotes was a clear 
attempt to circumvent the page limitation—which the Court already extended to forty-five 
pages of argument. (Doc. 81.) Therefore, the Court concludes that these arguments are 
waived and insufficient to warrant reconsideration of the Court’s order. Defendants may 
properly brief these arguments at summary judgment. 
 
Next, Defendants claim that this Court “committed ‘manifest error’ in finding 
scienter based on inferences and allegations of knowledge alone.” (Doc. 107 at 4-7.) But 
Defendants misconstrue and misleadingly isolate portions of the Court’s order related to 
the core operations doctrine. Scienter, as pled under the core operations doctrine, was one 
factor in a host of many this Court considered. (Doc. 105 at 40-52 (considering stock sales, 
misleading statements, confidential witness accounts, the core operations doctrine, 
Sarbanes-Oxley certifications, and government investigations in scienter analysis).) 
Case 2:22-cv-02126-MTL     Document 117     Filed 02/03/25     Page 2 of 4

 
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Consistent with Ninth Circuit law, the Court conducted a holistic review of all the 
circumstances alleged in the ACC, and ultimately found such allegations—when accepted 
as true—sufficient to plead a strong inference of scienter. Contrary to Defendants’ 
argument that a “pump and dump” motive theory was required to allege scienter (Doc. 107 
at 4-7), the United States Supreme Court has recognized that “the absence of a motive 
allegation is not fatal.” Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 325 (2007). 
And in the Ninth Circuit, “[s]cienter can be established by intent, knowledge, or certain 
levels of recklessness.” In re VeriFone Holdings, Inc. Sec. Litig., 704 F.3d 694, 702 (9th 
Cir. 2012). Therefore, Defendants have not demonstrated how this Court’s reasoning was 
contrary to binding precedent. 
 
Lastly, Defendants ask this Court to revisit its conclusion that Statement Nos. 1 
and 6 and Statement C were not protected by the Private Securities Litigation Reform Act 
(“PSLRA”) safe harbor. (Doc. 107 at 8-9.). By misreading a footnote of this Court’s prior 
order, Defendants ask this Court to “rethink what it has already thought”—which is 
improper in a motion for reconsideration. Motorola, Inc., 215 F.R.D. at 582; see also 
Mogan v. Airbnb, Inc., No. 23-55489, 2024 WL 3738480, at *4 (9th Cir. Aug. 9, 2024) 
(explaining that a motion for reconsideration is improper if merely sought to relitigate the 
arguments earlier made). In assessing whether these statements were protected by the 
PSLRA safe harbor, the Court determined that the statements were not forward-looking, 
not accompanied by meaningfully cautionary language, and—based on the allegations in 
the ACC—made with actual knowledge of falsity. (Doc. 105 at 16.) The Court already 
considered and rejected the very arguments Defendants regurgitate here. Therefore, 
Defendants fail to show reconsideration is warranted on this issue as well. 
 . . . .  
 . . . .  
 . . . .  
 . . . .  
 . . . .  
Case 2:22-cv-02126-MTL     Document 117     Filed 02/03/25     Page 3 of 4

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III.
CONCLUSION
Accordingly,
IT IS ORDERED that Defendants’ Motion for Reconsideration (Doc. 107) is
denied. 
Dated this 3rd day of February, 2025. 
Case 2:22-cv-02126-MTL     Document 117     Filed 02/03/25     Page 4 of 4

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