19-3376-cv Cho et al. v. BlackBerry Ltd. et al.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

August Term, 2020

Argued: October 30, 2020 Decided: March 11, 2021

Docket No. 19-3376-cv

YONG M. CHO, BATUHAN ULUG,

Plaintiffs-Appellants,

MARVIN PEARLSTEIN, individually and on behalf of all others similarly situated, TODD COX, MARY DINZIK,

Plaintiffs, — v. —

BLACKBERRY LIMITED, FKA RESEARCH IN MOTION LIMITED, THORSTEN HEINS, BRIAN BIDULKA, STEVE ZIPPERSTEIN,

Defendants-Appellees.*

* The Clerk of the Court is respectfully directed to amend the caption as set forth above. B e f o r e:

LIVINGSTON, Chief Judge, CABRANES and LYNCH, Circuit Judges.

After failing to be selected as lead plaintiffs to represent a putative class in a consolidated securities fraud class action, Plaintiffs-Appellants Yong M. Cho and Batuhan Ulug were named in the consolidated complaint as individual plaintiffs. Subsequently, the district court dismissed the putative class’s complaint and denied leave to amend. The designated lead plaintiffs appealed on behalf of the class, filing a notice of appeal that did not state that Cho and Ulug were also appealing. On remand from this Court, plaintiffs were granted leave to amend the complaint, and Cho and Ulug were again named in the amended complaint as individual plaintiffs. Defendants-Appellees moved for judgment on the pleadings as to Cho and Ulug, arguing that the earlier dismissal had become final as to them because they did not properly appeal. The district court (Colleen McMahon, C.J.) granted the motion, concluding that under Federal Rule of Appellate Procedure 3, Cho and Ulug had failed to appeal the earlier judgment against them because they did not indicate their intent to appeal in the notice of appeal filed by the lead plaintiffs. Cho and Ulug appeal, arguing that: (1) the district court erred in dismissing their claims, because Rule 3 does not require individual named plaintiffs in a class action to indicate their intention to appeal, so long as the appeal is filed by persons qualified to represent the class; (2) in the alternative, even if the judgment dismissing their earlier claims had become final, res judicata does not bar their new claims against an additional defendant not previously named; and (3) the district court should have granted their motion for reconsideration. We conclude that: (1) Rule 3 requires that individual named plaintiffs in a class action indicate individually their intent to appeal, and the district court’s first dismissal became final as to Cho and Ulug when they failed to do so; (2) Cho and Ulug’s claims against the newly added defendant are barred by res judicata; and (3) the district court did not abuse its discretion in denying reconsideration. Accordingly, the judgment of the district court is AFFIRMED.

2 DAVID A.P. BROWER, Brower Piven, A Professional Corp., New York, NY (Kim E. Miller, J. Ryan Lopatka, Kahn Swick & Foti, New York, NY, on the brief), for Plaintiffs- Appellants.

JOSEPH R. PALMORE, Morrison & Foerster LLP, Washington, DC (Dan Marmalefsky, Morrison & Foerster LLP, Los Angeles, CA, James J. Beha II, Lena H. Hughes, Morrison & Foerster LLP, New York, NY on the brief), for Defendants-Appellees.

GERARD E. LYNCH, Circuit Judge:

Plaintiffs-Appellants Yong M. Cho and Batuhan Ulug, individual named

plaintiffs in a putative securities class action, appeal a judgment of the United

States District Court for the Southern District of New York (Colleen McMahon,

C.J.) granting judgment on the pleadings and dismissing their claims against

Defendants-Appellees BlackBerry Limited, Thorsten Heins, Brian Bidulka, and

Steve Zipperstein, because they failed to join the lead plaintiffs’ appeal of prior

orders of the district court dismissing their complaint and denying

reconsideration and leave to amend.

The appeal requires us to decide what individual named plaintiffs in a

putative class action must do to indicate their intent to appeal from an

3 unfavorable decision. Cho and Ulug argue that Federal Rule of Appellate

Procedure 3 allows named plaintiffs who are also members of a putative class to

rely on the notice of appeal of a “person qualified to bring the appeal as

representative of the class” under Rule 3(c)(3), and that they are not required to

indicate their intent to appeal individually. Consequently, they argue that they

should be permitted to rely on the successful appeal by the lead plaintiffs in this

case, and that the district court erred in granting judgment on the pleadings and

dismissing their claims.

We disagree, and conclude that Rule 3(c)(1)(A) requires individual named

plaintiffs – who, unlike absent class members, have chosen to litigate their claims

personally – to indicate their intent to appeal, and that individual plaintiffs may

not merely rely on a notice of appeal filed by the lead plaintiffs or other persons

qualified to represent the class. Accordingly, we hold that Cho and Ulug’s failure

to appeal the district court’s first dismissal of their claims rendered that decision

final as to them, and that the district court properly dismissed their attempt to

renew their claims after the lead plaintiffs successfully appealed.

We also reject Cho and Ulug’s remaining arguments. Their claims against

Defendant-Appellee Steve Zipperstein, which they argue should be allowed to

4 proceed because Zipperstein was joined as a defendant only after the initial

dismissal and the lead plaintiffs’ successful appeal, are barred by res judicata.

Finally, we conclude, contrary to their remaining contention, that the district

court did not abuse its discretion in denying Cho and Ulug’s motion for

reconsideration. Accordingly, we affirm the judgment of the district court.

BACKGROUND

The following facts are taken from the factual allegations in the second

amended complaint, which we accept as true, Bryan v. Credit Control, LLC,

(2d Cir. 2020), and from the dockets of the relevant courts.

In early 2013, BlackBerry released the Z10 smartphone. Intended as

BlackBerry’s answer to the iPhone, it was a commercial flop. That October,

several individuals filed separate putative securities class actions, alleging that

BlackBerry and its then-CEO and CFO (Thorsten Heins and Brian Bidulka,

respectively) made material misrepresentations and omissions related to the

release of the Z10, thereby artificially inflating BlackBerry’s stock price.

The cases were consolidated in the Southern District of New York before

the late Judge Thomas P. Griesa. Several plaintiffs moved to be appointed lead

plaintiff in the consolidated case, pursuant to the Private Securities Reform

5 Litigation Act (“PSLRA”).1 The aspiring lead plaintiffs included Todd Cox and

Mary Dinzik, a couple who jointly owned BlackBerry stock, represented by law

firm Kahn Swick & Foti, and the BlackBerry Limited Investment Group,

represented by law firm Brower Piven and composed of five investors, including

Cho and Ulug. The district court appointed Cox and Dinzik lead plaintiffs, with

Kahn Swick & Foti as lead counsel.

The lead plaintiffs then filed an amended complaint (“FAC”), which Cho

and Ulug joined as individual “additional” plaintiffs. The complaint was signed

by Kahn Swick & Foti as “Lead Counsel for Lead Plaintiffs and the Class,” and by

Brower Piven as “Counsel for Additional Plaintiffs Yong M. Cho and Batuhan

Ulug and the Class.” The amended complaint alleged material

misrepresentations and omissions related to the Z10 smartphone release based on

four documents: BlackBerry’s fiscal year 2013 financial results; an April 12, 2013

press release refuting a negative market report claiming that Z10 return rates

were exceptionally high; BlackBerry’s financial results for the first quarter of

1 The PSLRA requires the appointment of a lead plaintiff prior to certification of a class. See 15 U.S.C. § 78u-4(a)(3)(B)(i) (“Not later than 90 days after the date on which a notice is published . . . [the court] shall appoint as lead plaintiff the member or members of the purported plaintiff class that the court determines to be most capable of adequately representing the interests of class members.”).

6 fiscal year 2014; and an August 12, 2013 press release announcing a potential sale

of the company.

Defendants moved to dismiss the amended complaint. On March 13, 2015,

the district court granted the motion, concluding that plaintiffs “failed to

plausibly allege that defendants made misrepresentations or omissions of

material fact, and have failed to show that defendants acted with scienter.”

Pearlstein v. BlackBerry Ltd.,

(S.D.N.Y. 2015). Plaintiffs then

moved for reconsideration and for leave to amend their complaint. The district

court denied that motion, which was signed by Kahn Swick & Foti, as “Lead

Counsel for Lead Plaintiffs and the Class,” and by Brower Piven, as “Counsel for

Additional Plaintiffs Yong M. Cho and Batuhan Ulug and the Class.” D. Ct. Dkt.

No. 56 at 1-2.

The lead plaintiffs appealed on behalf of the class. The caption on their

notice of appeal reproduced the caption in the district court: “MARVIN

PEARLSTEIN, Individually And On Behalf of All Others Similarly Situated,

Plaintiff, vs. BLACKBERRY LIMITED et al., Defendants.” J.A. 119. The notice

began, “Lead Plaintiffs Todd Cox and Mary Dinzik hereby give notice, on behalf

of themselves and all others similarly situated . . . [,]”

and was signed by

7 Kahn Swick & Foti as “Lead Counsel for Lead Plaintiffs and the Class.” J.A. 120.

Brower Piven also signed the notice as “Additional Counsel for Lead Plaintiffs

and the Class” (and not “Counsel for Additional Plaintiffs Yong M. Cho and

Batuhan Ulug and the Class,” as it had in all previous submissions).

The

notice did not name or otherwise refer to Cho and Ulug.

On August 24, 2016, this Court affirmed the district court’s dismissal of the

complaint, but concluded that the district court had erred in denying leave to

amend without explanation, and remanded on that basis. Cox v. Blackberry Ltd.,

(2d Cir. 2016).2 Our summary order named Cox and Dinzik in the

body and caption,

, but made no reference to Cho and Ulug.

On remand, the district court granted leave to amend and the lead

plaintiffs filed a second amended complaint (“SAC”). The SAC again named Cho

and Ulug as individual plaintiffs, represented by Brower Piven. It renewed

plaintiffs’ earlier securities fraud claims and added new claims against Steve

2 In remanding the case, we also relied on Omnicare, Inc. v Laborers District Council Construction Industry Pension Fund,

(2015), which altered the standard for determining whether a statement of opinion is misleading for purposes of a securities fraud case. Cox,

.

8 Zipperstein, BlackBerry’s former chief legal officer, arising out of the April 12,

2013 press release cited in the original complaint. J.A. 138, 173-74.

Defendants, including Zipperstein, moved to dismiss the amended

complaint. Chief Judge Colleen McMahon (to whom the case had been assigned

following the death of Judge Griesa) denied the motion. Defendants then

answered the complaint, denying all material allegations of wrongdoing, and

discovery began.

On July 20, 2018, while discovery was ongoing, defendants successfully

moved for leave to amend their answer to assert additional affirmative defenses.

Defendants then filed an amended answer asserting as an affirmative defense

that plaintiffs’ claims were barred in whole or in part by the doctrines of res

judicata, collateral estoppel and/or law-of-the-case. Defendants moved for

judgment on the pleadings under Federal Rule of Civil Procedure 12(c), arguing

that the claims of Cho and Ulug should be dismissed because, unlike the rest of

the class, they failed to appeal the district court’s earlier dismissal of their

complaint, and that as a result the earlier judgment was now final as to them. The

district court referred the motion to Magistrate Judge Katharine H. Parker, who,

after hearing oral argument, issued a Report and Recommendation concluding

9 that Cho and Ulug’s claims should be dismissed. Pearlstein v. BlackBerry Ltd., No.

13-CV-07060,

(S.D.N.Y. Aug. 2, 2019).

On September 24, 2019, the district court accepted the recommendation

over plaintiffs’ objections3 and dismissed Cho and Ulug’s claims. Pearlstein v.

BlackBerry Ltd., No. 13-CV-07060,

(S.D.N.Y. Sept. 24, 2019). The

district court concluded that Rule 3 required Cho and Ulug to indicate their

individual intent to appeal. The court further rejected their contention that they

should have been permitted to rely on Rule 3(c)(3), which provides that in a class

action, “the notice of appeal is sufficient if it names one person qualified to bring

the appeal as representative of the class,” reasoning that Cho and Ulug had

“cease[d] to be ‘represented’ by the Lead Plaintiffs” when they joined the

complaint as individual named plaintiffs. Id. at *4.

In reaching its conclusion, the district court relied in part on our decision in

Cohen v. UBS Financial Services, Inc., which held that where a named class

representative filed a notice of appeal stating that he was appealing individually

and on behalf of the class, the notice was not sufficient to effect an appeal on

3 Although defendants’ motion to dismiss addressed only Cho and Ulug’s claims, it was opposed by the lead plaintiffs on behalf of the class, as well as Cho and Ulug.

10 behalf of the other named plaintiffs in the case.

, 177 n.3 (2d Cir.

2015).

The district court then addressed Cho and Ulug’s claims against

Zipperstein, who had not been named as a defendant in the initial complaint that

had been dismissed by the district court. The court, again adopting Magistrate

Judge Parker’s recommendation, dismissed those claims as well, concluding that

they were barred by res judicata and/or the law of the case doctrine because they

arose from the same transaction or occurrence as the original claims, and could

have been alleged in the prior complaint.

Cho and Ulug moved for reconsideration,4 arguing that the district court

erred in relying on Cohen and citing as “new evidence” material from the oral

argument in that case. The district court denied the motion. Pearlstein v.

BlackBerry Ltd., No. 13-CV-07060,

(S.D.N.Y. Dec. 19, 2019). This

appeal followed.

4 The body of the motion states that it is brought on behalf of Cho and Ulug alone, although it is signed by Kahn Swick & Foti as “Lead Counsel for Lead Plaintiffs and the Class,” as well as by Brower Piven as “Additional Counsel for Lead Plaintiffs and Counsel for Additional Plaintiffs Yong M. Cho and Batuhan Ulug.” D. Ct. Dkt. No. 409 at 1-2.

11 DISCUSSION

Federal Rule of Appellate Procedure 3 sets forth detailed instructions

explaining how to file an appeal. But despite its apparent clarity, this seemingly

straightforward rule has spawned considerable litigation over time, as parties

seek loopholes in its requirements. This appeal asks us to consider what Rule 3

requires of litigants who are members of a putative class, but have chosen to

proceed in the class litigation as individual named plaintiffs.

Cho and Ulug argue that the district court erred in dismissing their claims

because they were represented in the earlier appeal by the lead plaintiffs under

Rule 3(c)(3), and should not have been required to file a separate notice of appeal

or explicitly join the lead plaintiffs’ notice under Rule 3(c)(1)(A). In the

alternative, Cho and Ulug argue that even if their claims against the original

defendants are barred by their failure to appeal the earlier dismissal, their claims

against newly added defendant Zipperstein should be allowed to proceed, as

those claims were not included in the original complaint that was dismissed.

Finally, Cho and Ulug contend that the district court abused its discretion in

denying their motion for reconsideration.

12 We disagree on all three points. Cho and Ulug’s status as individual

named plaintiffs precluded them from being represented on appeal by the lead

plaintiffs; consequently, they were required either to clearly indicate their intent

to join the lead plaintiffs’ notice in their individual capacity or to file their own

notice. Because they failed to do either, the judgment dismissing their complaint

became final, and res judicata bars Cho and Ulug from bringing new claims

against Zipperstein that they could have pursued in their original action. Finally,

the district court did not abuse its discretion in denying Cho and Ulug’s motion

for reconsideration.

We review de novo the district court’s decision to grant a motion for

judgment on the pleadings under Federal Rule of Civil Procedure 12(c). Bryan,

. The standard of review for a Rule 12(c) motion is the same as for

a Rule 12(b)(6) motion: we must “accept all factual allegations in the complaint as

true and draw all reasonable inferences in plaintiff[s’] favor.”

(internal

quotation marks omitted). We also review de novo “the district court’s application

of the principles of res judicata.” EDP Med. Computer Sys., Inc. v. United States,

(2d Cir. 2007). Finally, denial of a motion for reconsideration is

reviewed for abuse of discretion. See RJE Corp. v. Northville Indus. Corp.,

(2d Cir. 2003).

13 I. Motion for Judgment on the Pleadings

A. Federal Rule of Appellate Procedure 3

Rule 3(c) lists the information that a notice of appeal must contain.

Although these notice requirements “should be liberally construed,” Marrero

Pichardo v. Ashcroft,

(2d Cir. 2004), they are “jurisdictional

requirements” that we “may not waive,” Torres v. Oakland Scavenger Co.,

(1988).

Rule 3(c)(1)(A) describes the party information that must be included in a

notice of appeal:

The notice of appeal must . . . specify the party or parties taking the appeal by naming each one in the caption or body of the notice, but an attorney representing more than one party may describe those parties with such terms as “all plaintiffs,” “the defendants,” “the plaintiffs A, B, et al.,” or “all defendants except X”.

The requirement that the parties appealing clearly identify themselves

serves an important purpose. As we have explained before, it “provide[s] notice

to the court and to the opposing parties of the identity of the appellant or

appellants, permitting the court and the opposition to know, for example, which

parties are bound by the district court’s judgment or which parties may be held

14 liable for costs or sanctions on the appeal.” Baylis v. Marriott Corp.,

(2d Cir. 1990); accord Torres,

(“The purpose of the specificity

requirement of Rule 3(c) is to provide notice both to the opposition and to the

court of the identity of the appellant or appellants.”). Without that notice

requirement, a “party could sit on the fence, await the outcome, and opt to

participate only if it was favorable.” Gonzalez v. Thaler,

(2012).

In this case, the December 2015 notice of appeal stated “Lead Plaintiffs

Todd Cox and Mary Dinzik hereby give notice, on behalf of themselves and all

others similarly situated,” that they appealed the dismissal of the complaint. J.A.

119. And although Brower Piven, counsel for Cho and Ulug, signed the appeal,

counsel signed as “Additional Counsel for Lead Plaintiffs and the Class”; the

firm did not state that it was appearing as counsel for Cho and Ulug, as it had on

previous submissions in the district court. Indeed, Cho and Ulug were not

mentioned anywhere in the notice of appeal. Under a plain reading of Rule

3(c)(1)(A), that fact alone would seem sufficient to defeat Cho and Ulug’s

argument that they successfully appealed.

However, Cho and Ulug turn to Rule 3(c)(3), which applies specifically to

class actions, to save their claims. Rule 3(c)(3) provides:

15 In a class action, whether or not the class has been certified, the notice of appeal is sufficient if it names one person qualified to bring the appeal as representative of the class.

Cho and Ulug argue that Rule 3(c)(3) creates a special rule for class actions that

displaces the more general rule in 3(c)(1)(A) that the notice must “specify the

party or parties taking the appeal by naming each one.” They argue that so long

as a qualified class representative appeals, that appeal covers the entire class,

including other named plaintiffs. Appellants’ Br. 17-18.

Nothing in the text of Rule 3(c)(3), however, displaces 3(c)(1)(A)’s generally

applicable requirement. Rule 3(c)(3) merely states that in a class action, the notice

of appeal can list “one person qualified to bring the appeal as representative of

the class” rather than naming all class members, which would clearly be difficult

or even impossible in some cases, particularly if the class had not yet been

certified. In other words, the provision covers unnamed class members that the

party bringing the appeal is qualified to represent; it does not include individual

named plaintiffs, who have appeared in the case as distinct parties separate from

the class members represented by lead plaintiffs, and who, as in any other case,

must appeal individually.

16 Cho and Ulug attempt to use the history of Rule 3(c)(3) to argue otherwise,

but in fact, the history of the provision belies their interpretation. The class action

provision in subsection (c)(3) was added to Rule 3 – along with other

amendments – after the Supreme Court concluded, in Torres v. Oakland Scavenger

Co.,

(1988), that a named plaintiff in a putative class action, who was

not named in the notice of appeal due to a clerical error, had lost his right to

proceed with the case. Rule 3 was amended following Torres to “reduce the

amount of satellite litigation spawned by” the Supreme Court’s decision. Fed. R.

App. P. 3 advisory committee’s note to 1993 amend. The amendment added Rule

3(c)(3), “to alleviate the inadvertent loss of the right to appeal through the use of

terms such as ‘et al.’ or through use of the name of a representative plaintiff in

class actions.” Billino v. Citibank, N.A.,

(2d Cir. 1997); see also Fed.

R. App. P. 3 advisory committee’s note to 1993 amend. (“In class actions, naming

each member of a class as an appellant may be extraordinarily burdensome or

even impossible . . . . Therefore, the amendment provides that in class actions,

whether or not the class has been certified, it is sufficient for the notice to name

one person qualified to bring the appeal as a representative of the class.”).

17 However, there is no indication that the amendment, which was intended

to clarify the application of Torres in other situations, was intended to reverse the

outcome in Torres as to individually named plaintiffs. Notably, “the amendment

offers no relief in situations where the party does not file the functional

equivalent of a notice of appeal, or where the party is never named or otherwise

designated, however inartfully.” Billino,

(internal quotation marks

omitted).

Here, Cho and Ulug qualify as members of a putative PSLRA class for

which lead plaintiffs were named by the district court. Not content to proceed as

mere class members, however, Cho and Ulug chose to join the complaint

individually as “additional” plaintiffs, with their own counsel. As a result,

although the lead plaintiffs are “qualified to bring the appeal as representative[s]

of the class” under Rule 3(c)(3), they are not qualified to appeal Cho and Ulug’s

individual claims, even if those claims are, at this stage, the same claims as those

being pursued by the class. Having failed to appeal themselves, Cho and Ulug

are not permitted to rely on the successful appeal of the lead plaintiffs in order to

proceed with their claims. See Federated Dep’t Stores, Inc. v. Moitie,

(1981) (plaintiffs may not “be the windfall beneficiaries of an appellate

18 reversal procured by other independent parties”).

Were we to conclude otherwise, the purpose of the notice requirement in

Rule 3(c)(1)(A) would be subverted. Cho and Ulug, as individual plaintiffs, have

options not available to unnamed class members. They could have chosen not to

appeal, or filed an individual appeal and made different arguments than the lead

plaintiffs. Or, if the lead plaintiffs chose not to appeal and thus to abandon the

case, they could have pursued an appeal on their own behalf.5 As a result,

allowing them to proceed as “an unnamed party” in the notice of appeal, as they

argue we should, would “leave[] the notice’s intended recipients – the appellee[s]

and court – unable to determine with certitude whether [Cho and Ulug] should

be bound by an adverse judgment or held liable for costs or sanctions.” Gonzalez,

. Cho and Ulug “could sit on the fence, await the outcome, and

5 Those options would not be available to unnamed class members of an uncertified class unless they intervened and sought permission from the court. See Bloom v. F.D.I.C.,

(2d Cir. 2013) (discussing requirements for appeal as a non-party in the context of an unnamed class member appealing decertification of the class); see also United Airlines, Inc. v. McDonald,

(1977) (unnamed plaintiff in uncertified class allowed to appeal dismissal only because she intervened promptly and it was clear that named plaintiffs did not intend to appeal).

19 opt to participate only if it was favorable,” just as they seek to do here. Id.6

Our conclusion, which follows clearly from the text of the amended rule

and our subsequent interpretations of that amendment, Billino,

, is

the same one we reached in Cohen v. UBS Financial Services Inc.,

(2d

Cir. 2015). In that case, plaintiff Eliot Cohen filed a putative class action against

UBS Financial Services, asserting claims under the Fair Labor Standards Act and

California law.

. The district court granted UBS’s motion to compel

arbitration based on an arbitration clause in Cohen’s contract, and Cohen

appealed.

On appeal, Cohen argued, inter alia, that California law prohibited

arbitration of his California law claims.

. Our court concluded that

6 Cho and Ulug argue that by requiring them to appeal individually, we are acting as though they opted out of the class before it was certified. Not so. It is indisputable that, although class members cannot opt out prior to class certification, “potential class members may leave the putative class at will” by settling their claims or by litigating their claims to final judgment individually. In re Painewebber Ltd. Partnerships Litig.,

(2d Cir. 1998). That is precisely what occurred here. Moreover, although it is true that Cho and Ulug, by proceeding individually, are subject to requirements under Rule 3 that are not imposed on unnamed class members, it is also clear that Cho and Ulug benefit from proceeding individually, which, as they explain, allows them “to later seek class representative status, and to protect their rights in the event class certification was denied or, if granted, they chose to opt out of the Class without risking the expiration of the statute of repose for claims under the Exchange Act.” Appellants’ Br. 29-30.

20 Cohen’s own California law claims were time-barred, and although another

named plaintiff had claims that were not time-barred, that named plaintiff had

not indicated his intent to join the notice of appeal. Accordingly, we “reject[ed]

Cohen's assertion that the other named plaintiffs below joined his appeal,” such

that the California law claims were properly before us.

at 177 n.3. Cohen’s

notice of appeal, which “state[d] that the appeal was brought by ‘Eliot Cohen,

plaintiff in the above-captioned action . . . , on behalf of himself and all others

similarly situated’ . . . sufficed to give notice that Cohen was appealing

individually and as a class representative, Fed. R. App. P. 3(c)(3), but did not

clearly express any other named plaintiff’s intent to join the appeal.”

(emphasis

in original).

Cho and Ulug argue that we faced a different situation in Cohen than we do

here, because Cohen was not qualified to bring California law claims on behalf of

the class, since his own California law claims were time-barred. Therefore, they

argue, he did not meet Rule 3(c)(3)’s requirement of a person “qualified to bring

the appeal as representative of the class.” Here, in contrast, the lead plaintiffs

were qualified to appeal all of the class’s claims.

21 While that is true, it played no role in our decision in Cohen. Our

conclusion there was that Cohen’s appeal, as a class representative, “did not

clearly express any other named plaintiff’s intent to join the appeal.”

(emphasis

in original). That conclusion, which we applied to all the named plaintiffs in

Cohen, applies with equal force to Cho and Ulug’s claims as individual plaintiffs

here: although the lead plaintiffs’ notice of appeal was sufficient to appeal the

claims of the class, it was not sufficient as to other named plaintiffs like Cho and

Ulug, who were pursuing their own claims individually.7

Citing Massie v. U.S. Dep’t of Housing & Urban Development,

(3d

Cir. 2010), Cho and Ulug argue that our conclusion is contrary to the law in the

7 Nor can Rule 3(c)(4), which provides that “an appeal may not be dismissed . . . for failure to name a party whose intent to appeal is otherwise clear from the notice,” save Cho and Ulug’s appeal, because their intent to appeal was not “otherwise clear.” Cho and Ulug argue that their intent to appeal was clear, because their counsel, Brower Piven, signed the appeal as “Additional Counsel for Lead Plaintiffs and the Class.” J.A. 119. But in fact, that signature cuts against Cho and Ulug’s argument. On all previous documents in the case filed after the appointment of lead plaintiffs, Brower Piven had signed as “Counsel for Additional Plaintiffs Yong M. Cho and Batuhan Ulug and the Class.” S.A. 32. The fact that Brower Piven changed the description of its representation for the first time in the notice of appeal to omit Cho and Ulug and designate itself as counsel solely for the Lead Plaintiffs and the class suggests, if anything, that Cho and Ulug did not intend to appeal. It certainly does not make their “intent to appeal . . . otherwise clear.” Fed. R. App. P. 3(c)(4).

22 Third Circuit. Of course, Third Circuit law does not bind us. But more

importantly, we disagree with Cho and Ulug’s characterization of Massie. In

Massie, the certified class, which included several other named plaintiffs in

addition to Massie, filed a notice of appeal that listed only one party, “Jean

Massie,” as the party appealing.

. But notably, in that case, the

notice was captioned “Jean Massie, et al. v. U.S. Department of Housing and

Urban Development, et al.,”

(emphasis added), and the plaintiffs

subsequently filed another (untimely) notice of appeal which listed all five

named plaintiffs as the parties appealing.

. Under those circumstances,

the court concluded that the other named plaintiffs had adequately appealed

based on the inclusion of “et al.” after the first named plaintiff in the original,

timely notice.

.

Unlike in Massie, in this case the notice of appeal was captioned,

“MARVIN PEARLSTEIN, Individually And On Behalf of All Others Similarly

Situated, Plaintiff, vs. BLACKBERRY LIMITED et al., Defendants.” J.A. 119. In

other words, it did not include an “et al.” that could conceivably encompass

other individual named plaintiffs, as Massie did, and which Rule 3(c)(1)(A)

specifies can be used to indicate which parties are appealing. See Fed. R. App. P.

23 3(c)(1)(A) (“[A]n attorney representing more than one party may describe those

parties with such terms as . . . ‘the plaintiffs A, B, et al.’ . . . .”). And the body of

the notice in this case, as previously discussed, stated only that it was on behalf

of “Lead Plaintiffs Todd Cox and Mary Dinzik . . . and all others similarly

situated . . . .” J.A. 119. The phrase “and all others similarly situated,” though

seemingly inclusive of all class members, is commonly used and understood to

refer to the unnamed class members, not other named plaintiffs. Consequently,

the notice did not give any indication, either in the caption or in the body, that

Cho and Ulug were appealing, as Rule 3 requires. Accordingly, we see no conflict

between the outcome in Massie and the conclusion we reach here.8

8 We note that the caption in the notice of appeal in Cohen also included the phrase “et al.”

n.3. However, despite the inclusion of “et al.” in that notice, we concluded that it was not sufficient to indicate that the other named plaintiffs were appealing because, taking into consideration the rest of the notice, it was not clear that they intended to appeal. In Cohen, the body of the notice did not mention the other named plaintiffs and stated only that “Eliot Cohen, plaintiff in the above-captioned action . . . , on behalf of himself and all others similarly situated, . . . hereby appeals.” See Notice of Appeal at 1, Cohen,

(No. 14-781). Accordingly, we concluded that the notice “did not clearly express any other named plaintiff’s intent to join the appeal.“ Cohen,

n.3 (emphasis in original). We relied on an earlier case, Gusler v. City of Long Beach,

(2d Cir. 2012), which explains that in our Circuit: “[T]he notice of appeal is sufficient even if the party taking the appeal is named nowhere but in the caption if – and only if – it is manifest from the notice as a whole that the party wishes to appeal. The notice of appeal then meets the

24 Finally, to the extent that Cho and Ulug argue that Rule 3(c)(1)(A) imposes

too great a burden on individual plaintiffs in a putative class action and is

unduly “onerous” in light of the Supreme Court’s decision in California Public

Employees’ Retirement System v. ANZ Securities, Inc.,

(2017),

we disagree. In ANZ, the Supreme Court concluded that equitable tolling during

the pendency of a class action does not apply to statutes of repose, and that the

plaintiff’s claims, filed after the plaintiff had opted out of a class action that

settled those same claims, were properly dismissed as untimely.

. In

that context, the Court noted that plaintiffs can easily preserve their claims

during the pendency of a class action, and that “[a] simple motion to intervene or

request to be included as a named plaintiff in the class-action complaint may well

suffice.”

. Cho and Ulug argue that we are adding to the “simple”

burden referenced by the Court by requiring plaintiffs who choose to proceed as

requisite of specifying the party or parties taking the appeal.” Id. at 649 (internal quotation marks omitted). In other words, although the inclusion of “et al.” in the caption may be sufficient in some circumstances to indicate that all named plaintiffs are joining the appeal, it will not be sufficient in circumstances, like Cohen, where the notice as a whole casts doubt on whether the other named plaintiffs intended to join the appeal. We express no view on whether Cohen is consistent with Massie; for present purposes it suffices to say that our conclusion here is inconsistent with neither.

25 named plaintiffs and litigate their claims to indicate their intent to appeal any

adverse decisions. But that is hardly the burden that Cho and Ulug assert it is;

named plaintiffs are merely required to indicate their intent to appeal in a notice

of appeal.

The burden in this case was indeed negligible, since Cho and Ulug were

represented by counsel, Brower Piven, and if they had intended to join the

appeal, their attorneys in the district court, who actually signed the notice of appeal,

needed only to state that they signed on behalf of their individual clients, or to

indicate in any way that those clients wished to appeal.9 Although we recognize,

as the Supreme Court did in Torres, that our “implacable” interpretation of “Rule

3(c) . . . leads to a harsh result in this case,” we are similarly “convinced that the

harshness of our construction is imposed by the legislature and not by the

judicial process.”

(1988) (internal quotation marks omitted).

9 We note that a purpose of the PSLRA was “to empower investors so that they – not their lawyers – exercise primary control over private securities litigation.” S. Rep. No. 104-98, at 4 (1995), reprinted in 1995 U.S.C.C.A.N. 679, 683. This may have been a situation in which that purpose was not achieved. Indeed, we note that Cho and Ulug have testified that they were not even aware of the appeal that Brower Piven argues to us that they joined. See Appellees’ Br. 9 n.1.

26 Accordingly, we conclude that the district court did not err in dismissing

Cho and Ulug’s claims against the original three defendants.10

B. Claims Against Zipperstein

Cho and Ulug contend that even if their claims against the original

defendants are barred by their failure to appeal, their claims against defendant

Zipperstein, which were added to the SAC after the lead plaintiffs’ successful

appeal, should be allowed to proceed. We agree with the district court that Cho

and Ulug’s claims against Zipperstein are barred by res judicata.11

10 Because we conclude that Cho and Ulug are barred from proceeding with their claims against the three original defendants because they failed to appeal, we do not reach Appellees’ other arguments as to why Cho and Ulug’s claims against those defendants cannot proceed. 11 The district court also relied on the doctrine of law of the case in deciding whether the claims against Zipperstein could proceed, but that doctrine does not apply here. Because the district court’s earlier dismissal of Cho and Ulug’s claims was a final judgment on the merits that was not appealed, any subsequent claims brought by Cho and Ulug would be part of a second proceeding. In those circumstances, res judicata, not law of the case, applies. See 18 Charles A. Wright & Arthur R. Miller, Fed. Prac. & Proc. Juris. § 4404 (3d ed. 2018) (“Res judicata applies as between separate actions, not within the confines of a single action on trial or appeal. Within a single action, consistency and efficiency are achieved by a separate doctrine known as law of the case.”); see also L-Tec Elecs. Corp. v. Cougar Elec. Org., Inc.,

(2d Cir. 1999) (applying doctrine of res judicata to dismiss new claims against previous defendants who had already been dismissed from the case in a final judgment on the merits).

27 The doctrine of res judicata provides that “a final judgment on the merits

of an action precludes the parties or their privies from relitigating issues that

were or could have been raised in that action.” EDP Med. Computer Sys., Inc.,

(internal quotation marks omitted). The doctrine bars later litigation if

“an earlier decision was (1) a final judgment on the merits, (2) by a court of

competent jurisdiction, (3) in a case involving the same parties or their privies,

and (4) involving the same cause of action.”

We have concluded above that

Cho and Ulug’s failure to appeal the district court’s original dismissal of their

claims renders that dismissal a final judgment on the merits by a court of

competent jurisdiction. Therefore, whether Cho and Ulug’s claims against

Zipperstein are barred turns on whether they involve the same cause of action as

the claims in the original complaint, and whether Zipperstein is in privity with

the three original defendants.

As to whether the claims against Zipperstein involve the same cause of

action as those asserted in the original complaint, the answer is clearly yes. “Even

claims based upon different legal theories are barred [by res judicata] provided

they arise from the same transaction or occurrence.” L-Tec Elecs. Corp. v. Cougar

Elec. Org., Inc.,

(2d Cir. 1999). Moreover, as noted above, res

28 judicata applies to issues that were not raised in the prior action, if they “could

have been raised in that action,” EDP Med. Computer Sys., Inc.,

,

and “applies even where new claims are based on newly discovered evidence,

unless the evidence was either fraudulently concealed or it could not have been

discovered with due diligence.” L-Tec Elecs. Corp.,

(internal

quotation marks omitted).

The SAC asserts claims against Zipperstein based on the same allegedly

misleading April 12, 2013 statement that was relied upon in the original

complaint. Compare J.A. 65-66 with J.A. 173. In other words, the claims against

Zipperstein clearly arise from the same transaction or occurrence as the original

complaint.

Cho and Ulug argue that because the claims against Zipperstein are based

on newly discovered evidence showing that the April 12, 2013 statement was a

misrepresentation, they are not barred by res judicata. But, as we have just noted,

even claims based on newly discovered evidence do not escape the bar of res

judicata “unless the evidence was either fraudulently concealed or it could not

have been discovered with due diligence.” L-Tec Elecs. Corp.,

(internal quotation marks omitted). Cho and Ulug argue that because the district

29 court granted them leave to amend their complaint upon remand from this

Court, the district court necessarily found that the claims against Zipperstein

“could not have been raised” in the FAC, and therefore cannot be barred by res

judicata now. Appellants’ Reply Br. 21. But that simply does not follow; in

granting leave to amend, the district court concluded only that there was not

“bad faith or undue prejudice,” the inquiry that governs amendment. See J.A.

129-130; Block v. First Blood Assocs.,

(2d Cir. 1993) (“Mere delay,

however, absent a showing of bad faith or undue prejudice, does not provide a

basis for a district court to deny the right to amend.”) (internal quotation marks

omitted).12 The inquiry governing leave to amend is not the same as that

governing whether res judicata bars subsequent claims, and the district court did

not address, nor did it necessarily implicitly conclude, that the claims against

Zipperstein could not have been brought in their original complaint. Indeed, that

12 Cho and Ulug’s reliance on the earlier decision of this Court remanding for the district court to reconsider its denial of leave to amend is similarly inappropriate. See Appellants’ Br. 44. In that decision, we merely noted that “Plaintiffs contend that, after the district court dismissed the Complaint, they discovered through review of the criminal complaint and accompanying affidavit in United States v. Dunham, No. 15–7051 (D. Mass. filed Feb. 24, 2015) . . . new evidence.” Cox,

(emphasis added). That statement is certainly not consonant with a finding by this Court that evidence relating to Zipperstein was newly discovered evidence that could not have been discovered earlier.

30 is clearly not the case, given that the “new evidence” they relied on to bring their

claims against Zipperstein was publicly available prior to the dismissal of their

FAC. See Appellees’ Br. 49. The “new evidence” thus was not “fraudulently

concealed” or impossible to “discover[] with due diligence,” L-Tec Elecs. Corp.,

, and accordingly, it cannot prevent the application of res judicata.

Finally, we turn to whether Zipperstein is in privity with the three original

defendants. Once again, the answer is yes. Privity “bars relitigation of the same

cause of action against a new defendant known by a plaintiff at the time of the

first suit where the new defendant has a sufficiently close relationship to the

original defendant to justify preclusion,” Cent. Hudson Gas & Elec. Corp. v.

Empresa Naviera Santa S.A.,

, 367–68 (2d Cir. 1995), such as where

the new defendant is the old defendant’s “proxy, agent, or designated

representative,” Sacerdote v. Cammack Larhette Advisors, LLC,

, 506 (2d

Cir. 2019). The doctrine of privity is a “functional inquiry,” not a “formalistic”

one, Chase Manhattan Bank, N.A. v. Celotex Corp.,

(2d Cir. 1995),

and must be applied “with flexibility,” Amalgamated Sugar Co. v. NL Indus., Inc.,

, 640 (2d Cir. 1987).

31 Cho and Ulug argue that Zipperstein was not in privity with the earlier

defendants because he is being sued in his individual capacity under a “primary

violator” theory of liability, which is different than the “control person” liability

asserted against the original defendants. But the privity inquiry is a “functional”

one, and “[r]es judicata may bar non-parties to earlier litigation . . . when the

interests involved in the prior litigation are virtually identical to those in later

litigation.” Chase Manhattan Bank, N.A., 56 F.3d at 345-46 (emphasis omitted).

Zipperstein, who was BlackBerry’s chief legal officer when he made the

statements giving rise to the claims against him, and who was speaking on behalf

of the company, had a “sufficiently close relationship to the original defendant[s]

to justify preclusion,” Cent. Hudson Gas & Elec. Corp., 56 F.3d at 368, as their

“agent,” Sacerdote, 939 F.3d at 506. See also John St. Leasehold, LLC v. Cap. Mgmt.

Res., L.P.,

, 75 (2d Cir. 2002) (FDIC employees acting within the scope

of their agency were in privity with employer FDIC for purposes of res judicata).

As such, he has “virtually identical” legal interests to theirs, which justify the

application of res judicata. Chase Manhattan Bank, N.A., 56 F.3d at 345. Proceeding

under a different legal theory cannot defeat the conclusion that Zipperstein was

in privity with the original defendants; as noted above, “claims based upon

32 different legal theories are barred provided they arise from the same transaction

or occurrence.” L-Tec Elecs. Corp.,

.

We conclude that the district court properly dismissed Cho and Ulug’s

claims against Zipperstein, as well as those brought against the original

defendants.

II. Motion for Reconsideration

Finally, Cho and Ulug argue that the district court abused its discretion in

denying their motion for reconsideration. “[A] party may move for

reconsideration and obtain relief only when the [party] identifies an intervening

change of controlling law, the availability of new evidence, or the need to correct

a clear error or prevent manifest injustice.” Kolel Beth Yechiel Mechil of Tartikov,

Inc. v. YLL Irrevocable Tr.,

(2d Cir. 2013) (internal quotation marks

omitted). “The standard for granting such a motion is strict, and reconsideration

will generally be denied unless the moving party can point to controlling

decisions or data that the court overlooked – matters, in other words, that might

reasonably be expected to alter the conclusion reached by the court.” Van Buskirk

v. United Grp. of Cos., Inc.,

(2d Cir. 2019) (internal quotation marks

omitted).

33 Cho and Ulug argue that the district court should have granted

reconsideration because they presented “new evidence,” with their motion, most

significantly, the audio recording of the oral argument in Cohen. That argument

fails to persuade for a number of reasons.

First, it is not clear that an audio recording of the argument in a case that

was thoroughly discussed in the district court’s original decision constitutes

“evidence” at all. Moreover, the recording here can hardly be considered “new

evidence,” given that the recording was readily available at the time of the earlier

briefing. Cf. Garraway v. Newcomb,

(2d Cir. 2005) (district

court did not abuse its discretion in denying a motion for reconsideration where

the movant “sought to introduce some new evidence. . . [which] was available to

him at the time of the original summary judgment motion”).13

Second, and more importantly, we agree with the district court that the

recording “provides no grounds for reconsideration.” S.A. 44. Nothing in the oral

13 Cho and Ulug’s “far-reaching investigation” into Cohen appears to have consisted mainly of requesting the audio of the oral argument in Cohen from the Clerk of our Court. See Appellants’ Reply Br. 23-24. There is no indication that the audio would not have been theirs for the asking earlier in the proceedings, for example, after Magistrate Judge Parker issued her report and recommendation making it clear that Cohen was relevant to the disposition of defendants’ motion.

34 argument alters our understanding of what occurred in Cohen, or suggests, as

Cho and Ulug argue, that we did not mean exactly what we said in that case: that

nothing in the notice of appeal there, as here, “clearly express[ed] any other

named plaintiff’s intent to join” Cohen’s appeal, and accordingly, the appeals of

other named plaintiffs could not proceed. Cohen,

n.3.

Third and finally, as the district court correctly pointed out, Cho and

Ulug’s interpretation of Cohen cannot alter the outcome in this case, because

neither we nor the district court depend solely on Cohen in interpreting Rule 3.

For the same reasons, we reject Cho and Ulug’s argument that reconsideration

was warranted to prevent a manifest injustice.

CONCLUSION

For the reasons stated above, the judgment of the district court is

AFFIRMED.

35