10-1373-cv
Cummins v. Suntrust Capital Mkts.

                                    UNITED STATES COURT OF APPEALS
                                        FOR THE SECOND CIRCUIT

                                           SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.

       At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of
New York, on the 25th day of March, two thousand eleven.

PRESENT: PIERRE N. LEVAL,
                 REENA RAGGI,
                 PETER W. HALL,
                                 Circuit Judges.
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ROBERT P. CUMMINS,
                                 Plaintiff - Appellant,

                               v.                                        No. 10-1373-cv

SUNTRUST CAPITAL MARKETS, INC.,
AMIT HAZAN, JONATHAN BLOCK,
                                 Defendants - Appellees.
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APPEARING FOR APPELLANT:                          JULIUS GLICKMAN (Ashton Bachynsky, Carter
                                                  & Bachynsky, LLP, Houston, Texas; Robert
                                                  O’Hare, O’Hare Parnagian, LLP, New York, New
                                                  York, on the brief), Law Office of Julius
                                                  Glickman, Houston, Texas.

APPEARING FOR APPELLEES:                          JEFFREY J. SWART (Judson Graves, Robert R.
                                                  Long, Tejas S. Patel, Alston & Bird LLP, Atlanta,
                                                  Georgia; Nelson Boxer, Alston & Bird LLP, New
                                                  York, New York, on the brief), Alston & Bird
                                                  LLP, Atlanta, Georgia.
       Appeal from the United States District Court for the Southern District of New York

(John G. Koeltl, Judge).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment entered on August 24, 2009, is AFFIRMED.

       Plaintiff Robert Cummins, the former Chief Executive Officer of Cyberonics, Inc.,

appeals from an award of summary judgment in favor of defendants SunTrust Capital

Markets, Inc., Amit Hazan, and Jonathan Block, on his defamation claim, and from a March

16, 2010 order denying his motion for reconsideration. We review an award of summary

judgment de novo, see El Sayed v. Hilton Hotels Corp., 627 F.3d 931, 933 (2d Cir. 2010),

and we will affirm only where “the movant shows that there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law,” Fed. R. Civ. P. 56(a).

We review the denial of a motion for reconsideration for abuse of discretion. See Lora v.

O’Heaney, 602 F.3d 106, 111 (2d Cir. 2010). We assume the parties’ familiarity with the

facts and record of prior proceedings, which we reference only as necessary to explain our

decision.

       We affirm for substantially the reasons stated in the district court’s thorough and

well-reasoned opinion. See Cummins v. Suntrust Capital Mkts., Inc., 649 F. Supp. 2d 224

(S.D.N.Y. 2009).     Like the district court, we conclude that the thirty-seven alleged

defamatory statements, considered individually and as a whole, are either (1) substantially

true, see Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 516-17 (1991); McIlvain v.

Jacobs, 794 S.W.2d 14, 15-16 (Tex. 1990); or (2) constitutionally protected opinion, see

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Bentley v. Bunton, 94 S.W.3d 561, 579-81 (Tex. 2002); Brown v. Swett & Crawford of Tex.,

Inc., 178 S.W.3d 373, 383 (Tex. App. 2005).1 We write only to address certain arguments

raised by Cummins on appeal.

          1.       Substantial Truth

          Cummins argues that a fact question exists as to the substantial truth of defendants’

analyst reports and statements to the media concerning the June 15, 2004 issuance of stock

options to Cummins and other Cyberonics executives because defendants (1) incorrectly

reported that management, rather than the board of directors, granted the options; and (2)

failed to disclose certain facts demonstrating that there was “nothing wrong” with the option

grants.        He contends that these undisclosed facts created a “substantially false and

defamatory impression.” Turner v. KTRK Television, Inc., 38 S.W.3d 103, 115 (Tex. 2000).

None of the facts identified by Cummins, however, is material to the “gist,” McIlvain v.

Jacobs, 794 S.W.2d. at 16, of defendants’ statements, i.e., that Cummins’ conduct in

connection with the options grant was self-interested and not aligned with the interests of

shareholders. Moreover, the gist of the statements is fully substantiated by the undisputed

facts that Cummins (1) knew the board was granting him options at the June 14 share price,

(2) knew the share price would rise the next day on favorable news regarding the Food and

Drug Administration panel approval, (3) was aware that other shareholders could not

capitalize on this news because trading was closed, and (4) accepted responsibility for

distributing similarly priced options to other Cyberonics executives. See id.; Klentzman v.

          1
              The parties do not dispute on appeal the applicability of Texas law.

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Brady, 312 S.W.3d 886, 898-99 (Tex. App. 2009). While Cummins argues that the gist of

defendants’ statements is broader, suggesting that he profited from illegal backdated options,

the statements at issue are not “reasonably capable” of such a defamatory meaning. Musser

v. Smith Protective Servs., Inc., 723 S.W.2d 653, 654-55 (Tex. 1987).

       Even if it would have been more accurate to state that the board granted the options,

the gist of defendants’ statements does not hinge on the technicality of who granted the

options or their actual propriety. See, e.g., Gustafson v. City of Austin, 110 S.W.3d 652, 657

(Tex. App. 2003) (disregarding detail of “secondary importance” in substantial truth

analysis); Barbouti v. Hearst Corp., 927 S.W.2d 37, 65 (Tex. App. 1996) (en banc) (holding

that statements, although “not 100 percent accurate in every detail,” were substantially true).

In the mind of an average reader, the statement that management granted the options is not

more harmful than the literal truth, i.e., that Cummins accepted options granted to him with

full knowledge of the circumstances surrounding their timing and exercise price. See

McIlvain v. Jacobs, 794 S.W.2d at 16; cf. Carr v. Mobile Video Tapes, Inc., 893 S.W.2d.

613, 619 (Tex. App. 1994) (holding statement that plaintiff avoided arrest more harmful than

literal truth that he had not avoided arrest). Because the central facts underlying the gist of

the statements are undisputed, the district court correctly concluded that they were

substantially true as a matter of law. See Hearst Newspaper P’ship v. Macias, 283 S.W.3d

8, 11 (Tex. App. 2009); accord McIlvain v. Jacobs, 794 S.W.2d at 16.




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       2.     Non-actionable Opinions

       Cummins submits that the district court erred in concluding that defendants’ various

characterizations of the option grants as, inter alia, self-interested, abusive, unethical,

unjustifiable, a manipulation of securities regulations, and akin to backdating were

non-actionable. Contrary to Cummins’ contention, defendants’ critiques of the option grants,

as well as their doubts regarding the credibility of Cyberonics’ management and predictions

about possible regulatory action, constitute subjective, non-verifiable opinions. See Bentley

v. Bunton, 94 S.W.3d at 579-81 (citing Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990));

see also Robertson v. S.W. Bell Yellow Pages, Inc., 190 S.W.3d 899, 903 (Tex. App. 2006);

Brown v. Swett & Crawford of Tex., Inc., 178 S.W.3d at 383; El Paso Times, Inc. v. Kerr,

706 S.W.2d 797, 798-99 (Tex. App. 1986). While Cummins quarrels with the negative

implications of these characterizations, such implications do not transform the

characterizations from expressions of opinion into statements of fact.

       Cummins’ reliance on Bentley v. Bunton, 94 S.W.3d at 585, is misplaced. Unlike in

Bentley, the statements at issue here do not imply the existence of undisclosed verifiable

facts as the basis for defendants’ opinions. Instead, defendants’ general characterizations of

the option grants are based solely on the circumstances in which they were awarded, i.e.,

their timing and exercise price, as set forth in defendants’ reports. Further, defendants

included several disclaimers that they could not say whether the options were actually

backdated or otherwise illegal. Although Cummins asserts that defendants’ opinions are

actionable because they were based on (1) the incorrect statement that management granted

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the options and (2) incomplete facts regarding the basis for defendants’ opinions, see id. at

583, the facts Cummins identifies have no bearing on the opinions expressed by defendants,

i.e., that the option grants were inappropriate regardless of whether they complied with the

letter of the law.2

       3.      Motion for Reconsideration

       Because we agree with the district court’s assessment of Cummins’ claims, we

identify no abuse of discretion in its denial of reconsideration. As the district court observed,

Cummins sought reconsideration only to relitigate issues that had already been decided. See

Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995) (“[A] motion to reconsider

should not be granted where the moving party seeks solely to relitigate an issue already

decided.”).

       4.      Conclusion

       We have considered Cummins’ remaining arguments and conclude that they are

without merit. For the foregoing reasons, the August 24, 2009 judgment and March 16, 2010

order are AFFIRMED.
                                     FOR THE COURT:
                                     CATHERINE O’HAGAN WOLFE, Clerk of Court




       2
        Because we conclude that the statements were either substantially true or protected
opinion, we do not address defendants’ other arguments.

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