A Steptoe blog about civil litigation in the Southern District of New York
In litigation concerning certain promissory notes issued by the Venezuelan state-owned oil company, Judge Failla today issued an order granting a request by the trustee and collateral agent for the noteholders to keep under seal the identity of their expert on Venezuelan law.
Since last year, there has been dispute as to whether the rightful…
Yesterday, Judge Sweet found that there was sufficient evidence to survive summary judgment regarding allegations that Bear Stearns hid material information about its lack of liquidity and other problems during the financial crisis. He rejected the defendants’ argument that the supposedly hidden risks were “publicly known as a result of Bear Stearns’ disclosures”:
Defendants’ opposition and cited disclosures demonstrate textbook disputes of material fact sufficient to defeat a motion for summary judgment.
For example, both Plaintiff and Defendants point to a disclosure stating “inability to raise money in the long- term or short- term debt markets, or to engage in repurchase agreements or securities lending, could have a substantial negative effect on [Bear Stearns’ ] liquidity. ” Defendants frame this as sufficient disclosure to alert Plaintiff to risks, defeating the possibility of a misstatement or omission. Plaintiff emphasizes that Defendants disclosed only the possibility but not the certainty that Bear Stearns was already experiencing negative pressure as a result of its reliance on repo financing. . . .
“Nothing short of a complete failure of proof concerning an essential element of the nonmoving part y’s case will be sufficient to award summary judgment.” Celotex Corp . v . Catrett, 477 U.S. 317, 323 (1986). The disclosures Bear has identified are not so forthright and comprehensive that it can be said no dispute of material fact exists.
The Second Circuit today held, in a shareholder class action accusing Pfizer of concealing the cardiovascular risks of two drugs, that Judge Swain should not have excluded entirely the testimony of the plaintiffs’ damages expert — a decision which had effectively ended the case (see our prior posts here and here). The Second…
As we reported in May, Judge Swain precluded the trial testimony of the plaintiffs’ loss causation and damages expert in a shareholder class action accusing Pfizer of concealing the cardiovascular risks of two drugs, Celebrex and Bextra. At the time we wrote: “Without a damages expert, it is unclear how the plaintiffs can prove their case at trial, which is currently scheduled for September.” The answer, based on an Order yesterday, is that the plaintiffs will not be able to prove their case. Judge Swain dismissed the case altogether, writing: “To prevail on a securities fraud claim under Section 10(b) of the Securities Exchange Act of 1934, Plaintiffs must prove loss causation and damages. See, e.g., Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148, 157 (2007); 15 U.S.C. § 78u-4(b)(4). Without a loss causation expert, Plaintiffs cannot prove either.” She rejected the plaintiffs’ attempt to update the expert’s report to fix the issued she identified earlier:
Continue Reading Following Preclusion of Plaintiffs’ Expert, Judge Swain Dismisses Pfizer Shareholder Class Action
In an Order yesterday, Judge Swain precluded the trial testimony of the plaintiffs’ damages expert in a shareholder class action accusing Pfizer of concealing the cardiovascular risks of two drugs, Celebrex and Bextra. Without a damages expert, it is unclear how the plaintiffs can prove their case at trial, which is currently scheduled for September. The expert, Danied Fischel, had identified (a) seven dates during the Class Period on which public disclosures allegedly revealed the cardiovascular risks of the drugs, causing Pfizer’s stock price to drop, and (b) five dates during the Class Period in which positive information about the drugs allegedly caused Pfizer’s stock price to rise. His calculation of damages was based on the stock loss from the seven “corrective disclosures” offset by the rise on the five instances of stock price “inflation.” In a summary judgment ruling (covered in this post), Judge Swain rejected two of the seven corrective disclosures as grounds for damages. Mr. Fischel then issued a supplemental report that, rather than simply dropping those damages, assumed that there would be an offsetting increase on the inflation days. Judge Swain ruled that this methodology did not meet the standards of Rule 702:
Continue Reading Judge Swain Strikes Plaintiffs’ Damages Expert in Pfizer Shareholder Class Action
