In an opinion today, Judge Swain ruled Section 13 of the Securities Act, which states that no action may be brought “more than three years after the security was bona fide offered to the public” was not extended by the so-called “FDIC Extender Provision” of the Financial Institutions Reform, Recovery, and Enforcement Act (or

In an opinion yesterday, Judge Swain dismissed a securities class action accusing GM of “channel stuffing” — forcing excess inventory onto dealers to create the appearance of improving revenue — because the inventory at dealerships was fully disclosed:

The fundamental flaw of Lead Plaintiff’s thesis is that is own Amended Complaint reflects public knowledge of

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:
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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:
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In a one-page Order Wednesday, Judge Swain stayed a securities class action accusing AIG of concealing its exposure to subprime securities pending a ruling from the Supreme Court in Halliburton Co. v. Erica P. John Fund, Inc., a case challenging the presumption of classwide reliance on the price of securities that are traded in efficient markets. The Halliburton case is scheduled for argument in March and a ruling is expected by July. The lead plaintiff argued that other courts have rejected stays pending the Halliburton ruling, but the defendants responded that, unlike in those other cases, fact discovery was already complete. The defendants also argued that Halliburton is a potential “game changer” for securities litigation:

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In an opinion yesterday, Judge Swain refused to enjoin Dish Network’s technology allowing viewers to record all prime time network shows (called “Prime Time Anytime” or “PTAT”) and then skip commercials with the touch of a button, instead of fast‑forwarding (called “Auto Hop”). Judge Swain ruled that the combination of these features did not constitute direct copyright infringement:
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Judge Swain yesterday granted a motion for judgment on the pleadings in favor of PricewaterhouseCoopers and certain other defendants with respect to certain Securities Act claims in a class action relating to AIG’s subprime exposure.   The complaint alleged that certain accounting statements in offering documents were false, but expressly disclaimed that they were fraudulently made – presumably to avoid having to plead fraud with particularity.  Under the Securities Act, false statements in offering materials can be actionable even without fraudulent intent. After the complaint was filed, the Second Circuit decided  Fait v. Regions Financial, which held that plaintiffs challenging statements of opinion in offering materials must plead and prove that the speaker subjectively disbelieved the claims to recover under the Securities Act.  Judge Swain’s ruling was largely based on Fait.  She concluded that the accounting statements were opinions within the ambit of Fait and also concluded that disputes concerning accounting standards could be decided on the pleadings:
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