In an opinion yesterday, Judge Swain ruled that “leave and mail” service under the CPLR was inconsistent with due process when used on a nonresident, at least where the case arises outside New York.  The petitioner had sought to confirm an arbitration award against an Indian citizen who lives abroad but who apparently rents an apartment in the Time Warner Center in Manhattan.  While the respondent was in town, the petitioner left a copy at the Time Warner Center and mailed a second copy.  Judge Swain found that the respondent would have to be personally served while here to satisfy due process:
Continue Reading Judge Swain: CPLR “Leave and Mail” Service Insufficient for Nonresidents Where Claims Arise Outside New York

The SDNY Blog is relaunching as a publication of Steptoe & Johnson LLP.  We expect to post several times a week on decisions and other developments in the Southern District of New York.  You can find us right here at www.sdnyblog.com, or follow us on Twitter or Facebook.

Here’s a quick summary of what’s been happening in the Southern District while we were away:

  • Judge Berman vacated the NFL’s four-game suspension of New England Patriots quarterback Tom Brady for his alleged role in deflating footballs used during the 2015 AFC Championship Game.  Judge Berman concluded that “Brady had no notice that he could receive a four-game suspension for general awareness of ball deflation by others or participation in any scheme to deflate footballs, and non-cooperation with the ensuing Investigation.”


Continue Reading SDNY Blog Returns as Steptoe Blog

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:
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

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:

Continue Reading Judge Swain Stays Securities Class Action Pending Supreme Court Challenge to Fraud-on-The-Market Presumption

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:
Continue Reading Judge Swain Refuses to Enjoin Dish Network Features Allowing Recording of All Prime Time Shows and Commercial Skipping