In an opinion yesterday, Judge Wood dismissed a securities fraud case against Papa John’s that arose from two articles in Forbes in 2018 (see here and here), describing (among other things) an allegedly “toxic” culture of workplace sexual harassment.  The stock price dropped after the articles were published, and the theory of the complaint was that investors had been deceived by various public statements portraying a different culture—such as the company Code of Ethics stating that Papa John’s was governed by “principles of honesty, fairness, mutual respect, trustworthiness, courage and personal and professional commitment.”

Judge Wood had dismissed an earlier version of the complaint, and in yesterday’s opinion, concluded that the amended version still failed to state a claim because the statements at issue were “vague, broad, and merely aspirational.” The amended complaint emphasized for the first time that the Code promised that employees who violated its terms would be subject to “corrective action,” but Judge Wood concluded that this statement was still not specific enough:
Continue Reading Judge Wood: “Puffery” in Papa John’s Code of Ethics Cannot Support Securities Fraud Claims

Yesterday, Judge Wood dismissed an attempt by internet service provider (ISP) Windstream to secure a declaratory judgment that its status as an ISP meant that it lacked the necessary knowledge and ability to secondarily infringe copyrights under the Digital Millennium Copyright Act.  The defendant, music publisher BMG, argued that the court lacked jurisdiction to issue what would amount to an advisory opinion preventing any future infringement claims against ISPs.
Continue Reading Judge Wood Dismisses Preemptive Copyright Action Brought By Internet Service Provider

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, 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

A complaint filed on Friday by the City of Providence accuses high frequency stock traders, stock exchanges and brokerage houses of rigging the stock market at the expense of ordinary investors.  Coming in the wake of publicity from Michael Lewis’ new book, Flash Boys, the suit is brought on behalf of a massive putative class of all investors who bought or sold shares on public exchanges for the past five years.  Among the named defendants are the NASDAQ and New York Stock Exchanges, Bank of America, E*Trade and other banks and brokers.
Continue Reading Complaint Alleges Fraud by High Frequency Traders, Stock Exchanges and Brokers

In a motion filed yesterday, Disney, Fox, Paramount, Warner Brothers and Viacom filed a motion for partial summary judgment asking Judge Baer to rule that LimeWire intentionally fostered infringement of the studios’ copyrights in movies and TV shows by distributing the LimeWire peer-to peer file sharing software. In May of 2010, in Arista – an analogous and hotly contested suit brought by thirteen record companies – Judge Wood found LimeWire liable on summary judgement, finding that the evidence of intent to foster infringement of musical recordings was “overwhelming.” Ultimately LimeWire settled that case – for $105 million – during a trial to determine damages. The studios’ motion relies heavily on that decision, arguing that the legal and factual issues are identical, and collateral estoppel therefore compels the identical result.
Continue Reading Studios File “Me Too” Summary Judgment Motion in Action Against LimeWire