Summary Judgment

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In an opinion last week, Judge Engelmayer denied defendant’s motion for summary judgment regarding the “unorthodox transaction” exception to Section 16(b) of the Securities Exchange Act. Previously, the Second Circuit had vacated and remanded Judge Engelmayer’s earlier decision, which had granted summary judgment, on the grounds that the defendant had not “carried his burden” to show that there was no genuine dispute that he “did not have access to inside information.”

In line with the Second Circuit’s mandate, the Court reopened discovery on this limited factual issue. Ultimately, the only evidence on the relevant issue was testimonial. The plaintiffs allege that the defendant received inside information during a phone call, but the two participants to the call say they only discussed public information. Reviewing the evidence on remand, Judge Engelmayer held that the defendant still had not carried his burden to “indisputably” prove his affirmative defense.

As an initial matter, Judge Engelmayer pointed out that there is no consensus from appellate courts on the moving party’s burden at summary judgment when the moving party has the burden of proof on the merits of the issue:Continue Reading Judge Engelmayer: Summary Judgment Is Not Appropriate Where “Uncontradicted” Testimonial Evidence Could Still Be Disbelieved By Jury

On Monday, Judge Seibel ordered a plaintiff to re-submit an amended 56.1 statement response to comply with the Local Rules. Judge Seibel explained that the response, at 356 pages, was too long and argumentative, did not properly controvert certain of defendants’ statements, and did not include pincites when citing record evidence.

Summarizing the issues with plaintiff’s 56.1 response, Judge Seibel wrote:Continue Reading Judge Seibel: 56.1 Response is Not the Occasion for “Context” or “Semantic Quibbles”

In an opinion Monday, Judge McMahon denied a motion by Blackberry and certain former executives for summary judgement in a securities class action. In the same ruling, she denied Blackberry’s motion to strike the plaintiffs’ Rule 56.1 statement, which allegedly contained improper legal arguments instead of factual responses.  Judge McMahon criticized the motion as “pointless”…

In a decision yesterday, Magistrate Judge Pitman denied summary judgment to Spirit Airlines, which was sued by a pro se passenger who claims to have been improperly booted off a flight for having ignored the exit row briefing.

Judge Pitman noted that the “parties’ versions of the material events are substantially different.”  According to Spirit, the passenger refused to hang up his cell phone when the briefing started, and then became combative.  According to the passenger, he was texting, but stopped when asked.  It was the flight crew that became combative, he claims, and so he left the plane because he was “afraid.”
Continue Reading Judge Pitman: Passenger Booted Off Plane, Allegedly for Ignoring Exit Row Briefing, Can Proceed to Trial of Breach of Contract Case

In an opinion Tuesday, Judge Seibel lambasted, but ultimately did not sanction, attorneys in an insurance dispute who made evasive and false assertions in a Rule 56.1 statement submitted in opposition to summary judgment.  She found the statements lacked a “factual basis,” and were a “sham,” and added that the attorneys’ conduct “was entirely unbecoming of members of our profession.”  She nonetheless concluded “in light of the high standard for bad faith, and the caution with which courts should approach the question of bad faith,” not to award sanctions, for two reasons:
Continue Reading Judge Seibel Nearly Sanctions Attorneys for “Sham” Responses to Rule 56.1 Opposition Statement

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.

Continue Reading Judge Sweet: Allegations of Bear Stearns’ Material Omissions Before Its Collapse Survive Summary Judgment

In the ongoing civil litigation against Madoff feeder fund Fairfield Greenwich and others (see our previous coverage here), Judge Marrero took the unusual step yesterday of denying Standard Chartered’s request for a pre-motion conference for their contemplated summary judgment motion.  Standard Chartered had argued that a summary judgment motion was appropriate on a number…