The story is here.
The firm was also the subject of a Super Lawyers article in September (see this post).
Judge Rakoff yesterday issued one of his short “bottom line” Orders — with full opinion to follow — granting JP Morgan near complete summary judgment in a case in which the European bank Dexia and its former subsidiary accused Bear Stearns (later acquired by JP Morgan) of failing to comply with its stated underwriting guidelines for certain mortgage-backed securities. Reuters’ Alison Frankel is reporting that the win reduces JP Morgan’s exposure by $770 million, to about $5.7 million. The motion papers are here: motion; opposition; reply.
Based on the transcript (here and here), it appears Judge Rakoff was likely persuaded by the fact that the plaintiffs did not read the offering documents referencing the underwriting guidelines that the complaint alleged were ignored, and, instead, the plaintiffs appeared to try to switch theories for summary judgment:
Judge Sullivan on Friday dismissed a shareholder class action against RIM, maker of the Blackberry smartphone, because the allegations amounted to mere “mismanagement”:
It is plain from the CAC as well as RIM’s financial trajectory over the past two years that Defendants have failed to keep pace with their rivals in the highly competitive market for smartphones and information technology. As a consequence, Defendants have paid a price for their mistakes by way of demotions, terminations, and sizable financial setbacks. Nevertheless, corporate failings alone do not give rise to a securities fraud claim. Here, the facts alleged by Plaintiff support a finding of corporate mismanagement, not misfeasance.
In a decision Friday, Judge Swain largely denied a summary judgment motion in a shareholder class action arising from allegations that Pfizer concealed the risks of two drugs, Celebrex and Bextra. She rejected the defendants’ argument that the case “concern[ed] merely a ‘good-faith disagreement about the proper interpretation of scientific data” because “the record is replete with evidence that Defendants recognized that Celebrex and Bextra had associated cardiovascular risks, that such risks would be considered material by investors, and that Defendants nonetheless misrepresented and actively concealed these risks.”
In a 161-page decision issued Friday, Judge Buchwald dismissed a substantial portion of a series of cases accusing major banks of colluding to manipulate LIBOR. (Our prior post on the motions is here.) She first dismissed the antitrust claims for lack of antitrust injury:
As plaintiffs rightly acknowledged at oral argument, the process of setting LIBOR was never intended to be competitive. Tr. 12, 18. Rather, it was a cooperative endeavor wherein otherwise competing banks agreed to submit estimates of their borrowing costs to the BBA each day to facilitate the BBA’s calculation of an interest rate index. Thus, even if we were to credit plaintiffs’ allegations that defendants subverted this cooperative process by conspiring to submit artificial estimates instead of estimates made in good faith, it would not follow that plaintiffs have suffered antitrust injury. Plaintiffs’ injury would have resulted from defendants’ misrepresentation, not from harm to competition.
She dismissed the plaintiffs’ RICO claims under the “RICO amendment” to the PSLRA, which states that “no person may rely upon any conduct that would have been actionable as fraud in the purchase or sale of securities to establish a violation of [RICO].” 18 U.S.C. § 1964(c). Those claims were also dismissed because the alleged RICO “enterprise” was located abroad.
Judge Buchwald allowed the plaintiffs to proceed with commodities manipulation claims, but held that articles about LIBOR manipulation published in 2008 put the plaintiffs on “inquiry notice” of their claims, rendering portions of the claims time-barred.
The opinion closed with Judge Buchwald explaining why it was not “incongruous” to substantially dismiss claims arising from the same conduct that has already caused thebanks to pay billions in government fines:
We recognize that it might be unexpected that we are dismissing a substantial portion of plaintiffs’ claims, given that several of the defendants here have already paid penalties to government regulatory agencies reaching into the billions of dollars. However, these results are not as incongruous as they might seem. Under the statutes invoked here, there are many requirements that private plaintiffs must satisfy, but which government agencies need not. The reason for these differing requirements is that the focuses of public enforcement and private enforcement, even of the same statutes, are not identical. The broad public interests behind the statutes invoked here, such as integrity of the markets and competition, are being addressed by ongoing governmental enforcement. While public enforcement is often supplemented by suits brought by private parties acting as “private attorneys general,” those private actions which seek damages and attorney’s fees must be examined closely to ensure that the plaintiffs who are suing are the ones properly entitled to recover and that the suit is, in fact, serving the public purposes of the laws being invoked. Therefore, although we are fully cognizant of the settlements that several of the defendants here have entered into with government regulators, we find that only some of the claims that plaintiffs have asserted may properly proceed.
In a decision today, Judge Sullivan denied a motion from Freddie Mac executives to dismiss the SEC’s claims that they deliberately understated Freddie Mac’s exposure to subprime mortgages. Judge Sullivan wrote, “At its core, this case turns on a single question: when Freddie Mac and its executives used the term ‘subprime,’ what did reasonable investors understand them to mean by it?” The defendants’ motion (discussed in this prior post) had argued that the statements at issue were consistent with the particular, narrow definition of “subprime” intended at the time. Judge Sullivan determined that a broader understanding of “subprime” was plausible in context, and could have misled investors.
Judge Crotty issued an amusing decision yesterday that provides a cautionary tale about reading boilerplate forms before singing them, and about finding a trustworthy dentist. The decision begins, “This lawsuit about a toothache and a dentist’s attempt to insulate herself from criticism by patients has turned into a headache.”
More specifically, the suit is a declaratory judgment class action brought by a dental patient — represented by Debevoise & Plimpton and the Public Citizen Litigation Group — against a dental practice. The dental practice required patients to sign agreements banning them from commenting publicly on their treatment , and assigning to the dental practice a copyright to any such commentary. When the plaintiff complained about his treatment on Yelp and other websites, the practice sent the sites “takedown” notices claiming that it owned the copyright to those comments, and also sent letters to the plaintiff threatening to sue for (among other things) copyright infringement and fraud. The suit seeks (among other things) a declaration that the copyright assignments are void and that this type of commentary is fair use.
Judge Crotty denied the dental practice’s motion to dismiss.
In a decision yesterday, Judge Forrest denied a motion to dismiss a proposed class action challenging JP Morgan’s decision to hold onto certain notes from Lehman Brothers as the firm was collapsing. Judge Jones, before leaving the bench, had dismissed an earlier version of the complaint as based on conclusory “hindsight” (see our prior post on Judge Jones’ decision). Judge Forrest came to the opposite conclusion, based on the updated allegations:
Judge Forrest today denied a motion to dismiss a shareholder class action against Deutsche Bank alleging a fraudulent scheme to sell mortgage-backed securities it knew were riskier than advertised:
Emma Thompson and her husband, Greg Wise, wrote a screenplay about the love triangle between John Ruskin – an influential art critic of the Victorian era – his teenage bride, Euphemia (“Effie”) Gray, and John Everett Millais, Ruskin’s protégé. That screenplay has since been turned into a movie – Effie - starring Thompson, Wise, Dakota Fanning, Tom Sturridge, and Robbie Coltrane, due to be released this year. On Wednesday, Judge Griesa granted Effie Film’s motion for judgment on the pleadings in an action it had filed against Gregory Murphy for a declaration that the “Effie” screenplay does not infringe upon Mr. Murphy’s copyright in “The Countess” – a play and screenplay he authored based upon the same historical events.