So get this, in the Interbank securities class action, the D.C. Circuit Court of Appeals reviewed Judge John D. Bates' (D.D.C.) 2004 partial dismissal of CIBC and Radin Glass and sent it back to him, telling him to explain why he dismissed with prejudice. Well, looks like he's complied with that Order, and it is doubtful (to say the least) that Plaintiffs will be very happy about it. As Judge Bates puts it, “Plaintiffs did not merely fail to comply with some technical procedural requirement; rather, they failed to come forward with allegations sufficient to sustain the claims against either of these two defendants in the face of a motion to dismiss under Rule 12(b)(6) or a motion for judgment on the pleadings under Rule 12(c).”
Of course, “had plaintiffs' failure to meet the pleading requirements been the result of ignorance about the PSLRA's standards, and had plaintiffs represented that they were capable of making more detailed allegations, perhaps dismissal with leave to re-plead would have been warranted. But, as it was, plaintiffs could not possibly have alleged other facts consistent with the challenged complaint sufficient to make out a proper cause of action against CIBC or Radin.” So, you see, “dismissal without prejudice would only have resulted in a futile effort by plaintiffs to re-litigate the same issues determined against them by this Court and not challenged on appeal.”
You can read In re Interbank, issued May 26, 2006, at 2006 U.S. Dist. LEXIS 33463.
Nugget: “By limiting their appeal to the finding that there was no proper motion to amend and the decision to dismiss the claims with prejudice, plaintiffs conceded that their complaint was inadequate.”