Thursday, August 31, 2006

Two Little Birds, One Big Stone

Judge Lance M. Africk (E.D. La.) (George W., Class of ’02) combined his rulings on the motions to dismiss the US Unwired securities class action and the derivative case. You see, after tossing the derivative case on a standing issue, it all came down to safe harbor and loss causation, with Judge Africk first finding that “beyond the blanket assertion by plaintiff that defendants knew that these statements were false when they were made, the Court can find no other suggestions of this alleged fraud.”

As for Dura, chalk this one up for the defense, as Judge Africk held that the Amended Complaint’s “Truth Begins to Emerge," section “failed to detail the statements made during the class period that would have revealed the truth about defendants' alleged misrepresentations and shown these misrepresentations to be the proximate cause of plaintiff's losses.”

So that’s it, right? Well, maybe not, as the dismissal was entered without prejudice. Remains to be seen if Plaintiffs will take another shot and amend.

You can read Romero v. US Unwired, issued August 11, 2006, at 2006 U.S. Dist. LEXIS 60589.

Nugget: “To establish the requisite causation, the truth regarding a defendant's putative misrepresentations must come to light.”

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