On March 8, 2019, Judge Donovan W. Frank of the federal District Court of Minnesota granted Defendants’ motion for summary judgment in a securities action against Simpson Thacher’s clients, Best Buy and certain executives, and dismissed Plaintiffs’ claims in full with prejudice. Simpson Thacher previously obtained a groundbreaking reversal by the Eighth Circuit of the certification of a class, after being engaged following the district court’s decision granting class certification. The Eighth Circuit adopted Defendants’ arguments that the record evidence of a lack of price impact successfully rebutted the fraud-on-the-market presumption of reliance, under the Supreme Court’s Halliburton II decision.
On remand, the district court determined that absent the presumption of reliance, each individual plaintiff would need to demonstrate its actual reliance on the alleged misstatements.
Defendants then moved for summary judgment on the ground that Plaintiffs had failed to carry their burden of proving actual reliance citing, among other things, testimony from the lead plaintiff that he had not heard or seen the alleged misstatements before purchasing stock. The district court agreed and granted Defendants’ motion, dismissing Plaintiffs’ claims with prejudice.
The decision received extensive media coverage in Reuters, Law360 and Bloomberg Law. Reuters’ legal analyst noted that Simpson Thacher’s “tenacity” and defense strategies “changed the course of the case,” resulting in a “landmark ruling . . . worth recounting because future securities defendants will surely try to replicate arguments that worked so well for Simpson Thacher and its client.” To read the Reuters article, click here. To read the Law360 article,click here (subscription required). To read the Bloomberg Law article, click here (subscription required).
The Simpson Thacher team includes Joe McLaughlin, George S. Wang, Daniel J. Stujenske, Michael Carnevale and Adam Saltzman.