Justia Class Action Opinion Summaries

Respondent, First Derivative Traders, representing a class of stockholders in petitioner Janus Capital Group, Inc. ("JCG"), filed a private action under the Securities and Exchange Commission ("SEC") Rule 10b-5, alleging that JCG and its wholly owned subsidiary, petitioner Janus Capital Management LLC ("JCM"), made false statements in mutual funds prospectuses filed by Janus Investment Fund, for which JCM was the investment adviser and administrator, and that those statements affected the price of JCG's stock. Although JCG created Janus Investment Fund, it was a separate legal entity owned entirely by mutual fund investors. At issue was whether JCM, a mutual fund investment adviser, could be held liable in a private action under Rule 10b-5 for false statements included in its client mutual funds' prospectuses. The Court held that, because the false statements included in the prospectuses were made by Janus Investment Fund, not by JCM, JCM and JCG could not be held liable in a private action under Rule 10b-5. The Court found that, although JCM could have been significantly involved in preparing the prospectuses, it did not itself "make" the statements at issue for Rule 10b-5 purposes where its assistance in crafting what was said was subject to Janus Investment Fund's ultimate control. Accordingly, respondent had not stated a claim against JCM under Rule 10b-5 and the judgment of the Fourth Circuit was reversed.

Defendants faxed unsolicited advertisements to plaintiff and others, violating the Telephone Consumer Protection Act, 47 U.S.C. 227. One of the recipients filed a proposed class action in Wisconsin, but dismissed its complaint after the four-year limitations period had run, but before the class was certified. Plaintiff's motion to intervene was denied. The district court denied a motion to dismiss plaintiff's subsequent complaint, reasoning that the limitations period was tolled by the state court filing. The Seventh Circuit affirmed on interlocutory appeal.

The Shoen family controls AMERCO. AMERCO engaged in numerous business transactions with SAC entities, which are real estate holding companies controlled by AMERCO shareholder and executive Mark Shoen. Based on several of those transactions, Appellants-Shareholders filed an underlying shareholder derivative lawsuit against AMERCOâs former and current directors and the SAC entities, primarily for breach of fiduciary duty. However, appellants failed to make a demand for corrective action on AMERCOâs board of directors. Subsequently, AMERCO moved to dismiss the lawsuit. Appellants appealed, and the Supreme Court reversed that decision and remanded the case for further proceedings. On remand, the district court again granted AMERCOâs motion to dismiss, this time because of a settlement agreement that dated back to 1995 in which shareholders agreed not to bring shareholder derivative lawsuits against AMERCO. Appellants sought the Supreme Courtâs review of the district courtâs second dismissal of their case. They asked whether the settlement bars their present lawsuit against AMERCO. The Supreme Court found that the settlement does not bar Appellantsâ case. The Court again reversed the district courtâs decision, and remanded the case for further proceedings.

Plaintiffs appealed from judgments dismissing their class-action complaints seeking to hold defendants (collectively, "Rating Agencies") liable as underwriters or control persons for misstatements or omissions in securities offering documents in violation of sections 11 and 15 of the Securities Act of 1933 ("1933 Act"), 15 U.S.C. 77k(a)(5), 77o(a). At issue was whether the Rating Agencies were "underwriters" as defined by 15 U.S.C. 77b(a)(11) because they helped structure securities transactions to achieve desired ratings. Also at issue was whether the Rating Agencies were "control persons" because of their alleged provision of advice and direction to primary violators regarding transaction structures under section 77o(a) of the 1933 Act. The court held that plaintiffs' section 11 claims that the Rating Agencies were "underwriters" was properly dismissed because the Rating Agencies' alleged structuring or creation of securities was insufficient to demonstrate their involvement in the requisite distributional activities. The court also held that plaintiffs' "control person" claims under section 77o(a) were properly dismissed because the Rating Agencies' provision of advice and guidance regarding transaction structures was insufficient to permit an inference that they had the power to direct the management or policies of alleged primary violators of section 11. The court further held that the district court did not abuse its discretion in denying implicitly plaintiffs' cursory requests for leave to amend.