Liberty Media Corp. v. Vivendi Universal, S.A.
2012 U.S. Dist. LEXIS 51110
S.D.N.Y.2012Background
- At March 7, 2012, the court orally granted in part plaintiffs’ partial summary judgment on collateral estoppel, denied part of plaintiffs’ motion, denied defendants’ motion for partial summary judgment against all plaintiffs, and denied defendants’ motion for reconsideration; a written opinion followed.
- Defendants moved for reconsideration of the February 6, 2012 SLUSA Memorandum Opinion; the motion was denied.
- The Merger Agreement was signed December 16, 2001 by Liberty Media and Vivendi, with closing May 7, 2002 exchanging different securities; transfers were evidenced by documents recorded in France and a May 8, 2002 letter agreement.
- Extraterritorial reach of Section 10(b) was analyzed under Morrison; irrevocable liability occurred on December 16, 2001, making the multiThematiques transaction a domestic transaction under the statute.
- Plaintiffs’ motion for collateral estoppel was granted as to falsity, materiality, and scienter for 25 statements; partial summary judgment granted on Merger Agreement §3.11 and denied on §3.12; remaining issues to be resolved on scope and numbers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the reconsideration denial was proper under Rule 6.3 | Liberty Media contends the decision overlooks controlling data and corrects clear error. | Vivendi argues reconsideration should be granted to revisit SLUSA conclusions. | Motion denied; standard satisfied. |
| Whether Section 10(b) applies to the multiThematiques transaction | Transaction involved within Morrison/Absolute Activist framework; irrevocable liability occurred domestically. | Claims questioned timing of liability and title transfer; domestic status disputed. | Irrevocable liability occurred in the U.S. on Dec 16, 2001; transaction deemed domestic; Section 10(b) applies. |
| Whether collateral estoppel bars relitigation of falsity, materiality, and scienter | Jury verdict in class action established these elements; estoppel should apply to similar claims here. | Differences in standards or procedural posture could preclude estoppel. | Yes, collateral estoppel applies to falsity, materiality, and scienter for the 25 statements. |
| Scope and application of Merger Agreement §§ 3.11 and 3.12 | Collateral estoppel should apply to breaches under §3.11; §3.12 best interpreted with the evidence. | Standards differ; §3.11 mirrors Rule 10b-5; §3.12 concerns overall compliance with laws. | Partial summary judgment granted on §3.11; §3.12 denial; scope of 3.11 to be resolved at trial. |
Key Cases Cited
- Morrison v. National Australia Bank Ltd., 130 S. Ct. 2869 (2010) (defines domestic transaction and irrevocable liability under §10(b))
- Janus Capital Group, Inc. v. First Derivative Traders, 131 S. Ct. 2296 (2011) (attribution of statements and ultimate authority in §10(b) claims)
- Dabit v. Merrill Lynch, Pierce, Fenner & Smith, 395 F.3d 25 (2d Cir. 2005) (SLUSA preemption and state-law claims)
- Caiola v. Citibank, 295 F.3d 312 (2d Cir. 2002) (materiality is objective; reliance governs 10b-5)
- Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979) (finality and preclusion principles in collateral estoppel)
- Lummus Co. v. Commonwealth Oil Refining Co., 297 F.2d 80 (2d Cir. 1961) (finality concept in adjudication)