15 F. Supp. 3d 336
S.D.N.Y.2014Background
- Plaintiff Monroe County Employees’ Retirement System filed a Feb. 5, 2013 Securities Act class action; CAC later added Markovic and invoked American Pipe tolling.
- SAC asserts Sections 11 and 12 against YPF S.A., Repsol, underwriters, and individual YPF/Repsol directors for a March 23, 2011 ADS offering; tolling denied for the Individual Defendants.
- Exchange Act claims under Section 10(b) and Section 20(a) are asserted against Repsol, YPF, and Individual Defendants, covering Dec. 22, 2009 to Apr. 16, 2012.
- Defendants move to dismiss; court grants the motions in full; claims against the Individual Defendants are dismissed sua sponte.
- The background includes the YPF nationalization in April 2012, related Mosconi Report, and widespread public disclosures of government action risk and investment concerns; the court considers whether disclosures and public reporting affected timeliness and causation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the Securities Act claims time-barred? | Plaintiffs say tolling via American Pipe extends time. | Defendants contend claims untimely regardless of tolling. | Yes; claims untimely under statute, tolling insufficient. |
| Do Exchange Act claims survive with requisite misrepresentation, scienter, and causation? | Plaintiffs claim misrepresentations/omissions and scienter; loss causation alleged. | Defendants argue lack of specificity, no actionable misrepresentation, and no loss causation. | No; claims fail on multiple grounds (specificity, material misrepresentations/omissions, scienter, and causation). |
| Should plaintiffs be allowed to amend the complaint again? | Amendment could cure deficiencies. | Amendment would be futile given untimeliness and lack of causation. | Leave to amend denied; amendments would be futile; dismissal with prejudice. |
Key Cases Cited
- American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (U.S. 1974) (tolling for unnamed class members; timely reassertion after dismissal)
- Basic Inc. v. Levinson, 485 U.S. 224 (U.S. 1988) (duty of disclosure standards in securities fraud)
- Tellabs, Inc. v. Makor Issues & Rights, 551 U.S. 308 (U.S. 2007) (pslra scienter standard and inference guidance)
- In re WorldCom, Inc. Sec. Litig., 346 F. Supp. 2d 628 (S.D.N.Y. 2004) (loss causation and public disclosures; market effects)
- Ganino v. Citizens Util. Co., 228 F.3d 154 (2d Cir. 2000) (causation and misrepresentation pleadings)
- ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87 (2d Cir. 2007) (scienter framework under PSLRA)
- Rivas v. Fischer, 687 F.3d 514 (2d Cir. 2012) (judicial notice and public information; reliance considerations)