Robert J. Meyer v. William Britton Greene
2013 U.S. App. LEXIS 4187
| 11th Cir. | 2013Background
- Southfield Fire & Police Retirement System sues St. Joe Company and officers for alleged Sections 10(b) and 20(a) securities fraud during the Class Period (2008–2011).
- Plaintiffs allege overstatement of real estate holdings by failing to take impairment charges on assets held and used, contrary to GAAP standards.
- Einhorn Presentation (Oct 13, 2010) allegedly exposed overvaluation and prompted a stock drop; initial complaint based on post-presentation decline.
- District court dismissed without prejudice, then with prejudice, finding no loss causation, no actionable misrepresentation, and no scienter.
- St. Joe announced a new strategy in Jan 2012 valuing impairment at $325–$375 million, cited by investors as newly discovered evidence but not altering the court’s analysis.
- Appeal challenges loss causation under the fraud-on-the-market framework; the panel affirms dismissal on loss causation grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether loss causation is adequately pleaded | Southfield asserts a causal link via corrective disclosures. | St. Joe contends disclosures do not reveal the truth of prior misstatements. | Loss causation not adequately pleaded; affirmed. |
| Whether the Einhorn Presentation qualifies as a corrective disclosure | Presentation revealed hidden impairment of assets. | Information was public; the presentation did not reveal new truth. | Not a corrective disclosure; fails under efficient market theory. |
| Whether SEC investigations constitute corrective disclosures | Disclosures of investigations align with misstatement risk and asset value. | Investigations alone do not reveal falsity of prior statements. | SEC investigations alone are insufficient corrective disclosures. |
| Whether the market-efficiency framework forecloses loss causation here | Fraud-on-the-market allows presumption of reliance and supports loss causation. | Efficiency does not convert public information into a corrective disclosure. | Efficiency-based reasoning does not salvage loss causation here; claims fail. |
Key Cases Cited
- Basic Inc. v. Levinson, 485 U.S. 224 (U.S. 1988) (fraud-on-the-market presumption of reliance)
- Dura Pharm., Inc. v. Broudo, 544 U.S. 336 (U.S. 2005) (loss causation requirement; inflation must be corrected by truth)
- FindWhat Investor Grp. v. FindWhat.com, 658 F.3d 1282 (11th Cir. 2011) (corrective disclosures must reveal new information)
- Robbins v. Koger Props., Inc., 116 F.3d 1441 (11th Cir. 1997) (loss causation standard and causal connection)
- Hubbard v. BankAtlantic Bancorp, Inc., 688 F.3d 713 (11th Cir. 2012) (substantial/major cause requirement for loss causation)
- In re Williams Sec. Litig.—WCG Subclass, 558 F.3d 1130 (10th Cir. 2009) (loss causation and corrective disclosure framework)