Milberg has consistently been a leader in developing the federal securities, antitrust, and consumer protection laws for the benefit of investors and consumers.  The Firm has represented individual and institutional plaintiffs in hundreds of class action litigations in federal and state courts throughout the country.  In most of those cases, Milberg has served as lead or co-lead counsel.  The Firm has also been responsible for establishing many important precedents, including the following:

•      In Merck & Co., Inc. v. Reynolds (U.S. 2010), Milberg, along with other co-lead counsel, won a significant victory before the U.S. Supreme Court, which issued a decision addressing when an investor is placed on “inquiry notice” of a securities fraud violation sufficient to trigger the statute of limitations under 28 U.S.C. § 1658(b).  The Court unanimously ruled that the two-year statute of limitations was not triggered because plaintiffs did not have actual or constructive knowledge of “the facts constituting the violation,” and as such, the case was not time-barred.  Importantly, the Court held that the plaintiff must be on actual or constructive notice of facts concerning the defendants’ scienter in order to trigger the statute of limitations.  This decision is significant in that it potentially enables plaintiffs to bring claims based on misstatements that are more than two years old.

•      In re Lord Abbett Mutual Funds Fee Litigation, 553 F.3d 248 (3d Cir. 2009).  This important decision set significant precedent regarding the scope of preemption under the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”).  In reversing the District Court’s dismissal of the plaintiffs’ claims, the Third Circuit held that “SLUSA does not mandate dismissal of an action in its entirety where the action includes only some pre-empted claims.”  In so holding, the court explained that “nothing in the language, legislative history, or relevant case law mandates the dismissal of an entire action that includes both claims that do not offend SLUSA’s prohibition on state law securities class actions and claims that do . . . .”

•      Abdullahi v. Pfizer, Inc., 562 F.3d 163, 170 (2d Cir. 2009).  In this matter, the plaintiffs, Nigerian children and their families, asserted claims under the Alien Tort Statute (“ATS”) in connection with Pfizer’s clinical trial of the drug, Trovan, without their knowledge.  In January 2009, the Second Circuit reversed the District Court’s dismissal for lack of jurisdiction.  The court held that the plaintiffs pled facts sufficient to state a cause of action under the ATS for a violation of international law prohibiting medical experimentation on human subjects without their consent.  Pfizer’s petition for review of the Second Circuit’s ruling by the United States Supreme Court is currently pending.

•      In re Comverse Technology, Inc. Derivative Litigation, 866 N.Y.S.2d 10 (App. Div. 1st Dep’t 2008).  In this derivative case in which Milberg serves as co-lead counsel, plaintiff shareholders sued certain of the company’s officers and directors based on allegations of illegal options backdating.  The lower court dismissed the plaintiffs’ claims, holding that the plaintiffs failed to make a pre-suit demand on the company’s board, and that in any event, the board had already formed a special committee to investigate the misconduct.  In this significant opinion reversing the lower court’s dismissal, the Appellate Division clarified the standards of demand futility and held that a board of directors loses the protection of the business judgment rule where there is evidence of the directors’ self-dealing and poor judgment.  The court noted that the mere creation of a special committee did not justify a stay of the action and did not demonstrate that the board took appropriate steps.  Rather, “the picture presented in the complaint is that of a special committee taking a tepid rather than a vigorous approach to the misconduct and the resultant harm. Under such circumstances, the board should not be provided with any special protection.”

•      South Ferry LP #2 v. Killinger, 542 F.3d 776 (9th Cir. 2008).  The important opinion issued by the Ninth Circuit in this securities fraud class action clarified, in the post-Tellabs environment, whether a theory of scienter based on the “core operations” inference satisfies the PSLRA’s heightened pleading standard.  In siding with the plaintiffs, represented by Milberg, the Ninth Circuit held that “[a]llegations that rely on the core operations inference are among the allegations that may be considered in the complete PSLRA analysis.”  The court explained that under the “holistic” approach required by Tellabs, all allegations must be “read as a whole” in considering whether plaintiffs adequately plead scienter.  After remand, the District Court found that the plaintiffs sufficiently alleged scienter under the Ninth Circuit’s analysis.

•       In re GileadSciences Securities Litigation, 536 F.3d 1049 (9th Cir. 2008).   In this securities fraud class action in which Milberg represents the plaintiffs, the Ninth Circuit reversed the District Court’s dismissal of the complaint in this opinion clarifying loss causation pleading requirements. In ruling that the plaintiffs adequately pled loss causation, the Ninth Circuit held that the plaintiffs’ complaint identified a “specific economic loss” following the issuance of a specific press release, along with allegations of misrepresentations that were described in “abundant detail.” The opinion established that plaintiffs in a securities fraud action adequately plead loss causation where they provide sufficient detail of their loss causation theory and some assurance that the theory has a basis in fact.  Based on this analysis, the dismissal was reversed, and the case was remanded to the District Court for further proceedings. 

•      In Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007), in which Milberg is lead counsel for the class, the United States Supreme Court announced a uniform standard for evaluating the sufficiency of a complaint under the PSLRA.  The court held that on a motion to dismiss, a court “must consider the complaint in its entirety,” accepting “all factual allegations in the complaint as true,” as well as “tak[ing] into account plausible opposing inferences.”  On remand, the Seventh Circuit concluded that “the plaintiffs have succeeded, with regard to the statements identified in our previous opinion as having been adequately alleged to be false and material, in pleading scienter in conformity with the requirements of the PSLRA. We therefore adhere to our decision to reverse the judgment of the district court dismissing the suit.”  The unanimous decision was written by Judge Richard A. Posner.

•      Asher v. Baxter International, Inc., 377 F.3d 727 (7th Cir. 2004).  In reversing and remanding the District Court’s dismissal, the Seventh Circuit resolved in plaintiffs’ favor an important issue involving the PSLRA’s “safe harbor” for forward-looking statements.  The court held that whether a cautionary statement is meaningful is an issue of fact, because whether a statement is meaningful or not depends in part on what the defendant knew when the statement was made as well as other issues of fact.  Thus, this issue is not appropriately resolved on a motion to dismiss.

•      Gebhardt v. ConAgra Foods, Inc., 335 F.3d 824 (8th Cir. 2003).  This important decision strongly reaffirmed the principle that whether an undisclosed fact would have been material to investors cannot ordinarily be decided on a motion to dismiss.  The Eighth Circuit, stressing that “[t]he question of materiality hinges on the particular circumstances of the company in question,” observed that even relatively small errors in financial statements might be material if they concern areas of particular importance to investors and raise questions about management integrity.

•      In re Cabletron Systems, Inc., 311 F.3d 11 (1st Cir. 2002).  In this opinion, the First Circuit joined the Second Circuit in allowing a complaint to be based on confidential sources.  The court also accepted the argument made by plaintiffs, represented by Milberg, that courts should consider the amount of discovery taken place prior to deciding a motion to dismiss, with a lack of discovery resulting in a correspondingly less stringent standard for pleading securities fraud claims with particularity.

•      InPuckett v. Sony Music Entertainment,No. 108802/98 (N.Y. Sup. Ct. N.Y. Cty. 2002), a class action was certified against Sony Music Entertainment on behalf of a class of recording artists who were parties to standard Sony recording or production agreements entered into during the class period.  The complaint alleged that Sony had a policy of treating the value added tax on foreign sales of recordings improperly thereby impermissibly reducing the royalties paid or credited to the class members.  Justice DeGrasse of the New York State Supreme Court determined that class certification was appropriate and that Gary Puckett (of Gary Puckett & the Union Gap) and jazz musician and composer Robert Watson were appropriate class representatives to represent the class of artists and producers to whom Sony accounts for foreign record royalties.

•       Novak v. Kasaks, 216 F.3d 300 (2d Cir. 2000).  The Firm was lead counsel in this seminal securities fraud case in which the Second Circuit undertook an extensive analysis of the statutory text and the legislative history of the PSLRA and pre-existing Second Circuit case law.  Among other things, the Second Circuit held that the PSLRA’s pleading standard for scienter was largely equivalent to the pre-existing Second Circuit standard and vacated the District Court’s dismissal which sought to impose a higher standard for pleading scienter under the PSLRA.  The Second Circuit also rejected any general requirement that plaintiffs’ confidential sources must be disclosed to satisfy the PSLRA’s newly-enacted particularity requirements.

•      In re Advanta Corp. Securities Litigation, 180 F.3d 525 (3d Cir. 1999).  Here, the plaintiffs, represented by Milberg, successfully argued that under the PSLRA, scienter is sufficiently pled by making an adequate showing that the defendants acted knowingly or with reckless disregard for the consequences of their actions.  The Third Circuit specifically adopted the Second Circuit’s scienter pleading standard for pleading fraud under the PSLRA.

•      In Hunt v. Alliance North American Government Income Trust, Inc., 159 F.3d 723 (2d Cir. 1998), the Second Circuit reversed the District Court’s ruling, which denied plaintiffs leave to amend to assert a cause of action against defendants for failing to disclose that the defendant Trust was unable to utilize proper “hedging” techniques to insure against risk of loss.  In the court’s view, taken together and in context, the Trust’s representations would have misled a reasonable investor.

•      In Shaw v. Digital Equipment Corp., 82 F.3d 1194 (1st Cir. 1996), the First Circuit remanded plaintiffs’ action after affirming, in part, Milbergs’ position that in association with the filing of a prospectus related to the issuance of securities, a corporate-issuer must disclose intra-quarter, materially adverse changes in its business, if such adverse changes constitute “material changes” the disclosure of which is required pursuant to the Securities Act of 1933.

•      In re Salomon, Inc. Shareholders Derivative Litigation, 68 F.3d 554 (2d Cir. 1995).  The Second Circuit affirmed the District Court’s holding that derivative federal securities claims against defendants would not be referred to arbitration pursuant to the arbitration provisions of the Rules of the New York Stock Exchange, but would be tried in District Court.  Shortly thereafter, the case settled for $40 million.

•      Kamen v. Kemper Financial Services, 500 U.S. 90 (1991).  The Supreme Court upheld the right of a stockholder of a mutual fund to bring a derivative suit without first making a pre-suit demand.  Specifically, the Court held that “where a gap in the federal securities laws must be bridged by a rule that bears on the allocation of governing powers within the corporation, federal courts should incorporate state law into federal common law unless the particular state law in question is inconsistent with the policies underlying the federal statute. . . .  Because a futility exception to demand does not impede the regulatory objectives of the [Investment Company Act], a court that is entertaining a derivative action under that statute must apply the demand futility exception as it is defined by the law of the State of incorporation.”

•      Mosesian v. Peat, Marwick, Mitchell & Co., 727 F.2d 873 (9th Cir. 1984), cert. denied, 469 U.S. 932 (1984).  The Ninth Circuit upheld an investor’s right to pursue a class action against an accounting firm, adopting statute of limitation rules for Section 10(b) suits that are favorable to investors.

•      Hasan v. CleveTrust Realty Investors, 729 F.2d 372 (6th Cir. 1984).  The Sixth Circuit very strictly construed, and thus narrowed, the ability of a “special litigation committee” of the board of a public company to terminate a derivative action brought by a shareholder.

•      Fox v. Reich & Tang, Inc., 692 F.2d 250 (2d Cir. 1982), aff’d sub nom, Daily Income Fund, Inc. v. Fox, 464 U.S. 523 (1984).  The court held that a Rule 23.1 demand is not required in a shareholder suit brought pursuant to Section 36(b) of the Investment Company Act.

•      Rifkin v. Crow, 574 F.2d 256 (5th Cir. 1978). The Fifth Circuit reversed an order granting summary judgment for defendants in a Section 10(b) case, paving the way for future acceptance of the “fraud-on-the-market” rationale in the Fifth Circuit.

•       Blackie v. Barrack, 524 F.2d 891 (9th Cir. 1975), cert. denied, 429 U.S. 816 (1976).  This is the seminal appellate decision on the use of the “fraud-on-the-market” theory of reliance, allowing investors who purchase stock at artificially inflated prices to recover even if they were personally unaware of the false and misleading statements reflected in the stock’s price.  In so holding, the court noted that class actions are necessary to protect the rights of defrauded purchasers of securities.

•      Bershad v. McDonough, 300 F. Supp. 1051 (N.D. Ill. 1969), aff’d, 428 F.2d 693 (7th Cir. 1970).  In this case, the plaintiff, represented by Milberg, obtained summary judgment on a claim for violation of Section 16(b) of the Securities Exchange Act, where the transaction at issue was structured by the defendants to look like a lawful option.  The decision has been cited frequently in discussions as to the scope and purpose of Section 16(b).

•       Heit v. Weitzen, 402 F.2d 909 (2d Cir. 1968). The court held that liability under Section 10(b) of the Securities Exchange Act extends to defendants, such as auditors, who were not in privity with the named plaintiffs or the class represented by the named plaintiffs.