Opinion
Master File 02 Civ. 3288 (DLC), No. 04 Civ. 9388.
March 24, 2006
Marc M. Seltzer, Stephen E. Morrissey, Susman Godfrey L.L.P., Los Angeles, CA, For Plaintiff Jeffrey C. Barbakow.
Martin London, Richard A. Rosen, Brad S. Karp, Eric S. Goldstein, Walter Rieman, Joyce S. Huang, Paul, Weiss, Rifkind, Wharton Garrison LLP, New York, NY, and Peter K. Vigeland, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, For Defendants Citigroup Inc., Citigroup Global Markets, Inc. f/k/a Salomon Smith Barney, Inc., and Jack Grubman.
Elliot Lauer, Michael Moscato, Daniel R. Marcus, Curtis, Mallet-Prevost, Colt Mosle LLP, New York, NY, For Defendant Arthur Andersen LLP.
MEMORANDUM OPINION AND ORDER
As part of the fourth tranche of motions to dismiss in the WorldCom Securities Litigation, the defendants have moved to dismiss the entirety of the complaint filed by Jeffrey C. Barbakow asserting "holder" claims under California law. Barbakow filed this action in California state court on June 24, 2004, approximately two years after WorldCom made its devastating disclosure of fraud. Barbakow filed an amended pleading on August 20, 2004 ("Complaint"). The action was removed to federal court on September 23, 2004, and transferred thereafter to this Court, where it was consolidated for pretrial purposes with theSecurities Litigation.
The Complaint pleads five causes of action under California law. It pleads two claims for fraud and negligent misrepresentation, and a single claim for aiding and abetting a breach of fiduciary duty. Barbakow responds to the motions to dismiss by inter alia referring to facts not alleged in the Complaint and requesting leave to amend. Pursuant to a scheduling order in the Securities Litigation, Barbakow had a right to amend his complaint within twenty-one days of its arrival on this Court's docket, or by late December 2004. See In re WorldCom, Inc. Sec. Litig., 02 Civ. 3288, 2003 WL 21219037, at *5 (S.D.N.Y. May 22, 2003). Barbakow did not amend his pleadings at that time.
It remains to be seen whether Barbakow can successfully plead his five claims. He will be granted leave to amend, with the following conditions. He may add no new parties or claims. He must strike as defendants the John Does and any party he did not timely serve with the Complaint. He will not be granted a further opportunity to amend his pleading.
Conclusion
Barbakow may file a second amended complaint that conforms to the requirements of this Memorandum Opinion and Order if he does so by April 14, 2006. Any motion to dismiss is due May 12; any opposition is due May 26, 2006; any reply is due June 2. Two courtesy copies of all motion papers and pleadings shall be sent directly to Chambers by delivering them to the Courthouse Mailroom, 8th Floor, United States Courthouse, 500 Pearl Street, New York, New York.
SO ORDERED.