Opinion
06 Civ. 2567 (SAS).
June 20, 2006
For Plaintiff:
Frederick Taylor Isquith, Esq. Daniel W. Krasner, Esq. Alexander H. Schmidt, Esq. WOLF HALDENSTEIN ADLER FREEMAN HERZ LLP New York, NY
Melvyn I. Weiss, Esq. Robert Wallner, Esq. MILBERG WEISS BERSHAD SCHULMAN LLP New York, NY
Stanley Bernstein, Esq. Rebecca M. Katz, Esq. BERNSTEIN LIEBHARD LIFSHITZ, LLP New York, NY
For Defendant Goldman Sachs Co.
Gandolfo V. DiBlasi, Esq. Penny Shane, Esq. David M.J. Rein, Esq. SULLIVAN CROMWELL LLP New York, NY
MEMORANDUM OPINION AND ORDER
This is one of more than a hundred similar actions brought for the purpose of preventing the expiration of the statute of limitations applicable to certain claims that would be assigned as part of a pending partial settlement of the coordinated cases known as In re Initial Public Offering Securities Litigation. I have explained the full background behind the "LaSala Actions" in prior Opinions concerning these actions, familiarity with which is assumed. In an Opinion and Order dated February 24, 2006, I held, inter alia, that LaSala's amended Complaint failed to state a claim upon which relief can be granted, and thus dismissed with prejudice all the LaSala Actions filed to that point. The parties to the LaSala Actions had earlier stipulated that my resolution of the parties' arguments in one action selected as a test case ("the Fatbrain case") would control the resolution of every other LaSala Action. Plaintiff has filed an appeal of the February 24 Opinion with the Second Circuit Court of Appeals.
See LaSala v. Needham Co., 399 F. Supp. 2d 421 (S.D.N.Y. 2005) (issuing stay of proceedings in deference to pending Issuers Settlement of In re Initial Public Offering Sec. Litig., 21 MC 92); LaSala v. Needham Co., 399 F. Supp. 2d 466 (S.D.N.Y. 2005) (lifting stay for limited purpose of dismissing plaintiff's complaint with leave to replead); LaSala v. Needham Co., No. 04 Civ. 9237, 2006 WL 452024 (S.D.N.Y. Feb. 24, 2006), appeal docketed, 06-2643 (2d Cir. June 2, 2006) (" LaSala III") (lifting stay and dismissing action with prejudice once it became clear that plaintiff could not state a valid claim); LaSala v. Needham Co., No. 04 Civ. 9237, 2006 WL 1206241 (S.D.N.Y. Apr. 28, 2006, as amended May 2, 2006) (" LaSala IV") (denying plaintiff's motion for reconsideration, as well as a tardy motion to intervene).
See LaSala III, 2006 WL 452024, at *5-8.
In the interest of judicial economy, I have stayed entry of final judgment in every LaSala action controlled by the stipulation except Fatbrain, pending the resolution of plaintiff's appeal in Fatbrain. See LaSala IV, 2006 WL 1206241, at *1.
Originally, all but a handful of the Underwriter defendants entered into tolling agreements with respect to the Assigned Claims. However, after I dismissed the LaSala Actions brought against the non-tolling Underwriters, many of the tolling agreements collapsed. Thus, to preserve the Assigned Claims against these Underwriters in the event the Second Circuit reverses my rulings in Fatbrain, plaintiff is continuing to file LaSala Actions against every Underwriter not currently bound by a tolling agreement.
The original non-tolling Underwriters were Morgan Stanley, J.P. Morgan Securities, Inc., Needham Co., Allen Co., E*TRADE Securities, Inc., and Prudential Equity Group. E*TRADE did not sign the Fatbrain stipulation, so the one case involving E*TRADE was adjudicated separately. See generally LaSala v. E*TRADE Secs., Inc., No. 05 Civ. 5869, 2006 WL 489943 (S.D.N.Y. Feb. 27, 2006), appeal docketed, 06-2642 (2d Cir June 2, 2006).
The Underwriters that have recently terminated their tolling agreements have entered into a stipulation with plaintiff that the resolution of issues in the above-captioned litigation will control the resolution of issues in the "new wave" of LaSala Actions to which these Underwriters are a party, or to which these Underwriters will be a party once each action is filed. This stipulation (so ordered by this Court on June 15, 2006) provides that the same issues raised and resolved in Fatbrain would be raised in these new actions, and that the Court would reach the same resolution. Additionally, the stipulation entered into by the "original" non-tolling Underwriters remains in force with respect to the LaSala Actions that continue to be filed against them.
The following Underwriters have signed the new stipulation: Goldman Sachs Co., Deutsche Bank Securities, CIBC World Markets Corp., SG Cowen Securities Corp., Bear Stearns Co., The Bear Stearns Cos., Inc., Soundview Technology Group, Jefferies Company, Citigroup Global Markets, Inc., Credit Suisse Securities, RBC Dain Rauscher, Inc., and U.S. Bancorp Piper Jaffray, Inc.
See Stipulation and Order Governing All Present and Future "LaSala" Actions Against Certain Additional Underwriter Defendants at 3 (the motions filed by the parties, and the arguments made in support of those motions, would be identical to the motions and arguments made in Fatbrain); id. ¶ 2 (the Court's resolution of [the motions filed in Fatbrain] shall dictate and govern the results of the parallel motions [that would have been filed] in all present and future . . . LaSala Actions").
Accordingly, for the reasons stated in my February 24, 2006 Opinion and Order in LaSala (assignee of Fatbrain.com) v. Needham Company, Inc., No. 04 Civ. 9237, this action is hereby dismissed with prejudice. However, given that the issues raised here, by admission of the parties, are materially identical to those currently under consideration by the United States Court of Appeals for the Second Circuit, entry of final judgment in this action is hereby stayed pending resolution of the appeal captioned LaSala v. Needham Company, Inc., No. 06-2643 (filed June 2, 2006).
See LaSala IV, 2006 WL 1202641, at *1 ("There is no reason to force LaSala to file [many] separate appeals to protect his rights when he essentially . . . seek[s] review of only one ruling.").
SO ORDERED.