Plaintiffs claimed that the fiduciaries of their retirement plan violated the Employment Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., in ways that damaged their efforts to stockpile savings for their winter years. The court held that because plaintiffs have not pleaded facts establishing that defendants abused their discretion by following the Plan's directions, they have not stated a valid claim for breach of the duty of prudence. The court also held that plaintiffs have failed to state a viable breach of loyalty claim. Accordingly, the court affirmed the district court's dismissal of plaintiffs' third and last amended complaint. View "Lanfear, et al. v. Home Depot, Inc., et al." on Justia Law
Justia Professional Malpractice & Ethics Opinion Summaries
In this securities fraud class action, the investor plaintiffs sued the defendant company and three of its principal officers, alleging that they had made a series of eleven false or misleading statements to the public, in violation of section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, 15 U.S.C. 78a et seq. Plaintiffs claimed that the false statements had the effect of artificially inflating the price of defendant's stock until the truth belatedly came out, at which time the stock price dropped and plaintiffs suffered substantial financial losses. The court held that the district court properly dismissed plaintiffs' claims arising from the alleged misstatements made on March 5, 2004 and July 26, 2004, because plaintiffs have inadequately pled scienter and falsity. However, as for plaintiffs' claims arising out of defendant's February 23, 2005 and March 16, 2005 statements, the court vacated the district court's entry of summary judgment. The court held that the securities laws prohibited corporate representatives from knowingly peddling material misrepresentations to the public, regardless of whether the statements introduced a new falsehood to the market or merely confirmed misinformation already in the marketplace. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Findwhat Investor Group, et al. v. Findwhat.com, et al." on Justia Law
The United States appealed an award of attorney's fees and costs under the Hyde Amendment, Pub. L. No. 105-119, section 617, 111 Stat. 2440, 2519, and two attorneys, Sean Cronin and Andrea Hoffman, appeal public reprimands entered against them based on their work as Assistant United States Attorneys in an underlying criminal action marked by hard adversarial tactics. The court held that the district court abused its discretion when it imposed sanctions against the United States for a prosecution that was objectively reasonable, and the district court violated the constitutional right to due process of the two lead prosecutors, when it denied them notice of any charges of misconduct and an opportunity to be heard. Therefore, the court vacated the award of attorney's fees and costs against the United States and the public reprimand of Cronin and Hoffman, but the court denied the request of Cronin and Hoffman that the court reassign the case to a different district judge at this stage. View "United States v. Shaygan" on Justia Law
Plaintiff filed a declaratory judgment action against its insurer to determine whether its professional liability policy issued to plaintiff provided coverage for plaintiff's erroneous disbursement of client funds from its trust account. At issue was whether the district court properly granted the insurer's motion for summary judgment denying coverage where the district found no coverage under the policy. The court held that plaintiff's erroneous transfer of its clients' trust funds to a third party was an act or omission in the conduct of its professional fiduciary duties to its clients that would give rise to a claim of negligence against it by those clients and for which it would have been liable for damages. Such a claim for a negligent act or omission was covered by the plain terms of the policy issued by the insurer to plaintiff. Accordingly, the entry of summary judgment for insurer was reversed and the case remanded for entry of summary judgment for plaintiff. The district court's award of costs against plaintiff was also reversed.