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Judge Notes Trial Comes at End of Case, Not Beginning

By Christopher S. Jones

So when your Judge says that ?Defendants are pummeling a straw man,? how do you think it turned out for them? Not to well, actually, as Chief Judge Lewis T. Babcock (D. Colo.) (Reagan Class of ?88) explicitly recognized that ?Plaintiffs allege not that the Defendants made false statements concerning demand for their products but rather that they omitted to disclose information that they had a duty to reveal,? and concluded that ?a jury could find that the Defendants had a duty to make a full and truthful disclosure of the facts.? Ah yes, the omission. That?s still illegal too, you know.

Judge Babcock also rejected Defendants' attempts ?to require that a Plaintiff?s complaint mimic a newspaper article, specifying the what, where, when, why, and how of each discrete communication and transaction of which the fraud was constituted, ? finding ?that understanding would render the authorities meaningless.?

You see, that?s because ?requiring plaintiffs to set forth in their complaints each and every piece of evidence demonstrating the fraudulent event would be tantamount to trying the case at the pleadings stage, which is verboten.? So, ?while the PSLRA certainly heightened pleading standards for securities fraud lawsuits,? Judge Babcock says that ?if Congress had intended in securities fraud lawsuits to abolish the concept of notice pleading that underlies the Federal Rules of Civil Procedure, Congress would have done so explicitly.?

You can read Croker v. Carrier Access, issued July 18, 2006, at 2006 U.S. Dist. LEXIS 48603.

Nugget: ?The plaintiffs have filed an Amended Complaint consisting of 102 pages, which the defendants describe as prolix. Whether prolix, ponderous, or panoptic, the document is insufficiently detailed to satisfy the defendants, who move in two separate motions for dismissal on the ground that the allegations are not particular.?

Full post as published by The PSLRA Nugget on August 08, 2006 (boomark / email).