838 F.3d 223 (2nd Cir. 2016), 15-180-cv(L), In re Vivendi, S.A. Securities Litigation

Docket Nº:15-180-cv(L), 15-208-cv(XAP)
Citation:838 F.3d 223
Opinion Judge:Debra Ann Livingston, Circuit Judge
Party Name:IN RE VIVENDI, S.A. SECURITIES LITIGATION [1]; MIAMI GROUP, CONSISTING OF THE RETIREMENT SYSTEM FOR GENERAL EMPLOYEES OF THE CITY OF MIAMI BEACH, FRANCOIS R. GERARD, PRIGEST S.A. AND TOCQUEVILLE FINANCE S.A., PEARSON-DONIGER FAMILY, CONSISTING OF TWO SISTERS AND THEIR RESPECTIVE FAMILY MEMBERS BEATRICE DONIGER, GRANDCHILDREN'S TRUST BY BRUCE DO...
Attorney:JEFFREY A. LAMKEN, Molo Lamken LLP, Washington, D.C. (Robert K. Kry, Lauren M. Weinstein, Molo Lamken LLP, Washington, D.C.; Arthur N. Abbey, Stephen T. Rodd, Jeremy Nash, Abbey Spanier, LLP, New York, N.Y.; Matthew Gluck, Michael C. Spencer, Milberg LLP, New York, N.Y.; Brian C. Kerr, Brower Piv...
Judge Panel:Before: CABRANES, LIVINGSTON, AND LYNCH, Circuit Judges.
Case Date:September 27, 2016
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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838 F.3d 223 (2nd Cir. 2016)

IN RE VIVENDI, S.A. SECURITIES LITIGATION 1;

MIAMI GROUP, CONSISTING OF THE RETIREMENT SYSTEM FOR GENERAL EMPLOYEES OF THE CITY OF MIAMI BEACH, FRANCOIS R. GERARD, PRIGEST S.A. AND TOCQUEVILLE FINANCE S.A., PEARSON-DONIGER FAMILY, CONSISTING OF TWO SISTERS AND THEIR RESPECTIVE FAMILY MEMBERS BEATRICE DONIGER, GRANDCHILDREN'S TRUST BY BRUCE DONIGER TRUSTEE, ALISON DONIGER, MICHAEL DONIGER, EDWARD B. BRUNSWICK AND RUTH PEARSON TRUST PEARSON TRUSTEE, GAMCO INVESTORS, INCORPORATED, OPPENHEIM KAPITALANLAGEGESELLSCHAFT MBH, PLAINTIFF KBC ASSET MANAGEMENT N.V., CAPITALIA ASSET MANAGEMENT SGR, S.P.A., CAPITALIA INVESTMENT MANAGEMENT S.A., EURIZON CAPITAL SGR S.P.A., BADEN-WURTTEMBERGISCHE INVESTMENTGESELLSCHAFT MBH, BARCLAYS GLOBAL INVESTORS (DEUTSCHLAND), COMINVEST ASSET MANAGEMENT GMBH, DEUTSCHE ASSET MANAGEMENT INVESTMENTGESELLSCHAFT MBH, DWS (AUSTRIA) INVESTMENTGESELLSCHAFT MBH, DWS INVESTMENT GMBH, ERSTE-SPARINVEST KAPITALANLAGEGESELLSCHAFT M.B.H., FORSTA AP-FONDEN, FORTIS INVESTMENT MANAGEMENT SA, KBC ASSET MANAGEMENT S.A., LANDESBANK BERLIN INVESTMENT GMBH, LBBW LUXEMBURG S.A., OPPENHEIM ASSET MANAGEMENT SERVICES S.A.R.L., PIONEER INVESTMENT MANAGEMENT LIMITED, PIONEER INVESTMENT MANAGEMENT SGRPA, PIONEER INVESTMENTS AUSTRIA GMBH, PIONEER INVESTMENTS KAPITALANLAGEGESELLSCHAFT MBH, RAIFFEISEN KAPITALANLAGE-GESELLSCHAFT M.B.H., SEB INVESTMENT MANAGEMENT AB, SKANDIA INSURANCE COMPANY LTD., UNION ASSET MANAGEMENT HOLDING AG, UNIVERSAL-INVESTMENTGESELLSCHAFT MBH, SEB INVESTMENT GMBH, ANDRA AP-FONDEN, BAYERNINVEST KAPITALANLAGEGESELLSCHAFT MBH, DEKA INVESTMENT GMBH, PRIGEST, S.A., TOCQUEVILLE FINANCE, S.A., ROSENBAUM PARTNERS, L.P., ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, RUTH PEARSON TRUST, DEKA INTERNATIONAL (IRELAND) LIMITED, DEKA INTERNATIONAL S.A. LUXEMBURG, DEKA FUNDMASTER INVESTMENTGESELLSCHAFT MBH, FIDEURAM INVESTIMENTI S.G.R., FIDEURAM GESTIONS S.A., INTERFUND SICA V., FRANKFURT-TRUST INVESTMENT-GESELLSCHAFT MBH, FRANKFURT-TRUST INVEST LUXEMBURG AG, HELABA INVEST KAPITALANLAGEGESELLSCHAFT MBH, HSBC TRINKAUS & BURKHARDT AG, INTERNATIONALE KAPITALANLAGEGESELLSCHAFT MBH, MEAG MUNICH ERGO KAPITALANLAGEGESELLSCFHAFT MBH, MEAG MUNICH ERGO ASSET MANAGEMENT GMBH, METZLER INVESTMENT GMBH, METZLER IRELAND LTD, NORDCON INVESTMENT MANAGEMENT AG, NORGES BANK, SWISS LIFE HOLDING AG, SWISS LIFE INVESTMENT MANAGEMENT HOLDING AG, SWISS LIFE ASSET MANAGEMENT AG, SWISS LIFE FUNDS AG, SWISS LIFE (BELGIUM) S.A., SWISS LIFE ASSET MANAGEMENT GMBH, SWISS LIFE ASSET MANAGEMENT (NEDERLAN) B. V., TREDJE AP-FONDEN, WESTLB MELLON ASSET MANAGEMENT KAPITALANLAGEGESELLSCHAFT MBH, ALECTA PENSIONSFORSAKRING, OMSESIDIGT, SJUNDE AP-FONDEN, VARMA MUTUAL PENSION INSURANCE COMPANY, DANSKE INVEST ADMINISTRATION A/S, AFA LIVFORSAKRINGSAKTIEBOLAG, AFA TRYGGHETSFORSAKRINGSAKTIEBOLAG, AFA SJUKFORSAKRINGSAKTIEBOLAG, AMF PENSION FONDFORVALTNING AB, ARBETSMARKNADSFORSAKRINGAR, PENSIONSFORSAKRINGSAKTIEBOLAG, PENSIONSKASSERNES ADMINISTRATION A/S, ARBEJDSMARKEDETS TILLAEGSPENSION, INDUSTRIENS PENSIONSSFORIKRING A/S, ARCA SGR, S.P.A., ILMARINEN MUTUAL PENSION INSURANCE COMPANY, PRIMA SOCIETA' DI GESTIONE DEL RISPARMIO S.P.A., NORDEA INVEST FUND MANAGEMENT A/S, NORDEA FONDER AB, NORDEA INVESTMENT FUNDS COMPANY I.S.A., NORDEA FONDENE NORGE AS, NORDEA FONDBOLAG FINLAND AB, SWEDBANK ROBUR FONDER AB, FJARDE AP-FONDEN, OLIVIER CHASTAN, REED S. CLARK, DAHA DAVIS, COLLEN DODI, RUTH PEARSON TRUST PEARSON TRUSTEE, EDWARD B. BRUNSWICK, MICHAEL DONIGER, ALISON DONIGER, GRANDCHILDREN'S TRUST BY BRUCE DONIGER TRUSTEE, BRUCE DONIGER, BEATRICE DONIGER, JEFFREY KURTZ, PRICE HAL, W. SCOTT POLLAND, JR., NICHOLAS A. RADOSEVICH, CAISSE DE DEPOT ET PLACEMENT DU QUEBEC, AGF ASSET MANAGEMENT, S.A., IRISH LIFE INVESTMENT MANAGERS LIMITED, Plaintiffs-Appellees,

BRUCE DONIGER, GERARD MOREL, OLIVER M. GERARD, THE RETIREMENT SYSTEM FOR GENERAL EMPLOYEES OF THE CITY OF MIAMI BEACH, Plaintiffs-Appellees-Cross-Appellants,

WILLIAM CAVANAGH, Cross-Appellant,

v.

VIVENDI, S.A., Defendant-Appellant-Cross-Appellee,

JEAN-MARIE MESSIER, GUILLAUME HANNEZO, VIVENDI UNIVERSAL, Defendants

Nos. 15-180-cv(L), 15-208-cv(XAP)

United States Court of Appeals, Second Circuit

September 27, 2016

Argued March 3, 2016

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JEFFREY A. LAMKEN, Molo Lamken LLP, Washington, D.C. (Robert K. Kry, Lauren M. Weinstein, Molo Lamken LLP, Washington, D.C.; Arthur N. Abbey, Stephen T. Rodd, Jeremy Nash, Abbey Spanier, LLP, New York, N.Y.; Matthew Gluck, Michael C. Spencer, Milberg LLP, New York, N.Y.; Brian C. Kerr, Brower Piven, P.C., New York, N.Y., on the brief), for Plaintiffs-Appellees-Cross-Appellants.

MIGUEL A. ESTRADA, Gibson, Dunn & Crutcher, LLP (Mark A. Perry, Lucas C. Townsend, Gibson, Dunn & Crutcher LLP, Washington, D.C.; Caitlin J. Halligan, Gibson, Dunn & Crutcher LLP, New York, N.Y.; Daniel Slifkin, Timothy G. Cameron, Cravath, Swaine & Moore LLP, New York, N.Y.; James W. Quinn, Gregory Silbert, Weil, Gotshal & Manges LLP, New York, N.Y., on the brief), for Defendant-Appellant-Cross-Appellee.

Before: CABRANES, LIVINGSTON, AND LYNCH, Circuit Judges.

OPINION

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Debra Ann Livingston, Circuit Judge

Prior to 1998, Compagnie Gé né rale des Eaux was a French utilities company, best known for supplying water to households across France. By the close of 2000, that same company, now touting the name Vivendi Universal, S.A. (" Vivendi" ), was a global media conglomerate with extensive dealings in the film, music, telecommunications, publishing, and Internet industries, among related others. What followed on the heels of Defendant-Appellant-Cross-Appellee Vivendi's seemingly overnight transformation gives rise to the securities-fraud allegations now at issue.

To pull off its transformation and buttress its position as a mover-and-shaker in the global media-and-telecommunications market, Vivendi spent much of 2000 and 2001 acquiring a diverse array of media and communications businesses in the United States and abroad. Naturally, these acquisitions required money, and Vivendi did not have an unlimited supply. By 2001 and especially by 2002, Vivendi was running critically low. Indeed, Vivendi was in danger of not being able to meet all of its various payment obligations, including payments on loans it had taken out for the very purpose of financing its buying spree. In the worst case scenario, which inquiries later revealed was not an altogether unlikely one, Vivendi was months away from bankruptcy or insolvency. Yet, up until approximately July 2002, Vivendi made numerous representations to the market suggesting that the course ahead for the company was smooth sailing. That all came to a halt when Vivendi's stock price came tumbling down in the middle of 2002, after a series of credit downgrades and revelations that Vivendi was strapped for cash.

In a class-action suit they initiated against Vivendi in 2002, Plaintiffs-Appellees and Plaintiffs-Appellees-Cross-Appellants (collectively, " Plaintiffs" ), investors in Vivendi's stock during the relevant time period, alleged that Vivendi's persistently optimistic representations during the period from October 30, 2000 to August 14, 2002, constituted securities fraud under § 10(b) of the Securities Exchange Act of 1934 (" Exchange Act" ), 15 U.S.C. § 78j(b), as well as the Securities Exchange Commission's (" SEC" ) Rule 10b-5 (" Rule 10b-5" ) promulgated thereunder, 17 C.F.R. § 240.10b-5. Vivendi now appeals from a December 22, 2014 partial final judgment of the United States District Court for the Southern District of New York (Scheindlin, J. ),2 following a three-month jury trial that started in late 2009 and resulted in a jury verdict finding Vivendi liable for securities fraud under § 10(b) and Rule 10b-5.

We affirm as to Vivendi's claims on appeal, concluding as follows:

(1) Plaintiffs relied on specifically identified false or misleading statements at trial and thus, contrary to Vivendi's argument

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on appeal, did not fail to present an actionable claim of securities fraud by " eliminat[ing] the foundational element of . . . a specific false or misleading statement," Vivendi Br. 41;

(2) Vivendi's claim that certain statements constituted non-actionable statements of opinion is not preserved for appellate review;

(3) Vivendi's claims that certain statements constituted non-actionable puffery and that others fall under the Private Securities Law Reform Act's (" PSLRA" ) safe harbor provision for " forward-looking statements," see 15 U.S.C. § 78u-5(c), is without merit;

(4) the evidence was sufficient to support the jury's determination that the fifty-six statements at issue here were materially false or misleading with respect to Vivendi's liquidity risk;

(5) the district court did not abuse its discretion in admitting the testimony of Plaintiffs' expert, Dr. Blaine Nye (" Nye" ); and

(6) the evidence was sufficient to support the jury's finding as to loss...

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