In re Vivendi Universal, S.A., Sec. Litig., No. 02 Civ. 5571(RJH), 07 Civ. 5742

• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
• Writing for the Court: RICHARD J. HOLWELL
• Citation: 842 F.Supp.2d 522
• Parties: In re VIVENDI UNIVERSAL, S.A., SECURITIES LITIGATION.
• Decision Date: 27 January 2012
• Docket Number: 09 Civ. 2603,07 Civ. 11305,07 Civ. 9229,08 Civ. 1938,07 Civ. 7370,08 Civ. 1983,No. 02 Civ. 5571(RJH), 07 Civ. 5742,07 Civ. 10578,07 Civ. 10954,07 Civ. 7775,08 Civ. 418,07 Civ. 11628,07 Civ. 11483,08 Civ. 1985,07 Civ. 11092,08 Civ. 24,07 Civ. 8208,08 Civ. 1975,08 Civ. 950,07 Civ. 9593,07 Civ. 7803,07 Civ. 7778,07 Civ. 8830,07 Civ. 10995,07 Civ. 8156,07 Civ. 7863,08 Civ. 1973,08 Civ. 2592,07 Civ. 7779,08 Civ. 1974,08 Civ. 116,09 Civ. 2611.,09 Civ. 2568,08 Civ. 1111,07 Civ. 11484,07 Civ. 7776,08 Civ. 117,07 Civ. 11485

842 F.Supp.2d 522

In re VIVENDI UNIVERSAL, S.A., SECURITIES LITIGATION.

No. 02 Civ. 5571(RJH), 07 Civ. 5742, 07 Civ. 7775, 07 Civ. 7778, 07 Civ. 7803, 07 Civ. 8156, 07 Civ. 8830, 07 Civ. 9593, 07 Civ. 10954, 07 Civ. 11092, 07 Civ. 11483, 07 Civ. 11485, 08 Civ. 24, 08 Civ. 117, 08 Civ. 950, 08 Civ. 1938, 08 Civ. 1974, 08 Civ. 1983, 09 Civ. 2568, 09 Civ. 2603, 07 Civ. 7370, 07 Civ. 7776, 07 Civ. 7779, 07 Civ. 7863, 07 Civ. 7863, 07 Civ. 8208, 07 Civ. 9229, 07 Civ. 10578, 07 Civ. 10995, 07 Civ. 11305, 07 Civ. 11484, 07 Civ. 11628, 08 Civ. 116, 08 Civ. 418, 08 Civ. 1111, 08 Civ. 1973, 08 Civ. 1975, 08 Civ. 1985, 08 Civ. 2592, 09 Civ. 2611.

United States District Court,
S.D. New York.

Jan. 27, 2012.

[842 F.Supp.2d 524]

Milberg Weiss Bershad Hynes & Lerach, Milberg Weiss & Bershad LLP, Sol Schreiber, Milberg LLP, Arthur N. Abbey, Richard Barry Margolies, Abbey Spanier Rodd Abrams & Paradis, LLP, Brian C. Kerr, Brower Piven, A Professional Corporation, Eric James Belfi, Javier Bleichmar, Lawrence Alan Sucharow, Labaton Sucharow, LLP, Leslie Margaret Kelleher, Caplin & Drysdale, Chartered, New York, NY, Corey D. Holzer, Holzer Holzer & Cannon LLC, Christine M. MacKintosh, Grand & Eisenhofer P.A., Atlanta, GA, James Stuart Notis, Gardy & Notis, LLP, Englewood Cliffs, NJ, Stuart M. Grant, Grant & Eisenhofer, PA, Wilmington, DE, Joseph F. Rice, Motley Rice LLC, Mount Pleasant, SC, Michael Edward Elsner, William H. Narwold, Motley Rice LLC, Hartford, CT, Nathan D. Finch, Motley Rice LLC, Washington, DC, for Vivendi Universal, S.A., Securities Litigation.

MEMORANDUM OPINION & ORDER
RICHARD J. HOLWELL, District Judge:

Before the Court is the defendants' motion for partial judgment on the pleadings, pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, filed on August 22, 2011. For the reasons stated herein, the defendant's motion is GRANTED.

BACKGROUND

On March 22, 2007, pursuant to Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure, the Court granted in part a motion to certify a class “consisting of all persons from the United States, France, England, and the Netherlands who purchased or otherwise acquired ordinary shares or American Depository Shares [ (“ADS”) ] of Vivendi Universal, S.A. [ (“Vivendi” or “Company”) ]....”

[842 F.Supp.2d 525]

In re Vivendi Universal, S.A. Sec. Litig., 242 F.R.D. 76, 109 (S.D.N.Y.2007) (“Vivendi I ”). The certified class (“Class Plaintiffs”) proceeded to litigate a class action (“Class Action”), resulting in a three-month-plus jury trial in this Court during late 2009 and early 2010. See In re Vivendi Universal, S.A. Sec. Litig., 765 F.Supp.2d 512, 523–24 (S.D.N.Y.2011) (“Vivendi II ”). Several months after class certification, individual Vivendi shareholders who were excluded from the class filed the first of thirty-five complaints in the Southern District of New York, and on July 7 and 8, 2009, the plaintiffs in the above-captioned cases (“Individual Plaintiffs”) filed four amended complaints (collectively, “Amended Complaints”)—the superseding and operative complaints at issue here. See Amended Compl. (“Allianz Compl.”), Allianz Global Investors v. Vivendi Universal, S.A., Nos. 07 Civ. 8156, 07 Civ. 9229, 08 Civ.1973, 08 Civ.1974, 08 Civ.1975 (S.D.N.Y. July 8, 2009); Amended Compl. (“AP Compl.”), Andra AP–Fonden v. Vivendi Universal, S.A., Nos. 07 Civ. 7370, 07 Civ. 7775, 07 Civ. 7776, 07 Civ. 7778, 07 Civ. 7779, 07 Civ. 7803, 07 Civ. 7863, 07 Civ. 8208, 07 Civ. 9593, 07 Civ. 11485, 08 Civ. 24, 08 Civ. 116, 08 Civ. 117, 08 Civ.1938, 08 Civ.1985 (S.D.N.Y. July 7, 2009); Amended Compl. (“B–W Compl.”), Baden–Württenbergische Investmentgesellschaft mbH v. Vivendi Universal, S.A., Nos. 02 Civ. 5571, 07 Civ. 8830, 07 Civ. 10578, 07 Civ. 10954, 07 Civ. 11628, 08 Civ. 950, 08 Civ. 1111, 08 Civ.1983 (S.D.N.Y. July 7, 2009); Amended Complaint (“Capitalia Compl.”), Capitalia Asset Mgmt. SGR, S.p.A. v. Vivendi Universal, S.A., Nos. 07 Civ. 5742, 07 Civ. 10995, 07 Civ. 11305, 07 Civ. 11483, 07 Civ. 11484, 08 Civ. 418 (S.D.N.Y. July 7, 2009).

The Individual Plaintiffs allege—asserting claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78j(b), 78t(a), and Rule 10b–5 promulgated thereunder, 17 C.F.R. § 240.10b–5, as well as claims pursuant Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77k(a), 77 l(a)(2), 77 o—that Vivendi, Jean–Marie Messier, and Guillaume Hannezo (collectively, “Defendants”) made materially false or misleading statements regarding Vivendi's financial health.¹ Specifically, the Amended Complaints contain assertions that these statements “had the purpose and effect of creating in the market an unrealistically positive assessment of Vivendi and its business, prospects and operations, thus causing the Company's securities to be overvalued and artificially inflated.” Allianz Compl. ¶ 262; AP Compl. ¶ 262; B–W Compl. ¶ 262; Capitalia Compl. ¶ 262. The Individual Plaintiffs further allege that they purchased or otherwise acquired ordinary shares of Vivendi between October 30, 2000, and August 14, 2002, and that Vivendi's ordinary shares traded on the EuroNext, S.A. (“Paris Bourse”), a foreign exchange.²See Allianz Compl. ¶¶ 13, 18, 45, 307; AP Compl. ¶¶ 13, 18, 45, 307; B–W Compl. ¶¶ 13, 18, 45, 307; Capitalia Compl. ¶¶ 13, 18, 45, 307; see also Individual Plaintiffs Who Purchased or Otherwise Acquired Vivendi

[842 F.Supp.2d 526]

Ordinary Shares, Exh. A to Decl. of Penny P. Reid in Supp. of Defs.' Mot. for Partial J. on the Pleadings (“Reid Decl.”) (Aug. 22, 2011) (ECF No. 1097–1).

On June 24, 2010, the Supreme Court issued its opinion in Morrison v. National Australia Bank Ltd., ––– U.S. ––––, 130 S.Ct. 2869, 177 L.Ed.2d 535 (2010). The Morrison Court “concluded that Section 10(b) [of the Exchange Act] does not apply extraterritorially,” Vivendi II, 765 F.Supp.2d at 526, and held that “Section 10(b) reaches the use of a manipulative or deceptive device or contrivance only in connection with the purchase or sale of a security listed on an American stock exchange, and the purchase or sale of any other security in the United States,” Morrison, 130 S.Ct. at 2888. On February 17, 2011, applying Morrison—which had upended Second Circuit precedent on the issue, see Vivendi II, 765 F.Supp.2d at 526–27—this Court dismissed the Section 10(b) claims brought by ordinary shareholders of Vivendi securities in the Class Action. See id. at 533–34.

It is the Supreme Court's Morrison opinion, and this Court's application of such in Vivendi II, upon which the Defendants moved the Court, through the instant motion, to enter partial judgment on the pleadings in their favor and to dismiss the Exchange Act claims of Individual Plaintiffs who purchased or otherwise acquired Vivendi ordinary shares. The Defendants filed their motion on August 22, 2011,³ and by an October 6 letter, they sought leave to amend the motion in order to seek partial judgment on the Individual Plaintiffs' claims under the Securities Act, on the same basis. The next day, the Individual Plaintiffs informed the Court that they had no objection to the Defendants' proposed amendment. Accordingly, the Court endorsed the Defendants' request and “deemed” the Defendants' motion “to cover [the Individual Plaintiffs'] claims under both the Securities Act ... and [the] Exchange Act....” Endorsed Letter to Court (“Endorsed Letter”) at 1 (Oct. 17, 2011) (ECF No. 1106). The Court shall refer to the claims at issue—claims brought under the Securities Act and the Exchange Act by the Individual Plaintiffs who purchased ordinary shares of Vivendi on the Paris Bourse—as the “Ordinary Share Claims.”

The motion being fully briefed, and neither party having requested oral argument, the Court now turns to its resolution.

LEGAL STANDARD

Rule 12(c) of the Federal Rules of Civil Procedure provides that “a party may move for judgment on the pleadings” anytime “[a]fter the pleadings are closed—but early enough not to delay trial.” Fed.R.Civ.P. 12(c). “In deciding a Rule 12(c) motion, [the Court] appl[ies] the same standard as that applicable to a motion under Rule 12(b)(6), accepting the allegations contained in the complaint as true and drawing all reasonable inferences in favor of the nonmoving party.” D'Alessio v. N.Y. Stock Exch., 258 F.3d 93, 99 (2d Cir.2001). The Court “may dismiss the complaint only if ‘it appears beyond doubt that the plaintiff can prove no set of facts

[842 F.Supp.2d 527]

in support of his claim which would entitle him to relief.’ ” Burnette v. Carothers, 192 F.3d 52, 56 (2d Cir.1999) (quoting Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)); accord Johnson v. Rowley, 569 F.3d 40, 44 (2d Cir.2009) (“To survive a Rule 12(c) motion, [the] complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” (internal quotation marks omitted)).

DISCUSSION I. Motion for Partial Judgment on the Pleadings
A. Governing Law

1. Exchange Act

To state a claim for relief pursuant to Section 10(b) and Rule 10b–5, “a plaintiff must allege...