Filed: Apr. 07, 2010
Latest Update: Mar. 02, 2020
Summary: 09-3487-cv Vladimir v. Bioenvision, Inc. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER R ULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT . C ITATION TO A SUMMARY ORDER FILED ON OR AFTER J ANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY F EDERAL R ULE OF A PPELLATE P ROCEDURE 32.1 AND THIS COURT ’ S L OCAL R ULE 32.1.1. W HEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT , A PARTY MUST CITE EITHER THE F EDERAL A PPENDIX OR AN ELECTRONIC DATABASE ( WITH T
Summary: 09-3487-cv Vladimir v. Bioenvision, Inc. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER R ULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT . C ITATION TO A SUMMARY ORDER FILED ON OR AFTER J ANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY F EDERAL R ULE OF A PPELLATE P ROCEDURE 32.1 AND THIS COURT ’ S L OCAL R ULE 32.1.1. W HEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT , A PARTY MUST CITE EITHER THE F EDERAL A PPENDIX OR AN ELECTRONIC DATABASE ( WITH TH..
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09-3487-cv
Vladimir v. Bioenvision, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
R ULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT . C ITATION TO A SUMMARY ORDER FILED ON OR AFTER J ANUARY 1,
2007, IS PERMITTED AND IS GOVERNED BY F EDERAL R ULE OF A PPELLATE P ROCEDURE 32.1 AND THIS COURT ’ S L OCAL R ULE 32.1.1.
W HEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT , A PARTY MUST CITE EITHER THE F EDERAL A PPENDIX OR AN
ELECTRONIC DATABASE ( WITH THE NOTATION “ SUMMARY ORDER ”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL .
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Daniel Patrick Moynihan
3 United States Courthouse, 500 Pearl Street, in the City of
4 New York, on the 7 th day of April, two thousand and ten.
5
6 PRESENT: PIERRE N. LEVAL,
7 ROBERT D. SACK,
8 RICHARD C. WESLEY,
9 Circuit Judges.
10
11
12 GARY THESLING and DONALD JOHNSON,
13
14 Plaintiffs,
15
16 BERT VLADIMIR, individually and on behalf
17 of all others similarly situated,
18
19 Plaintiff-Appellant,
20
21 -v.- 09-3487-cv
22
23 BIOENVISION, INC., CHRISTOPHER B. WOOD,
24 JAMES S. SCIBETTA, JOSEPH P. COOPER,
25 STEVEN A. ELMS, MICHAEL G. KAUFFMAN, and
26 ANDREW SCHIFF,
27
28 Defendants-Appellees,
29
30 PERSEUS-SOROS BIOPHARMACEUTICAL FUND, LP,
31
32 Defendant.
33
1 FOR APPELLANT: LEE SQUITIERI, Squitieri & Fearon,
2 LLP, New York, NY.
3
4 FOR APPELLEES: JOHN D. DONOVAN, JR. (Christopher G.
5 Green, C. Thomas Brown, and Amy D.
6 Roy, on the brief), Ropes & Gray
7 LLP, Boston MA.
8
9 Appeal from the United States District Court for the
10 Southern District of New York (Stein, J.).
11
12 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
13 AND DECREED that the judgment of the United States District
14 Court for the Southern District of New York be AFFIRMED.
15 Plaintiff-appellant Bert Vladimir (“plaintiff”), lead
16 plaintiff in this securities fraud class action, appeals
17 from the dismissal of his claims against defendants-
18 appellees pursuant to sections 10(b) and 20(a) of the
19 Securities Exchange Act of 1934. 15 U.S.C. §§ 78j(b),
20 78t(a). 1 We assume the parties’ familiarity with the facts,
21 procedural history, and issues on appeal.
22 In the Supplemental Amended Class Action Complaint,
23 plaintiff alleged that one or more defendants made seven
24 statements between February and May 2007 that were rendered
25 materially misleading by defendants’ failure to disclose
1
Plaintiff also brought claims against Perseus-Soros
Biopharmaceutical Fund, LP (“Perseus-Soros”) pursuant to
sections 10(b), 13(d), and 20(a) of the Securities Exchange
Act of 1934. 15 U.S.C. §§ 78j(b), 78m(d), 78t(a). The
district court dismissed these claims as well, plaintiff
does not challenge those decisions, and Perseus-Soros is not
a party to this appeal.
1 that defendant Bioenvision, Inc. was engaged in merger
2 negotiations with non-party Genzyme Corporation. 2 The
3 district court examined each of the challenged statements
4 individually and concluded that the allegations were
5 deficient for at least one — and sometimes both — of two
6 reasons. First, with respect to several of the statements,
7 the court concluded that plaintiff had not identified any
8 legal duty that required defendants to disclose the omitted
9 information relating to the merger negotiations. Second,
10 the court also concluded that certain of plaintiff’s
11 allegations failed to meet the particularity requirements of
12 the Private Securities Litigation Reform Act of 1995, 15
13 U.S.C. § 78u-4(b), and Rule 9(b) of the Federal Rules of
14 Civil Procedure. For the reasons set forth below, we find
15 the first basis relied on by the district court to be
16 sufficient to sustain the dismissal of the claims against
17 defendants-appellees that are at issue in this appeal.
18 In order to state claims pursuant to section 10(b) of
2
Relying on allegations from a separate state court
action, plaintiff also alleged that defendants unlawfully
failed to disclose a January 2007 “secret[]” merger
agreement between Genzyme Corporation and agents of Perseus-
Soros, the controlling shareholder of Bioenvision. The
district court dismissed plaintiff’s claims based on this
allegation, and plaintiff has not challenged that conclusion
in this appeal. Therefore, we deem this aspect of the
claims in the Supplemental Class Action Complaint to have
been abandoned. See Norton v. Sam’s Club, 145 F.3d 114, 117
(2d Cir. 1998).
1 the Exchange Act and Rule 10b-5 promulgated thereunder, a
2 plaintiff must allege, inter alia, that the defendant
3 engaged in a material misrepresentation or omission.
4 Operating Local 649 Annuity Trust Fund v. Smith Barney Fund
5 Mgmt. LLC, 595 F.3d 86, 92 (2d Cir. 2010). In this case,
6 plaintiff’s legal theory is based on alleged omissions
7 rather than misrepresentations. “For an omission to be
8 actionable, the securities laws must impose a duty to
9 disclose the omitted information.” Resnik v. Swartz, 303
10 F.3d 147, 154 (2d Cir. 2002). With respect to defendants-
11 appellees, who are not alleged to have traded in
12 Bioenvision’s securities, such a duty may arise either: (1)
13 expressly pursuant to an independent statute or regulation;
14 or (2) as a result of the ongoing duty to avoid rendering
15 existing statements misleading by failing to disclose
16 material facts, see 17 C.F.R. § 240.10b-5(b).
17 Thus, it is by now axiomatic that “a corporation is not
18 required to disclose a fact merely because a reasonable
19 investor would very much like to know that fact.” In re
20 Time Warner Inc. Sec. Litig.,
9 F.3d 259, 267 (2d Cir.
21 1993). As the district court correctly observed, however,
22 no express duty requires the disclosure of merger
23 negotiations, as opposed to a definitive merger agreement.
24 Moreover, “[s]ilence, absent a duty to disclose, is not
1 misleading . . . .” Basic Inc. v. Levinson,
485 U.S. 224,
2 239 n.17 (1988). For substantially similar reasons to those
3 stated by the district court, we hold that plaintiff has not
4 identified any part of the seven challenged statements that
5 were rendered materially misleading by the alleged omissions
6 relating to Bioenvision’s merger negotiations. 3 This
7 pleading deficiency is sufficient to warrant the affirmance
8 of the entire portion of the district court’s decision that
9 is challenged in this appeal, including the dismissal of
10 plaintiff’s claims against defendants-appellees for control-
11 person liability. See ATSI Commc’ns, Inc. v. Shaar Fund,
12 Ltd.,
493 F.3d 87, 108 (2d Cir. 2007).
13 We have considered each of plaintiff’s arguments and
14 find them to be without merit. Accordingly, the judgment of
15 the district court is hereby AFFIRMED.
16
17 FOR THE COURT:
18 Catherine O’Hagan Wolfe, Clerk
19
20
21
3
Although the district court did not reach this
conclusion with respect to each of the seven statements
relied on by plaintiff, we may affirm on any basis supported
by the record. E.g., Thyroff v. Nationwide Mut. Ins. Co.,
460 F.3d 400, 405 (2d Cir. 2006). We find that to be the
appropriate course here and, in light of our holding, do not
reach the merits of the district court’s particularity
analysis.
5
