Do people who bought stock at, say, $75 a share and who sell it at, oh, $80 per deserve our concern? Even if the company whose shares rose in value lied about something important, causing the price to dip before recovering?
The Seventh Circuit today said ix-nay on the orry-way but did it in terms of whether the district court abused its discretion in dismissing the securities fraud complaint "with prejudice". No, the panel ruled. Fannon v. Guidant Corp., No. 08-2429 (7th Cir. Oct. 21, 2009).
But what strikes Blawgletter as interesting — a low hurdle, we admit — arises from how the court explained why a dismissal with prejudice fell within the district court's discretion. Because the trial judge "gave the plaintiffs about a year to review and investigate the case, and then to file a consolidated complaint", id., slip op. at 11, "[t]he district court was entitled to view this case as one in which the plaintiffs had, as a practical matter, a number of opportunities to craft a complaint that complied with the standards of the PSLRA", id. at 12-13. "It was therefore entitled to bring this litigation to a close with a dismissal with prejudice." Id. at 13.
So: "about a year to review and investigate the case" — without discovery! — makes dismissal with prejudice an okay thing.