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Wednesday, October 21, 2009

Ind. Decisions - 7th Circuit decides one Indiana case today

In Fannon v. Guidant Corp. (SD Ind., Judge Barker), a 17-page opinion, Judge Wood writes:

This case involves the claims of a plaintiff class that believes the defendant corporation defrauded them. The class asserts that the corporation knew that it had flawed products, but in the face of that knowledge made false or misleading public statements about the products and about a pending merger. In addition, the plaintiffs charge, the individual defendants sold nearly $89 million in company stock during the period covered by the class’s allegations. The district court dismissed the case on the pleadings with prejudice, concluding that the class complaint failed to raise the strong inference of scienter required by the Private Securities Litigation Reform Act (“PSLRA”) and Rule 9 of the Federal Rules of Civil Procedure. The court also rejected the plaintiffs’ motion under FED. R. CIV. P. 59(e) to reconsider based on newly discovered evidence, and their related motion under FED. R. CIV. P. 15(a) to amend their complaint. * * *

On appeal, the plaintiffs have limited themselves to three principal arguments: first, that the district court abused its discretion by immediately dismissing their first consolidated complaint with prejudice (rather than without prejudice, so that the plaintiffs could try again to submit a legally sufficient pleading); second, that the court abused its discretion when it denied their motion for leave to amend their complaint; and finally, that it abused its discretion by denying their motion under Rule 59(e) to reconsider its dismissal. Notably, the plaintiffs have not urged us directly to review the district court’s assessment of the legal sufficiency of their complaint, and so we do not have any issue before us that we review de novo and we need not again consider the standards for pleading a securities fraud case. Instead, each of the rulings before us is one that lies within the district court’s discretion, and our review is deferential. With that in mind, we conclude that the district court did not abuse its discretion, and we therefore affirm its judgment. * * *

We prefer not to concern ourselves with waiver, as it makes no difference to the outcome. The entry of a final judgment under Rule 58 is a watershed point in any litigation. Rule 15(a) is silent about any period after final judgment. But there are two rules of civil procedure that expressly address this phase of the suit: Rule 59 and Rule 60. Those rules logically affect all the rest of the rules directed to proceedings in the district courts. The district court correctly assessed whether the plaintiffs were entitled under the standards of Rule 59(e) to have the judgment altered or amended. As we said in Hecker, “[o]nce judgment has been entered, there is a presumption that the case is finished, and the burden is on the party who wants to upset that judgment to show the court that there is good reason to set it aside.” 556 F.3d at 591. The plaintiffs here did not meet that burden.

We AFFIRM the judgment of the district court.

Posted by Marcia Oddi on October 21, 2009 11:10 AM
Posted to Ind. (7th Cir.) Decisions