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(Article from Securities Law Alert, August 2018) 

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On July 11, 2018, Magistrate Judge Franklin Noel of the District of Minnesota denied plaintiffs’ request to file an amended class action complaint in a long-pending securities fraud action against a major electronics retailer.[1] IBEW Local 98 Pension Fund v. Best Buy Co., 2018 WL 3377175 (D. Minn. 2018) (Best Buy IV). Plaintiffs sought the court’s leave to plead additional alleged misstatements from a press release that the court had previously deemed protected by appropriate cautionary language under the safe harbor provision of the Private Securities Litigation Reform Act (“PSLRA.”) The Best Buy IV court held that plaintiffs’ “attempt to present a different portion of the [same] press release countervail[ed] the law of the case doctrine.” The court explained that “[t]he cautionary language was issued in tandem with the entire press release, not merely excerpts of it.”

The Best Buy IV court also found meritless plaintiffs’ contention that the proposed amended complaint would be sufficient to merit class certification with respect to alleged misstatements made during a September 14, 2010 conference call, which were the only statements that the court had found actionable under the securities laws. The court explained that “the issue of class certification” as to these alleged misstatements had already “been exhaustively litigated.” The Eighth Circuit had previously reversed the court’s order granting class certification based on its determination that the statements made during the September 14, 2010, conference call had no price impact; the district court subsequently denied plaintiffs’ request to file a new motion for class certification.[2] The Best Buy IV court found no “clear error or manifest injustice in these holdings,” and explained that it would be inappropriate “to permit amendment based on an issue competently decided by the Eighth Circuit and District Court.” The Best Buy IV court held that  “[a]fter seven years of litigation . . . this case must now proceed as an individual action based” solely on the statements made during the September 14, 2010, conference call. Plaintiffs have filed an objection to the decision with the district court judge presiding over the case.