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Court Tightens Requirement When Suing for Stock Fraud

Requiring stricter pleading of plaintiffs, a federal appeals court has ruled that complaints for securities fraud must trace stock purchases to specific false or misleading statements.

In the recent case In Re: Ariad Pharmaceuticals, Inc. Securities Litigation, the First Circuit held that plaintiffs cannot satisfy their pleading burden by "general allegations" when their purchases were traceable to fraudulent registrations under Section 11 of the Securities Act. When stock has been issued in multiple offerings, a plaintiff must plead that his or her shares were issued under a specific false or misleading registration statement.

According to the panel, a "general allegation that a plaintiff's shares are traceable to the offering in question is nothing more than a 'formulaic recitation' of that element."

Bad Review? Removing It Is More Complicated Than You'd Think

Do you own the copyright to posts that flame you? And if so, is it proper to use your ownership of those flame posts to have them removed from ISPs? Can you?

These and others are the issues at the center of a debate that has been roiling around in the courts for some time. Are defamed professionals allowed to own the comments that malign them? The First Circuit will chime in on this issue when it decides who owns the user comments in Ripoff Report reviews.

The First Circuit tossed out most of a lawsuit against the biotech company Genzyme last week. Genzyme is the sole producer of Fabrazyme, the only treatment for Fabry disease, a rare, deadly genetic disorder. Facing a shortage of the drug due to production complications, Genzyme instituted a rationing plan, giving patents a reduced dosage of the medicine they needed to survive -- until the supply dried up entirely.

Patients who needed Fabrazyme to avoid vision and hearing loss, stroke, and even death sued Genzyme, alleging everything from statutory violations to breaches of contract to loss of consortium. But, the First Circuit ruled this week, all but one of those patients lacked standing to sue.

Jerk.com Ruling Affirmed By 1st Cir. More to Come?

There's some grumbling out there about what a jerk Napster's John Fanning was to create jerk.com, a now-defunct website that asked users to rate whether a stranger was a jerk or not. But those same persons may be cheering a little inside knowing that Fanning lost a bid to undo an FTC suit against him in the First Circuit, on the grounds that he was personally liable for materially misrepresentations made on the site.

It's still a dark age we live in, though -- persons can still "Yelp" other persons. Are similar lawsuits ahead?

Maker of Weight Loss Pill Survives Appeal

The weight-loss pill maker Wyeth, LLC will survive an appeal to review jury's favorable verdict for defendant. The First Circuit court found with regards to the plaintiff's negligent design claim, he'd failed some other less dangerous weight loss pill design.

The interesting thing about this case is that it makes it clear that Massachusetts will not hear cases of negligent design unless the plaintiff offers a reasonable alternative. For a weight-loss pill that allegedly causes hypertension? Good luck.

Medical Battery Claim Dismissed by 1st Circuit

The Court of Appeals for the First Circuit affirmed a lower court's dismissal of a battery claim against a doctor who allegedly failed to properly inform his patient of the attendant risks of a surgical procedure.

The case of Bradley v. Sugarbaker has a number of legal issues within it, but we'll focus on the plaintiff's theory of battery against the operating doctor.

1st Circuit Court Dismisses Defamation Lawsuit Against Newsletter

The trouble began when Pan Am Railway Co. together with its former president, David Fink, sued Atlantic Northeast Rails and Ports in U.S. District Court in 2011. In Fink's complaint, he alleged that ANRP damaged his company by distributing defamatory articles via electronic and email newsletters.

Defendant Chalmers Hardenbergh responded with the legal equivalent of "so what?" and "don't shoot the messenger."

The parents of a young boy injured during birth lost their appeal to the First Circuit last Friday, largely due to lack of evidence to support their claims.

When F.A.F.R. was born, his shoulders failed to deliver after his head emerged, resulting in Erb's Palsy, which causes weakness and loss of motion in the arms. His parents sued in federal court in Puerto Rico and the jury found that both the delivering doctor, Dr. Capre-Febus, and the hospital, Dorado Health, had been negligent, yet only the doctor's negligence had caused F.A.F.R.'s injuries.

1st Cir. Rejects Speculative Harm Caused by Potential Lightning Strike

Does a person have standing to claim a product defect because of an increased risk of harm from a product's vulnerability to lightning strikes?

Maybe. The First Circuit Court of Appeals concluded that such scenario could give rise to standing, but in the case of Tim Kerin and his lawsuit against the Titeflex Corporation, the court said that, regardless, Kerin hadn't met his burden of alleging sufficient facts to show probable future injury.

1st Cir. Kicks Inmate Suicide Attempt Case; SCOTUS Appeal Pending

Back in August, the First Circuit decided Penn v. Escorsio, an arguably obvious case where qualified immunity was denied to prison guards who knew about an inmate's suicide risks, ignored his very vocal threats to do exactly that, then found him strung up in his cell. The inmate, Matthew Lalli, suffered severe brain damage and will require $9 million in care, according to his mother, who brought suit on his behalf.

Now, despite plans to appeal the First Circuit's ruling to the U.S. Supreme Court, the case itself will return to the district court and be scheduled for trial, as the First Circuit denied a request to hold the case pending further appeal, reports the Bangor Daily News.