Inadmissible - 2/23/2009

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2009 News and Press Releases

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News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

DISMISSAL NEWS:

Inadmissible, Ultimate Sanction
Charles Toutant, Henry Gottlieb, Michael Booth and Mary Pat Gallagher

New Jersey Law Journal. February 23, 2009
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It's not often that a court punishes litigants by throwing out a complaint. But that's what U.S. District Judge Stanley Chesler did last Tuesday when he dismissed Del Guidice v. S.A.C. Capital Management, a securities fraud class action, as a Rule 11 sanction against the lead plaintiff and his lawyers. The complaint, filed by Thomas Gentile, of Lampf Lipkind Prupis & Petigrow in West Orange, was based on documents obtained under a protective order in a Southern District of New York lawsuit. And an amended complaint filed by lead counsel William Federman, of Federman & Sherwood of Oklahoma City, and liaison counsel, Evan Smith of Brodsky & Smith in Bala Cynwyd, Pa., was similarly tainted. Chesler said he sanctioned Federman and Smith for not doing a reasonable, independent investigation of the basis for the allegations and for filing the amended complaint knowing it was based on documents subject to a protective order. Gentile, also at fault, was not sanctioned because he was not in a position to respond to the Rule 11 notice by withdrawing the amended complaint. Federman says the documents he relied on were in the public domain because they had also been used as the basis for a state court racketeering action in New Jersey and no one had questioned their authenticity. He has not decided whether to appeal but says the majority of courts permit reliance on public documents.

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