Dell Pays $40 Million to Settle Securities Fraud Class Action -- After Case Was Dismissed

Dell Pays $40 Million to Settle Securities Fraud Class Action -- After Case Was Dismissed - 12-8-2009

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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

SETTLEMENT NEWS:

Dell Pays $40 Million to Settle Securities Fraud Class Action -- After Case Was Dismissed
Alison Frankel

The American Lawyer. December 8, 2009
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EXCERPT: Every once in a while we're reminded that winning a motion to dismiss doesn't mean you've won the case. Just ask Dell's lawyers at Jones Day and Yetter, Warden & Coleman. A month after asking the 5th U.S. Circuit Court of Appeals to affirm the dismissal of a 2007 securities class action, Dell agreed to settle the case for $40 million. […] The timing of the settlement, as LaCroix notes, raises obvious questions about how Dell thought the 5th Circuit would rule -- and based on what the shareholders' lawyers told us about oral arguments, Dell had good reason to worry the case would be revived. In October 2008, Austin federal district court Judge Sam Sparks tossed the shareholders' case with prejudice, finding that the plaintiffs' consolidated complaint (pdf) -- despite being 304 pages! -- fell short in establishing scienter and loss causation (pdf). The plaintiffs appealed. Oral arguments took place in New Orleans on Sept. 1, with Gregory Coleman of Yetter Warden arguing for Dell and Gregg Levin of Motley Rice and Geoffrey Jarvis of Grant & Eisenhofer arguing for the shareholders. Within weeks -- and before the 5th Circuit ruled -- Dell and the plaintiffs filed a joint motion (pdf) to stay the appeal as they negotiated a settlement. The two sides told the appellate court they'd reached a deal in a Nov. 25 joint motion. Dell disclosed the amount of the settlement in a 10-Q last week. So was the company concerned about the outcome at the 5th Circuit? We didn't hear back from Dell's lead counsel, Patricia Villareal of Jones Day, or appellate counsel Coleman of Yetter Warden. Company spokesperson Jess Blackburn sent us an e-mail statement that said the appeal was one factor Dell considered.

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