Best Buy Class Decertified by the 8th Circuit
A class of consumers led by the pension fund IBEW got effectively de-classed by the Eighth Circuit when it ruled that the lower court had abused its discretion in certifying that a class held together by common issues.
The decertification is a major victory for Best Buy as it will mean that cases will most likely have to be brought individually -- if at all.
Earnings Are "on Track"
The controversy first began back in 2010 when IBEW and consumers sued Best Buy and its executives for statements the executives made in September of 2010. At that time, Best Buy issued a press release and a conference call which carried this basic message: Best Buy was "on track" to deliver $3.50-$3.70 per share for 2011.
But a few months later in December, the company's quarterly earnings did not yen with their earlier message. Earnings were "lower than expected." There was a concomitant drop in prices down to a trading range of $3.20-$3.40.
District Opinion: Not Actionable
The district court regarded the conference call and the press release as two separate issues ripe for 10(b)-5 analysis.
The lower court judge determined that with regards to the press release, the statements were not actionable under 10(b)-5 because the statements were "forward looking" and were sufficiently accompanied with cautionary language. But the district granted certification at least to the conference call.
The circuit felt that the lower court had abused its discretion as to the certification taking into account the totality of the evidence presented. In fact, the court said, the "inflated price" of Best Buy's stock in the months before its eventual fall were actually the result of the "non-fraudulent" press release (as determined by the lower court) and not the conference call.
- Hearsay Sinks Meat Packer's Counterclaim Against Distributor (FindLaw's U.S. Eighth Circuit Blog)
- 8th Circuit Rules for Employees in Jimmy John's NLRA Case (FindLaw's U.S. Eighth Circuit Blog)
- 8th Circuit Rules on Another NLRB Employee vs. Contractor Case (FindLaw's U.S. Eighth Circuit Blog)
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.