Anwar et al v. Fairfield Greenwich Limited et al

Filing 1350

ENDORSED LETTER addressed to Judge Victor Marrero from Walter Rieman dated 12/2/2014 re: On behalf of the Citco Defendants, we are writing to respond to the portion of plaintiffs' letter dated November 20, 2014, that discusses the district court's decision in Osberg v. Foot Locker, Inc., No. 07-cv-1358 (KBF), 2014 WL 5800501 (S.D.N.Y. Nov. 7, 2014), petition for perm to app. under Fed. R. Civ. P. 23(f) filed, No. 14-3748(L), ECF No. 42 (2d Cir. Nov. 25, 2014). ENDORSEMENT: The Clerk of Court is directed to enter into the public record of this action the letter above submitted to the Court by Citgo defendants. (Signed by Judge Victor Marrero on 12/3/2014) (lmb)

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PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019-6064 UNIT 3601, OFFICE TOWER A, BEIJING FORTUNE PLAZA NO. 7 DONGSANHUAN ZHONGLU CHAOYANG DISTRICT BEIJING 100020 PEOPLE'S REPUBLIC OF CHINA TELEPHONE (212) 373-3000 LLOYD K. GARRISON (1946-1991) RANDOLPH E. PAUL (1946-1956) SIMON H. RIFKIND LOUIS S. WEISS JOHN F. WHARTON MATTHEW W. ABBOTT ALLAN J. ARFFA ROBERT A. ATKINS DAVID J. BALL JOHN F. BAUGHMAN LYNN B. BAYARD DANIEL J. BELLER CRAIG A. BENSON MITCHELL L BERG MARK S. BERGMAN BRUCE BIRENBOIM H CHRISTOPHER BOEHNING ANGELO BONVINO JAMES L. BROCHIN RICHARD J. BRONSTEIN DAVID W. BROWN SUSANNA M. BUERGEL PATRICK S. CAMPBELL* JESSICA S. CAREY JEANETTE K. CHAN YVONNE Y F. CHAN LEWIS R CLAYTON TELEPHONE (86-fOJ 5828-6300 ( 1950-1995) (1927-1950) l 1927- t 977\ 12TH FLOOR, HONG KONG CLUB BUILDING 3A CHATER ROAD, CENTRAL HONG KONG TELEPHONE (852) 2846-0300 JAY COHEN KELLEY A. CORNISH CHRISTOPHER J. CUMMINGS ALDER CASTLE I 0 NOBLE STREET LONDON EC2V 7JU, U.K. WPITER'S DIRECT DIAL NUMBER TELEPHONE (44 20) 7367 1600 212-373-3260 FUKOKU SEIMEI BUILDING 2-2 UCHISAIWAICHO 2-CHOME WRITER'S DIRECT FACSIMILE CHIYODA-KU, TOKYO 100-0011, JAPAN 212-492-0260 TELEPHONE (81-3) 3597-8101 WRITER'S DIRECT E-MAIL ADDRESS TORONTO-DOMINION CENTRE 77 KING STREE::T WEST, SUITE 3100 P.O. BOX 226 TORONTO, ONTARIO MSK tJ3 TELEPHONE:: (416) 504-0520 2001 K STREEi, NW WASHINGTON, DC 20006-1047 TELEPHONE (202) 223-7300 500 DELAWARE AVENUE, SUITE 200 POST OFFICE BOX 32 WILMINGTON, DE 19899-0032 -l,J ~-~;t=~. l r, 1 T~_".":Pfi()_NE"(30Z)OSS-44TOll December 2, 2014 I DOCT \I. rl f\ '. By Hand I '' \ ; i 1·· 1:C' 1·" 1 >'' 'C''\ 1 I\ ' . !'.' . • ' ' 1: l hJ( ;;: ' -, : l l [ l United States District Daniel Patrick Moynihan United States Courthouse 500 Pearl Street, Room 1040 New York, New York 10007-1312 j_ MARK F. MENDELSOHN WILLIAM 8. MICHAEL TOBY S. MYERSON CATHERINE NYARADY JANE B. O'BRIEN ALEX YOUNG K. OH BRAD R. OKUN KELLEY D. PARKER MARC E. PERLMUTTER VALERIE E. RAOWANER CARL L REISNER WALTER G. RICCIARDI WALTER RIEMAN RICHARD A. ROSEN ANDREW N. ROSENBERG JACQUELINE P. RUBIN RAPHAEL M. RUSSO JEFFREY D. SAFERSTEIN JEFFREY B. SAMUELS DALE M SARRO TERRYE. SCHIMEK KENNETH M. SCHNEIDER ROBERT B. SCHUMER JAMES H. SCHWAB JOHN M. SCOTT STEPHEN J. SHIMSHAK DAVID R. SICULAR MOSES SILVE::RMAN STEVEN SIMKIN JOSEPH J. SIMONS MARILYN SOBEL AUDRA J. SOLOWAY SCOTT M SONTAG TARUN M. STEWART ERIC ALAN STONE AIDAN SYNNOTT ROBYN F. TARNOFSKY MONICA K. THURMOND DANIEL J. TOAL LIZA M. VELAZQUEZ MARIA T VULLO ALEXANDRA M. WALSH* LAWRENCE G. WEE THEODORE V. WELLS. JR. BETH A. WILKINSON STEVEN J. WILLIAMS LAWRENCE I. WITDORCHIC MARK B WLAZLO JULIA MASON WOOD JORDAN E. YARETT KAYE N. YOSHINO TONG YU TRACEY A. ZACCONE T. ROBERT ZOCHOWSKI, JR. r·r·> I,i ! tj 'J/--- -] '7 -.~ ~~- __ · u ge-·------ ---- . The Honorable V1ctol&\:1L__ 1·'1 < I ' CHARLES E. DAVIDOW DOUGLAS R DAVIS THOMAS V DE LA BASTIDE 111 ARIEL J DECKELBAUM ALICE BELISLE EATON ANDREW J. EHRLICH GREGORY A. EZRING LESLIE GORDON FAGEN MARC FALCONE ROSS A. FIELDSTON ANDREW C. FINCH BRAD J. FINKELSTEIN BRIAN P. FINNEGAN ROBERTO FINZI PETER E. FISCH ROBERT C. FLEDER MARTIN FLUMENBAUM ANDREW J FOLEY HARRIS B. FREIDUS MANUEL S FREY ANDREW L. GAINES KENNETH A GALLO MICHAELE. GERTZMAN ADAM M. GIVERTZ SALVATORE GOGLIORMELLA ROBERT D. GOLDBAUM NEIL GOLDMAN ERIC S. GOLDSTEIN ERIC GOODISON CHARLES H. GOOGE, JR. ANDREW G. GORDON UDIGROFMAN NICHOLAS GROOMBRIDGE BRUCE A. GUTENPLAN GAINES GWATHMEY, 111 ALAN S. HALPERIN JUSTING. HAMILL CLAUDIA HAMMERMAN GERARD E. HARPER BRIAN S. HERMANN ROBERT M. HIRSH MICHELE HIRSHMAN MICHAELS. HONG DAVIDS. HUNTINGTON LORETTA A. IPPOLITO JAREN JANGHORBANI MEREDITH J. KANE ROBERTA A. KAPLAN BRADS. KARP PATRICK N. KARSNITZ JOHN C. KENNEDY ALAN W. KORNBERG DANIEL J. KRAMER DAVID K. LAKHDHIR STEPHEN P. LAMB* JOHN E. LANGE DANIEL J LEFFELL XIAOYU GREG LIU JEFFREY D. MARELL MARCO V. MASOTTI EDWIN S MAYNARD DAVID W. MAYO ELIZABETH R. MCCOLM ' ' i: -----1 Anwar, et al. v. Fairfield Greenwich Limited, et al., No. 09-cv-118 (S.D.N.Y.) (VM) (FM) Dear Judge Marrero: On behalf of the Citco Defendants, we are writing to respond to the portion of plaintiffs' letter dated November 20, 2014, that discusses the district court's decision in Osberg v. Foot Locker, Inc., No. 07-cv-1358 (KBF), 2014 WL 5800501 (S.D.N.Y. Nov. 7, 2014),petitionfor perm to app. under Fed. R. Civ. P. 23(/)filed, No. 14-3748(L), ECF No. 42 (2d Cir. Nov. 25, 2014). Osberg does not alter the conclusion that plaintiffs' motion for class certification should be denied. Osberg certified a class alleging claims for plan reformation under ERISA. Such claims, the Osberg court held, do not require proof of reliance. See id. at *1. The Osberg court's discussion ofreliance was consequently dicta. Here, in contrast, I PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP The Honorable Victor Marrero United States District Judge 2 proof of actual and reasonable reliance is essential to the Anwar plaintiffs' claims. (See Citco Opp. Br. 2-17, ECF No. 1323.) 1 In any event, Osberg' s dicta concerning reliance have no application to Anwar. In Osberg, the court found that on the particular facts of that case, no reasonable juror could have accepted the defendant's position respecting reliance. See 2014 WL 5800501, at *6. In the view of the Osberg court, the defendant there "ha[d] proffered not a shred of evidence" that reliance would require an individualized inquiry. Id. Here, in contrast, the Citco Defendants have identified substantial evidence demonstrating-among other propositions-that the alleged misrepresentations were not made uniformly to the putative class members; that substantial individualized issues of fact exist concerning whether any particular putative class member received the alleged misrepresentations prior to making a decision to invest; and that actual and reasonable reliance similarly involve substantial individualized inquiries. (See Citco Opp. Br. 2-17.) Plaintiffs suggest that they are exempt from the jurisprudence generally governing attempts at class certification ofreliance-based claims, because, they say, "[i]t is inconceivable that any investor would knowingly invest in a Ponzi scheme." (Pls.' Ltr. 2.) That contention is merely a rephrased version of the so-called fraud-created-themarket theory, which is the theory "that but for the defendant's fraud, no market for the securities would have existed at all." Pa. Pub. Sch. Emps. 'Ret. Sys. v. Morgan Stanley & Co., No. 13-2095-cv(L), 2014 WL 5487666, at *6 (2d Cir. Oct. 31, 2014). As our letter of November 17, 2014, explained, the Second Circuit's decision in Pennsylvania Public School rejected the fraud-created-the-market theory as a purported interpretation of New York law, and implicitly but unmistakably criticized that theory as a purported interpretation of the federal securities laws. See id. at *6-7. Respectfully submitted, lDfltt'~~~ Walter Rieman cc: All counsel in Anwar (by e-mail) The Clerk of Court is directed to enter into the public record of~is ~ct~o~ the le~ter, ab~~e sub":itted t~e Court by ~:cl~ c&,f?= SO ORDERED. /), >'I/ DATE ' vi 2) o/ v~ I I µ ~ / /,,./ /·. . ---7 ~.//"/ ~-= ~l(?'f'Q'RMARRERO. U.S.D.J. Capitalized terms have the meanings set forth in Citco's letter to Your Honor dated November 17, 2014.

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