Providing summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit. Over 60,000 cases summarized to date.
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Alleged violations of the Securities Acts of 1933 (the 1933 Act) & 1934 (the 1934 Act); Whether plaintiffs stated a claim for false & misleading statements or omissions about defendant’s “customer-acquisition cost” (CAC) & warnings in its Registration Statement; 15 USC §§ 11, 12(a)(2), & 15; §§ 10(b) & 10b-5; Whether plaintiff’s claims under §§ 11 & 12(a)(2) were subject to FedRCivP 9(b)’s heightened pleading requirements; Whether the contested statements were actionable or were protected as “historical statements of past performance”; The “Bespeaks Caution” doctrine; The Private Securities Litigation Reform Act (PSLRA); Control-person liability
The court held for the first time that the Bespeaks Caution doctrine survived the codification of the PSLRA, and concluded it will shield companies from liability when “forward-looking statements are accompanied by meaningfully cautionary language so that a reasonable investor would understand the statements.” Plaintiff-Plumbers Local 290 Pension Trust Fund invested in defendant-Root, Inc., attracted by its supposedly low CAC. When the stock was purchased, it sold for $27 per share. But the stock price decreased when Root’s CAC increased, ending its competitive advantage. It claimed this was caused by its nationwide expansion. Plumbers Local and other investors sued under the 1933 and 1934 Securities Acts. The district court dismissed the complaint for failure to state a claim. On appeal, the court agreed with the district court that the Rule 9(b) pleading standard applied where “plaintiffs presented a 1934 Act Section 10(b) fraud claim and a 10b-5 fraud claim along with 1933 Act Sections 11 and 12(a)(2) claims that were all grounded in one fraudulent course of conduct relying on one set of facts, alleging that Root made materially false and misleading statements and omissions.” The court further held that two of the statements at issue involved “protected statements of past or historical performance,” and that Root “had no duty to update [them] even if less favorable results might have been predictable.” The court also joined other circuits in holding that the Bespeaks Caution doctrine survived the PSLRA’s codification and that “when companies such as Root make forward-looking statements contained in a registration statement or in connection with an initial public offering, the Bespeaks Caution doctrine” shields them from liability when those “statements are accompanied by meaningfully cautionary language so that a reasonable investor would understand the statements.” It found that the third statement at issue was “a cautionary statement, is labeled a risk factor, and is forward-looking. It falls squarely within the Bespeaks Caution doctrine’s protection.” The court also noted that since there was no primary violation of either §§ 11 or 12(a)(2), there was “no control-person liability” here. Affirmed.
Sentencing; Reasonableness & proportionality; Departure sentence; Consideration of a defendant’s plea deal & conduct beyond the sentencing offense; People v Coulter; The trial court’s justification for an upward departure; People v Dixon-Bey
The court held that the trial court abused its discretion by failing to provide an adequate rationale for the extent of its departure sentence. Defendant pled no contest to second-degree home invasion and domestic violence arising out of an incident involving his ex-girlfriend. The trial court departed from the minimum sentencing guidelines range and sentenced him to 10 to 15 years for the former, and to a concurrent jail sentence of 93 days for the latter. On appeal, the court rejected his argument that the trial court improperly considered his plea agreement and his conduct associated with separate cases. However, it agreed with him that the trial court did not sufficiently articulate its justifications for the departure. The trial court identified several “factors that were contemplated by the guidelines, but it did not explain why the guidelines did not adequately account for those factors.” In addition, it “failed to articulate why OV 4 and OV 10 did not adequately consider the victim’s psychological injury and defendant’s exploitation of his domestic relationship with the victim.” Finally, “despite providing some justifications for its departure, the trial court did not adequately justify the extent of the particular departure in this case, which resulted in the imposition of the maximum minimum sentence permissible under the established two-thirds rule.” Indeed, beyond stating it “believed that the departure was proportional to defendant and the circumstances of the case, the trial court did not engage in any meaningful analysis of why the departure sentence was more proportional than any other sentence would have” been. The court vacated defendant's sentence and remanded for resentencing or further articulation of the justifications for the sentence imposed. It retained jurisdiction..
Involuntarily mental health treatment; Post-hearing request to adjourn the hearing & retain new counsel based on ineffective assistance of counsel
Holding that the “trial court did not abuse its discretion by denying respondent’s post-hearing request to adjourn the hearing and retain new counsel,” the court affirmed the probate court’s order requiring him to involuntarily undergo mental health treatment. He “was committed to a combined hospitalization and assisted outpatient treatment for no longer than 180 days, with an initial hospitalization period of up to 30 days.” He argued that he was “entitled to a new hearing because he was denied the assistance of his chosen counsel.” The court noted that at “the beginning of the hearing, the trial court confirmed that there was no other attorney present to represent respondent and that respondent had not requested anyone else.” The trial “court then decided to continue the hearing with appointed counsel, properly weighing respondent’s right to counsel of his choice against the public’s interest in the efficient administration of justice.” The court noted that he “testified on his own behalf and did not request an adjournment until the hearing was concluded and the court entered its ruling. Respondent did not identify his preferred counsel or explain why his preferred counsel was not present at the” 6/28/23 hearing. And respondent had “not offered any further explanation on appeal.”
Storm water damage claims; Statute of limitations; Governmental immunity; The Governmental Tort Liability Act; The sewage-disposal-system-event exception; MCL 691.1417(3); “Substantial proximate cause” (MCL 691.1416(l)); Distinguishing Fingerle v Ann Arbor; Ray v Swager; The continuing-wrongs doctrine; Negligence & trespass
Concluding Fingerle was distinguishable, the court reversed summary disposition for the governmental defendants in this action under the sewage-disposal-system-event exception to governmental immunity. But it affirmed summary disposition for defendant-Goodrich Country Club, holding that plaintiffs did not present sufficient evidence to support their negligence and trespass claims. It first found “the trial court misapplied the continuing-wrongs doctrine to the claims of” one group of plaintiffs. As they alleged “they were damaged by the flooding in the three-year period before” the complaint was filed, although “they had noticed the flooding many years earlier, the [trial] court erred by granting summary disposition of [their] claims during the limitations period.” As to the issue of governmental immunity for defendants-village and drain commissioner, the court agreed with plaintiffs that “they established each element of the sewage-disposal-system-event exception, including proximate cause.” Fingerle addressed the issue of substantial proximate cause pursuant to the statute. That case “involved a relatively new system that had never fully solved the problem and a plaintiff complaining that the city did not do a good enough job solving a problem it had no obligation to address to begin with. Therefore, having an expert opine that the system was inadequate did not establish that [it] was a substantial proximate cause without addressing other identified contributing causes[.]” However, in this case, “the area had become reliant on the system such that it was foreseeable . . . that allowing it to become inadequate would cause damage to neighboring property. Therefore, an expert’s opinion that the system’s deficiencies caused the damage was sufficient to survive summary disposition” even though it failed to “address all the other possible causes in existence.” The court rejected “the suggestion that Fingerle stands for the proposition that an expert must exclude any alternative explanation imaginable. Rather, the expert should address viable alternative contributing proximate causes for the flooding, which are supported by admissible evidence.” The court found Ray “instructive to the interpretation of ‘substantial proximate cause,’ and” and concluded it undermined the Fingerle holding “that a flooding event itself can be a contributing proximate cause for purposes of establishing liability under MCL 691.1417(3).” Remanded.