The U.S. Third Circuit Court of Appeals in City of Roseville Employees'
Retirement System v. Horizon Lines, Inc., et al., Case No. 10-2788, on
August 24, 2011, in a 2-to-1 decision, read opinion here [an enhanced version of this
opinion is available to lexis.com subscribers], affirmed
the District Court's granting of defendants' motion to dismiss all claims
against corporate defendants and five officers and directors for securities
fraud under the heightened pleading rules codified in the Private Securities
Litigation Reform Act (the "PSLRA"). The majority substantively
agreed with the District Court's resolution of the defendants' motion to
dismiss, preferring to not "retrace all of the ground the Court so ably
This summary was prepared by Kevin F. Brady of Connolly Bove Lodge &
The Court of Appeals noted that the PSLRA places "a weighty burden on
plaintiffs" to plead sufficient facts, when viewed in their totality, to raise
a strong inference of scienter. The District Court applied the Fifth Circuit's
approach in Southland Securities Corp. v. INSpire Insurance Solutions, Inc.,
365 F.3d 353, 366 (5th Cir. 2004), in which the court recognized that statements
of executive officers may be attributed to a corporation when they are
"made pursuant to their positions of authority within the
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