Bernstein Shur Business and Commerical Litigation Newsletter #52
We are pleased to present the 52nd edition of the Bernstein Shur Business and Commercial Litigation Newsletter. This month, we highlight recent cases that address the consequences of failure to adhere to a court’s brief formatting rules and expansion of liability of investment advisors under state securities laws. We hope you enjoy the newsletter.
In the News:
Failure to follow Court formatting and brief length rules results in dismissal of appeal. Pi-Net lost its patent infringement suit against JPMorgan when the United States District Court for the District of Delaware found that the three patents at issue were invalid. Pi-Net appealed the judgment to the Federal Circuit, and its opening brief was just under the court’s 14,000-word limit. JPMorgan replied by arguing in its brief that Pi-Net had used multiple formatting tricks, including deleting spaces between words, using confusing acronyms and truncating case citations., They argued further that without those tricks, Pi-Net’s brief would have been over 15,000 words, well over the court’s limit. Pi-Net was given a second chance, and again failed, to comply with the court’s rules, resulting in a three-judge panel ruling that the brief should be stricken and dismissed the appeal. Pi-Net requested an en banc hearing by the Federal Circuit; however, that request was denied. This serves as a cautionary tale for those who are tempted to stray from court rules regarding brief formatting.
The case is Pi-Net International Inc. et al. v. JPMorgan Chase & Co., case number 14-1495, in the U.S. Court of Appeals for the Federal Circuit. Read more about this case here:
Hedge fund advisor liable as a seller under Massachusetts Uniform Securities Act (MUSA). The Massachusetts Supreme Judicial Court has found that an investment advisor, motivated by the potential for financial gain from increased advisory fees, faces liability under the anti-fraud provisions of the MUSA as a “seller” of securities. The court rejected the argument that seller liability could not attach because the defendant had no financial interest in the purchase of securities from a third-party, and received no commission or other compensation directly linked to the purchase of securities. In another pro-plaintiff ruling, the SJC’s decision also found that the statute of limitations did not begin to run until the plaintiff had actual knowledge that the investment was not suitable for her. This decision may portend expanded liability for investment advisors under state securities acts.
Read more about this development here: