Bitey: Snappy, those nice people at The Wall Street Journal put a big whamba-lamba ding-dong on some real bad lawyers this weekend. Won't those shysters not never learn? Right?
Snappy: As if.
Bitey: Didn't you read it, Snaps? It said an awesome judge in Chicago kicked a case against Boeing because the lawyers had told her about what a "confidential source" knew -- wrongly! Something to do with the 787 Dreamliner. Like the execs somehow knew it had problems!
Snappy: Duh.
Bitey: Wake up! You totally hate on lawyers who lie.
Snappy: Mmmph.
Bitey: Although I read Judge Conlon's nine-page opinion and saw that she didn't say they lied and mainly complained they hadn't checked the guy's story enough:
More significantly, this unseemly conflict between plaintiffs' confidential source and plaintiffs' investigators could have been avoided by reasonable inquiry on the part of plaintiffs' counsel before filing the second amended complaint and, later, by making flawed representations directly to the court about the confidential source's position and firsthand knowledge of Boeing's internal testing documents. It is uncontested that plaintiffs' counsel did not meet Singh until his deposition approximately six months after filing the second amended complaint, nor does it appear that counsel conducted a reasonable investigation concerning the credibility and reliability of a purported key witness attributed with making the serious allegations in paragraphs 139-142. Rather, plaintiffs' counsel relied on investigators' unverified interview reports, even though one report noted Singh's information regarding Boeing's Structural Design reporting hierarchy was unreliable. Dkt. No. 193 (January 18, 2011) Ex. 9 at 20. This should have been a red flag. Instead, the information described by the investigator as unreliable was included in paragraphs 139 and 140 of the second complaint.
Snappy: Go away.
Bitey: I myself blame the Private Securities Litigation Reform Act. Because -- as the smart, honest, and exceptionally good-looking WSJ folks pointed out -- the lawyers had a town's pension fund as a client; and under the PSLRA you pretty much have to get an institutional investor as a client if you want to represent a class in a securities fraud case. The really, really, really super-duper lawyers don't go there. So you get firms that institutionally represent institutional investors. Urp.
Snappy: Do you know all you've said so far sounded to me like buzzzzz?
Bitey: Huh?
Snappy: Buzzzzzzzzzzzzz.
Bitey: What. Ever.
Now I'll quote something else from WSJ:
As all trial lawyers know, the main hurdle for this kind of case is surviving the motion to dismiss. To move forward, plaintiffs must present some bare-bones evidence of fraud to the court. If their complaints can squeak by, the case moves into the discovery phase, allowing attorneys to rummage through millions of documents, imposing huge costs and inconvenience on companies that increase the incentive to settle.
In fact, Snapster, you don't have to "present some bare-bones evidence of fraud to the court". You've got to plead fraud "with particularity". And you've got to make the judge draw a "strong inference" of intent to defraud. Bare bones, hah!
Snappy: Imagine my surprise.
Bitey: One last thing. The lawyers offered 21 exhibits to show Boeing did lie about the 787, but the judge refused to give them weight. Because the issue, to her, boiled down to whether she would've granted a motion to dismiss many months before if she'd known the truth about the source.
Snappy: Pipe down. I can't hear Top Chef.
Fade to black.
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