On September 23, 2008, Judge Irma Gonzalez of the US District Court for the Southern District of California dismissed plaintiffs’ Second Amended Complaint in the securities class action against Neurocrine Biosciences, Inc. The court granted plaintiffs leave to file a Third Amended Complaint within 30 days of its order.
On October 31, however, the court noted that rather than amending the complaint, plaintiffs had filed a “Notice of Election to Stand on the Second Amended Consolidated Complaint” requesting that final judgment be entered against them in the case. The court therefore entered judgment against plaintiffs and closed the case.
“Electing to stand” on a complaint that the court has already deemed to fail to state a claim, as in this case, is rare but apparently not unprecedented. The strategy seems to be to seek an immediate appeal. A quick search shows that in a 1995 Third Circuit opinion (click here) in a case against Westinghouse, for instance, the court stated that
Plaintiffs filed a “Notice of Intention to Stand on Second Consolidated Amended Class Action Complaint,” in which they informed the district court that they would not be amending the complaint; rather, plaintiffs stated that they were going to “stand” on the complaint and seek immediate appellate review.
More recently, in a Ninth Circuit case against Golden State Vintners, the court noted that
On February 15, 2007, the Lead Plaintiff filed a notice of his election to instead stand on his Amended Complaint, and requested that final judgment be entered so that appeal can be taken therefrom.
Read the Order for Entry of Judgment in Neurocrine Biosciences, Inc. (via RiskMetrics Group’s Securities Class Action Services)
