United States District Court, D. Delaware
BRADD GOLD, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
FORD MOTOR COMPANY and FORD MOTOR COMPANY CAPITAL TRUST II, Defendants
Norman M. Monhait and P. Bradford deLeeuw, ROSENTHAL, MONHAIT & GODDESS, P.A., Wilmington, DE. Attorneys for Plaintiff.
Stuart J. Baskin, Jerome S. Fortinsky, and Christopher R. Fenton, SHEARMAN & STERLING LLP, New York, NY. Jon E. Abramczyk and John P. DiTomo, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, DE. Attorneys for Defendants.
Leonard P. Stark, U.S. District Judge.
Currently pending before the Court is Plaintiff's Motion to Amend Judgment and For Leave to File [Proposed] Second Amended Complaint. (D.I. 33) For the reasons set forth below, the Court will deny Plaintiff's motion.
On July 8, 2010, Lead Plaintiff Bradd Gold (" Gold" or " Plaintiff" ) filed suit against Defendants Ford Motor Company and Ford Motor Company Capital Trust II (collectively, " Ford" or " Defendants" ). (D.I. 1) In his Amended Complaint (D.I. 19), Plaintiff asserted four counts against Defendants alleging securities fraud in violation of Section 10(b) of the Securities Exchange Act of 1934 (" Section 10(b)" ), 15 U.S.C. § 78j(b); SEC Rule 10b-5 (" Rule 10b-5" ), 17 C.F.R. § 240.10b-5; SEC Rule 10b-17 (" Rule 10b-17" ), 17 C.F.R. § 240.10b-17; and Section 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78t(a). On January 14, 2011, Defendants
moved to dismiss the Amended Complaint on five separate grounds. (D.I. 21) The Court heard oral argument on the Motion to Dismiss on September 22, 2011. (D.I. 30) On April 2, 2012, the Court granted Defendants' Motion to Dismiss. (D.I. 31; D.I. 32)
The Court granted Defendants' Motion to Dismiss because the Amended Complaint failed to state a claim for a Section 10(b) violation on which relief could be granted. Specifically, the Court concluded that the Amended Complaint failed to allege at least one necessary element of a Section 10(b) claim: loss causation. In its opinion, the Court also noted that the law is unclear as to whether Rule 10b-17 confers a private right of action.
On April 27, 2012, Plaintiff filed the pending Motion to Amend. (D.I. 33) The Court will deny Plaintiff's motion for the following reasons: (1) there is no private right of action under Rule 10b-17; (2) Plaintiff fails to adequately plead loss causation; and (3) Plaintiff fails to adequately plead scienter.
II. LEGAL STANDARDS
Pursuant to Federal Rule of Civil Procedure 15(a), a party may amend its pleading more than 21 days after serving it, or more than 21 days after service of a responsive pleading or a motion under Rule 12(b), (e), or (f), " only with the opposing party's written consent or the court's leave." Rule 15 further provides that " [t]he court should freely give leave when justice so requires." See Dole v. Arco Chem. ...