United States District Court, D. Minnesota
IBEW Local 98 Pension Fund, Marion Haynes, and Rene LeBlanc, individually and on behalf of all others similarly situated, Plaintiffs,
Best Buy Co., Inc.; Brian J. Dunn; Jim Muehlbauer; and Mike Vitelli, Defendants.
MEMORANDUM OPINION AND ORDER
DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE.
are stockholders of Defendant Best Buy Co., Inc. (“Best
Buy”). Plaintiffs filed suit against Defendants for
securities fraud and sought to represent a class of
stockholders who were injured. This case came back on remand
from the Eighth Circuit's reversal of this Court's
order certifying the class. The case is now before the Court
on a motion for summary judgment brought by Defendants Best
Buy, Brian J. Dunn, Jim Muehlbauer, and Mike Vitelli. (Doc.
No. 329.) For the reasons discussed below, the Court grants
September 14, 2010, Best Buy issued a press release
summarizing its financial performance for the second quarter
of its fiscal year 2011. IBEW Local 98 Pension Fund v.
Best Buy Co., 818 F.3d 775, 777 (8th Cir. 2016)
(“Eighth Circuit Order”). The press
release drove up the stock price. A few hours later, Best Buy
held a conference call where its Chief Financial Officer
(“CFO”) stated that Best Buy's earnings would
be “in line” with its original expectations and
that Best Buy was “on track” with its original
earnings-per-share (“EPS”) guidance. Id.
On December 14, 2010, Best Buy issued a press release
reporting a decline in sales for the third quarter.
Id. Likewise, Best Buy's CFO explained the lower
sales in a conference call that day. Id. at 778.
After these announcements, Best Buy's stock price fell.
filed suit for securities fraud based on the alleged
misstatements in the September 14, 2010 press release and
conference call. After a first motion to dismiss was granted,
Plaintiffs amended their complaint and filed their First
Amended Consolidated Class Action Complaint. (Doc. No. 61
(“First Am. Compl.”).) Plaintiffs did not allege
actual reliance on the asserted statements, but instead
explained that they would “rely upon the presumption of
reliance established by the fraud-on-the-market
doctrine.” (Id. ¶ 176.) Defendants again
moved to dismiss. (Doc. No. 65.) This Court granted the
motion to dismiss in part. (Doc. No. 78.) The Court concluded
that claims based on the EPS guidance statement in the press
release were not actionable, but also found that the
conference call statements were actionable. Later, the Court
granted Plaintiffs' motion to certify a class. (Doc. No.
200.) Defendants appealed. On appeal, the Eighth Circuit
reversed the certification and remanded the case. In doing
so, the Eighth Circuit held that Defendants had rebutted the
presumption of reliance by submitting direct evidence of no
price impact, namely evidence that severed any link between
the alleged conference call misstatements and the stock price
at which Plaintiffs purchased. Eighth Circuit Order
at 782-83. On remand, the Court denied Plaintiffs'
request to file a renewed motion for class certification,
explaining that because the Eighth Circuit found that
Plaintiffs failed to show price impact, they will have to
proceed with traditional evidence of reliance. “That
is, Plaintiffs will have to show that they heard the
September 14 conference call and bought or sold the stock
because of the call.” (Doc. No. 282 at 9.)
then moved to amend the complaint, seeking to allege
substantial evidence of additional actionable
misrepresentations and omissions. The motion to amend was
denied. (Doc. Nos. 311, 324.) Defendants now move for summary
judgment is appropriate if the “movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). Courts must view the evidence, and the
inferences that may be reasonably drawn from the evidence, in
the light most favorable to the nonmoving party. Weitz
Co., LLC v. Lloyd's of London, 574 F.3d 885, 892
(8th Cir. 2009). However, “[s]ummary judgment procedure
is properly regarded not as a disfavored procedural shortcut,
but rather as an integral part of the Federal Rules as a
whole, which are designed ‘to secure the just, speedy
and inexpensive determination of every action.'”
Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986)
(quoting Fed.R.Civ.P. 1).
moving party bears the burden of showing that there is no
genuine issue of material fact and that it is entitled to
judgment as a matter of law. Enter. Bank v. Magna
Bank, 92 F.3d 743, 747 (8th Cir. 1996). The nonmoving
party must demonstrate the existence of specific facts in the
record that create a genuine issue for trial. Krenik v.
Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995). A
party opposing a properly supported motion for summary
judgment “may not rest upon mere allegation or denials
of his pleading, but must set forth specific facts showing
that there is a genuine issue for trial.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).
bring claims under §§ 10(b) and 20(a) of the
Securities Exchange Act. The elements of a claim under
Section 10(b) are: (1) a material misrepresentation or
omission; (2) scienter; (3) a connection between the
misrepresentation or omission and the purchase or sale of a
security; (4) reliance; (5) economic loss; and (6) loss
causation. Amgen Inc. v. Conn. Ret. Plans & Tr.
Funds, 568 U.S. 455, 460-61 (2013). At issue here is the
element of reliance.
plaintiff can demonstrate reliance by showing that he knew
about the statement and that he bought or sold stock based on
that statement. Erica P. John Fund, Inc. v. Halliburton
Co., 563 U.S. 804, 810 (2011) (“Halliburton
I”). “A plaintiff unaware of the relevant
statement, on the other hand, could not establish reliance on
that basis.” Id. at 810. In light of the
practical shortcomings of this approach in securities-fraud
cases, a plaintiff is allowed to proceed based on a
rebuttable presumption of reliance, often referred to as the
fraud-on-the-market theory. Halliburton Co. v. Erica P.
John Fund, Inc., 134 S.Ct. 2398, 2407-08 (2014)
(“Halliburton II”). ...