In the Baxter decision issued in July, the U.S. Court of Appeals for the Seventh Circuit severely limited the application of the PSLRA's safe harbor by holding that it may be impossible, on a motion to dismiss, to determine whether a company's cautionary statements are "meaningful." Baxter may turn out to be influential, but for the moment other appellate courts are continuing to affirm dismissals based on the safe harbor.
In Baron v. Smith, 2004 WL 1847751 (1st Cir. Aug. 18, 2004) the U.S. Court of Appeals for the First Circuit addressed claims based on forward-looking statements in a press release. The court cited the company's safe harbor language and found that to "the extent that plaintiffs seek to state a claim under the securities laws for a deceptive press release or as an indication that the company omitted material information from its filings, we agree with the district court that the press release contained forward-looking statements, as stated therein, and therefore comes under the protection of the statutory safe harbor."
Holding: Affirming grant of motion to dismiss.Posted by Lyle Roberts at September 14, 2004 12:15 AM | TrackBack