WRCF Secures Summary Judgment in Favor of the City of Alameda Against Securities Fraud Claims Exceeding $15 Million

On May 16, 2011, Wulfsberg Reese Colvig & Firstman (WRCF) won a summary judgment in favor of the City of Alameda dismissing securities fraud claims brought against the City by two major investors in the City's since-discontinued cable TV and Internet operation.  The investor plaintiffs – Nuveen Asset Management and the Bernard Osher Trust – claimed damages against the City in excess of $15 million.  In granting summary judgment for the City of Alameda on all claims against it, the United States District Court for the Northern District of California, Judge Susan Illston, agreed with the City that the claims made by the plaintiffs were without merit, and that the City owed them no money.

Specifically, the Court analyzed the statutes, legislative history and caselaw submitted by WRCF on behalf of Alameda and agreed, in what it held was an issue of first impression, that the California Government Code provides public entities with “absolute” immunity from securities fraud claims under the law of any state (Nuveen had filed claims based on both California and Illinois law).   

The Court also agreed with arguments presented by WRCF that plaintiffs alleging federal securities fraud claims are required by the Private Securities Litigation Reform Act to demonstrate a direct causal connection between the particular practices that the plaintiff claims are fraudulent and the losses suffered by the plaintiff.  Because Alameda’s briefing demonstrated that Nuveen and Osher could not satisfy this standard, the Court also dismissed the plaintiffs’ federal securities fraud claims. 

WRCF Principals Gregory Aker and Richard Elder represented the City. 

A copy of the Court’s opinion can be found here.