Strike Two in the Fourth Circuit = Out

Last week, the United States Court of Appeals for the Fourth Circuit affirmed the dismissal of the remaining claims in Glaser v. Enzo Biochem, Inc.

The Glaser case arose from allegedly false statements made by the company regarding a new treatment that Enzo had developed to combat HIV.

This was not the first time that this case has been to the Fourth Circuit. In an opinion last March, the Court affirmed the dismissal of the plaintiffs' federal securities fraud and conspiracy claims but reversed dismissal of the plaintiffs' Virginia common law fraud claims. A copy of the Fourth Circuit's prior opinion is available here.

After remand, certain defendants moved to dismiss the common law fraud claims against them on the grounds that those defendants had not made any of the remaining actionable statements. The other defendants also moved to dismiss the common law fraud claims for failure to plead loss causation.

The Fourth Circuit held that Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005), did apply to plaintiffs' common law fraud claims, and that the complaint failed to establish a causal link between the allegedly fraudulent statements and the losses that plaintiffs suffered.

The Glaser case was pending in the United States District Court for the Eastern District of Virginia before Judge Gerald Bruce Lee.

Sharp eyed readers may recognize the Glaser case as the second case to discuss whether the longer statute of limitations for federal securities fraud claims in the Sarbanes-Oxley Act of 2002 acted to revive claims that had already expired under the earlier one year/three years statute of limitations. See Glaser v. Enzo Biochem, Inc., 303 F. Supp. 2d 724 (E.D. Va. 2003)

Enzo Biochem (NYSE: ENZ) is a life sciences and biotechnology company:

focused on harnessing genetic processes to develop research tools, diagnostics and therapeutics and provides reference laboratory services to the medical community.

One of the plaintiffs, Lawrence F. Glaser is an inventor. One of his more interesting patents is for a computer mouse that, through the use of a unique identifier, causes a particular desktop theme to be displayed by the graphical user interface of the computer.

The Glaser's attorney is Michael J. Rovell. Mr. Rovell is perhaps best known for representing Allen Dorfman, an alleged mobster accused of skimming millions from the Central States Southeast and Southwest Areas Pension Fund of the International Brotherhood of Teamsters.

Daily Trivia: The Fourth Circuit maintains its offices in the Lewis F. Powell, Jr., Federal Courthouse in Richmond. The courthouse is one of only two buildings in the historic core of Richmond to survive the 1865 fire that marked the evacuation of the Confederate Army during the last days of the Civil War.