Invent a Confidential Witness and Sue? Judge Says Not This Time

By March 22, 2011Briefly Legal, General

The Wall Street Journal’s weekend edition (best newspaper read there is) ran a lead editorial praising Chicago-based U.S. District Court Judge Suzanne Conlon for dismissing a securities class action suit against Boeing by the city of Livonia’s retirement system, calling her ruling “the biggest plaintiff smackdown of the year.” As summarized in the editorial, “Boeing Beats the Trial Bar,”[subscription] the plaintiffs failed to survive Boeing’s original motion to dismiss for lack of sufficiently specific allegations of fraud or fraudulent intent, but the judge allowed them to refile.

Presto, they did. In their amended complaint, the plaintiffs claimed they had a confidential source, a former Boeing chief engineer, who had worked directly with the Dreamliner and had seen damning emails and files related to the flight delay.

On that basis, the judge allowed the case to go forward. Only problem, the plaintiffs had no such thing. When the motion to dismiss was denied, the plaintiffs revealed the source as Bishnujee Singh. Not only had the plaintiffs falsely identified him as a senior engineer with access to 787 records, he didn’t even work for Boeing. “In reality,” the judge wrote, “he was employed as a line engineer by an outside contractor doing work at Boeing three or four months after the events in issue.”

U.S. District Court Judge Suzanne Conlon’s order and memorandum in City of Livonia Employees’ Retirement System v. Boeing Company is available here. The shakedown suit came from the schemers at Robbins Geller, a successor law firm to Coughlin Stoia of Bill Lerach infamy.

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P.S. Not only did the judge get the ruling right, she also framed the case in a creative way.

The cast of characters is worthy of a contemporary novel. The players include executives of a major corporation who allegedly deceived investors about a jumbo jet on the production line; eager class action plaintiffs’ lawyers who relentlessly pursue a federal securities fraud case against the company and two of its top executives; a changing array of distinguished defense attorneys who aggressively pursue the plaintiffs’ attorneys for perpetrating a fraud on the court; and a pair of investigators who apparently make house calls to glean evidence for the plaintiffs’ attorneys. At the center of this drama is the purported confidential source, who had a series of fateful conversations with plaintiffs’ investigators and months later with defense counsel. The confidential source did not meet plaintiffs’ counsel until he was recently deposed, months after plaintiffs’ counsel used information purportedly provided by the confidential source to survive dismissal of this lawsuit. The confidential source now denies the information attributed to him in plaintiffs’ pleadings and in their representations to the court. Plaintiffs assert their confidential source is presently lying, while the confidential source claims it is plaintiffs’ investigators who are the liars.

Against this contentious backdrop, the court must decide whether we have reached the final chapter.

Alas, despite her clear decision, trial lawyers have a way of dreaming up sequels.

P.P.S. With respect, your honor, “presently” does not mean “at present.” It means “in the near future.” It’s the last usage battle we fight, having surrendered on the “impact” as a verb front.

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