The application of the Stoneridge decision is likely to develop slowly, as relatively few cases raise the issue of scheme liability. That said, the early returns look positive for defendants. In In re DVI Inc. Sec. Litig., 2008 WL 1900384 (E.D. Pa. April 28, 2008), the plaintiffs alleged that the company’s law firm “initiated and masterminded a ‘workaround’ that allowed DVI to fraudulently misstate . . . that its internal controls were adequate.” In evaluating class certification, the court found that under Stoneridge the proposed class could not show reliance on the law firm’s deceptive acts. The law firm had neither “made any public misstatements that affected the market for DVI securities” nor “owed [any] duty of disclosure to DVI’s investors.”
Holding: Class certification granted, except as to the claims against DVI’s law firm.
The 10b-5 Daily 