Policemen's Annuity and Benefi v. Apollo Group, Inc.

FILED
NOT FOR PUBLICATION JUN 23 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
In re: APOLLO GROUP, INC. No. 08-16971
SECURITIES LITIGATION,
D.C. No. 2:04-cv-02147-JAT
POLICEMEN’S ANNUITY AND MEMORANDUM *
BENEFIT FUND OF CHICAGO,
Plaintiff - Appellant,
v.
APOLLO GROUP, INC. et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Arizona
James A. Teilborg, District Judge, Presiding
Argued and Submitted March 3, 2010
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
page 2
Before: KOZINSKI, Chief Judge, W. FLETCHER, Circuit Judge and
GETTLEMAN,** District Judge.
The district court erred in granting Apollo judgment as a matter of law. The
jury could have reasonably found that the UBS reports following various
newspaper articles were “corrective disclosures” providing additional or more
authoritative fraud-related information that deflated the stock price. Cf. In re
Gilead Scis. Sec. Litig., 536 F.3d 1049, 1058 (9th Cir. 2008) (later disclosure
corrective when public initially “failed to appreciate [the] significance” of negative
information); Hanon v. Dataproducts Corp., 976 F.2d 497, 503 (9th Cir. 1992)
(what market understands depends on “intensity and credibility” of information).
Apollo is not entitled to a new trial. The district court did not abuse its
discretion by excluding Flynn’s potentially confusing deposition testimony, which
Apollo had already chosen not to use on cross-examination. See Fed. R. Evid. 403;
Sprint/United Mgmt. Co. v. Mendelsohn, 552 U.S. 379, 384 (2008). The district
court also properly instructed the jury. It made clear that damages could be
awarded only for fraud-related losses, and it was not required to instruct the jury on
a theory of liability the plaintiffs hadn’t presented.
**
The Honorable Robert W. Gettleman, United States District Judge for
the Northern District of Illinois, sitting by designation.
page 3
Finally, there is no basis for remittitur. The jury could have reasonably
credited the expert who testified that the fraud revealed by multiple corrective
disclosures accounted for $5.55 of the drop in stock price. Damages are limited by
the extent of Apollo’s fraud, not by the subset of fraud the UBS reports alone
revealed. See In re Dauo Sys., Inc., 411 F.3d 1006, 1027 (9th Cir. 2005)
(“[Plaintiffs’] economic loss was the decline in their stock value that was the direct
result of Dauo’s misrepresentations.”).
We reverse and remand with instructions that the district court enter
judgment in accordance with the jury’s verdict.
REVERSED AND REMANDED WITH INSTRUCTIONS.