09-3487-cv

Vladimir v. Bioenvision, Inc.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER 

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1,

2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.

WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN

ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON

ANY PARTY NOT REPRESENTED BY COUNSEL.

1 At a stated term of the United States Court of Appeals

2 for the Second Circuit, held at the Daniel Patrick Moynihan

3 United States Courthouse, 500 Pearl Street, in the City of

4 New York, on the 7 day of April, two thousand and ten. th

5

6 PRESENT: PIERRE N. LEVAL,

7 ROBERT D. SACK,

8 RICHARD C. WESLEY,

9 Circuit Judges.

10 

11

12 GARY THESLING and DONALD JOHNSON, 

13

14 Plaintiffs,

15

16 BERT VLADIMIR, individually and on behalf

17 of all others similarly situated,

18

19 Plaintiff-Appellant,

20

21 -v.- 09-3487-cv

22

23 BIOENVISION, INC., CHRISTOPHER B. WOOD,

24 JAMES S. SCIBETTA, JOSEPH P. COOPER, 

25 STEVEN A. ELMS, MICHAEL G. KAUFFMAN, and

26 ANDREW SCHIFF,

27

28 Defendants-Appellees,

29

30 PERSEUS-SOROS BIOPHARMACEUTICAL FUND, LP,

31

32 Defendant.

33 
 Plaintiff also brought claims against Perseus-Soros 1

Biopharmaceutical Fund, LP (“Perseus-Soros”) pursuant to

sections 10(b), 13(d), and 20(a) of the Securities Exchange

Act of 1934. 15 U.S.C. §§ 78j(b), 78m(d), 78t(a). The

district court dismissed these claims as well, plaintiff

does not challenge those decisions, and Perseus-Soros is not

a party to this appeal. 

1 FOR APPELLANT: LEE SQUITIERI, Squitieri & Fearon,

2 LLP, New York, NY.

3

4 FOR APPELLEES: JOHN D. DONOVAN, JR. (Christopher G.

5 Green, C. Thomas Brown, and Amy D.

6 Roy, on the brief), Ropes & Gray

7 LLP, Boston MA.

8

9 Appeal from the United States District Court for the

10 Southern District of New York (Stein, J.).

11

12 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED

13 AND DECREED that the judgment of the United States District

14 Court for the Southern District of New York be AFFIRMED. 

15 Plaintiff-appellant Bert Vladimir (“plaintiff”), lead

16 plaintiff in this securities fraud class action, appeals

17 from the dismissal of his claims against defendants18 appellees pursuant to sections 10(b) and 20(a) of the

19 Securities Exchange Act of 1934. 15 U.S.C. §§ 78j(b),

20 78t(a). We assume the parties’ familiarity with the facts, 1

21 procedural history, and issues on appeal.

22 In the Supplemental Amended Class Action Complaint,

23 plaintiff alleged that one or more defendants made seven

24 statements between February and May 2007 that were rendered

25 materially misleading by defendants’ failure to disclose
 Relying on allegations from a separate state court 2

action, plaintiff also alleged that defendants unlawfully

failed to disclose a January 2007 “secret[]” merger

agreement between Genzyme Corporation and agents of PerseusSoros, the controlling shareholder of Bioenvision. The

district court dismissed plaintiff’s claims based on this

allegation, and plaintiff has not challenged that conclusion

in this appeal. Therefore, we deem this aspect of the

claims in the Supplemental Class Action Complaint to have

been abandoned. See Norton v. Sam’s Club, 145 F.3d 114, 117

(2d Cir. 1998).

1 that defendant Bioenvision, Inc. was engaged in merger

2 negotiations with non-party Genzyme Corporation. The 2

3 district court examined each of the challenged statements

4 individually and concluded that the allegations were

5 deficient for at least one — and sometimes both — of two

6 reasons. First, with respect to several of the statements,

7 the court concluded that plaintiff had not identified any

8 legal duty that required defendants to disclose the omitted

9 information relating to the merger negotiations. Second,

10 the court also concluded that certain of plaintiff’s

11 allegations failed to meet the particularity requirements of

12 the Private Securities Litigation Reform Act of 1995, 15

13 U.S.C. § 78u-4(b), and Rule 9(b) of the Federal Rules of

14 Civil Procedure. For the reasons set forth below, we find

15 the first basis relied on by the district court to be

16 sufficient to sustain the dismissal of the claims against

17 defendants-appellees that are at issue in this appeal. 

18 In order to state claims pursuant to section 10(b) of
1 the Exchange Act and Rule 10b-5 promulgated thereunder, a

2 plaintiff must allege, inter alia, that the defendant

3 engaged in a material misrepresentation or omission. 

4 Operating Local 649 Annuity Trust Fund v. Smith Barney Fund

5 Mgmt. LLC, 595 F.3d 86, 92 (2d Cir. 2010). In this case,

6 plaintiff’s legal theory is based on alleged omissions

7 rather than misrepresentations. “For an omission to be

8 actionable, the securities laws must impose a duty to

9 disclose the omitted information.” Resnik v. Swartz, 303

10 F.3d 147, 154 (2d Cir. 2002). With respect to defendants11 appellees, who are not alleged to have traded in

12 Bioenvision’s securities, such a duty may arise either: (1)

13 expressly pursuant to an independent statute or regulation;

14 or (2) as a result of the ongoing duty to avoid rendering

15 existing statements misleading by failing to disclose

16 material facts, see 17 C.F.R. § 240.10b-5(b). 

17 Thus, it is by now axiomatic that “a corporation is not

18 required to disclose a fact merely because a reasonable

19 investor would very much like to know that fact.” In re

20 Time Warner Inc. Sec. Litig., 9 F.3d 259, 267 (2d Cir.

21 1993). As the district court correctly observed, however,

22 no express duty requires the disclosure of merger

23 negotiations, as opposed to a definitive merger agreement. 

24 Moreover, “[s]ilence, absent a duty to disclose, is not
 Although the district court did not reach this 3

conclusion with respect to each of the seven statements

relied on by plaintiff, we may affirm on any basis supported

by the record. E.g., Thyroff v. Nationwide Mut. Ins. Co.,

460 F.3d 400, 405 (2d Cir. 2006). We find that to be the

appropriate course here and, in light of our holding, do not

reach the merits of the district court’s particularity

analysis. 

5

1 misleading . . . .” Basic Inc. v. Levinson, 485 U.S. 224,

2 239 n.17 (1988). For substantially similar reasons to those

3 stated by the district court, we hold that plaintiff has not

4 identified any part of the seven challenged statements that

5 were rendered materially misleading by the alleged omissions

6 relating to Bioenvision’s merger negotiations. This 3

7 pleading deficiency is sufficient to warrant the affirmance

8 of the entire portion of the district court’s decision that

9 is challenged in this appeal, including the dismissal of

10 plaintiff’s claims against defendants-appellees for control11 person liability. See ATSI Commc’ns, Inc. v. Shaar Fund,

12 Ltd., 493 F.3d 87, 108 (2d Cir. 2007). 

13 We have considered each of plaintiff’s arguments and

14 find them to be without merit. Accordingly, the judgment of

15 the district court is hereby AFFIRMED. 

16

17 FOR THE COURT:

18 Catherine O’Hagan Wolfe, Clerk

19

20

21