09-3487-cv

Vladimir v. Bioenvision, Inc.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER

RULI NGS BY SUMMARY ORD ER DO NOT HAVE PRE CED ENT IAL EF FEC T . C ITA TIO N T O ASUMMARY ORD ER FIL ED ON OR AFT ER JANUARY 1, 2007, IS PE RMI TTE D AND IS GOV ERN ED BY F EDE RAL RULE OF A PPE LLA TE P ROC EDU RE 32.1 AND THI S C OUR T ’ S L OCA L RULE 32.1.1. W HEN C ITI NG A SUMMAR Y ORD ER IN A DOC UME NT FIL ED WIT H T HIS CO URT , A PART Y MUS T C ITE EI THE R T HE F EDE RAL A PPE NDI X O R AN ELE CTR ONI C D ATABAS E ( WIT H T HE NOT ATI ON “ SUMMAR Y O RDE R ”). APARTY CI TIN G ASUMMARY ORD ER MUS T S ERV E ACO PY OF IT ON ANY PARTY NO T R EPR ESE NTE D B Y C OUN SEL . 

### 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. 

### 33Plaintiff 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 defendants

### 18 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 discloseRelying on allegations from a separate state court 2 action, plaintiff also alleged that defendants unlawfully failed to disclose a January 2007 “secret[]” mergeragreement 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 defendants

### 11 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 notAlthough 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 control

### 11 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