Opinion ID: 2969369
Heading Depth: 2
Heading Rank: 1

Heading: Securities Law Claims

Text: III. The district court dismissed all of Bass’s federal and state securities law claims on the ground that the promissory notes For the foregoing reasons, we REVERSE the district Bass received were not securities. Bass appeals the dismissal court’s grant of summary judgment dismissing the plaintiff’s of the securities law claims on the ground that both the federal and state securities law claims and REMAND those promissory notes and the warrants for the purchase of claims for reconsideration, but AFFIRM the judgment of the Technigen common stock he received in exchange for the district court in all other respects. $600,000 he made to Technigen were securities as a matter of law. The district court adopted the Report and Recommendation of a United States Magistrate Judge applying the “family resemblance” test announced by the United States Supreme Court in Reves v. Ernst & Young, 494 U.S. 56 (1990), to determine that the notes were not securities. Neither the 24 Bass v. Janney Montgomery Nos. 98-6150/6226 Nos. 98-6150/6226 Bass v. Janney Montgomery 9 Scott, et al. Scott, et al. (1) It does not discharge any of the other tort-feasors Report and Recommendation nor the Order of the district from liability for the injury or wrongful death unless its court adopting it addressed the matter of the warrants, but terms so provide; but it reduces the claim against the because our review of the judgment below is de novo and others to the extent of any amount stipulated by the because we think resolution of this issue is critical to a proper release or the covenant, or in the amount of the decision in the case, we shall address it. consideration paid for it, whichever is the greater; and (2) It discharges the tort-feasor to whom it is given 1. Presence of Securities from all liability for contribution to any other tort-feasor. (b) No evidence of a release or covenant not to sue a. Promissory Notes received by another tort-feasor or payment therefor may be introduced by a defendant at the trial of an action by In a matter as fundamental to the federal securities laws as a claimant for injury or wrongful death, but may be the very definition of a security, analysis must begin with the introduced upon motion after judgment to reduce a plain language of the Securities Acts themselves. The judgment by the amount stipulated by the release or the Securities Act of 1933 defines securities as covenant or by the amount of the consideration paid for it, whichever is greater. any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in Tenn. Code Ann. § 29-11-105. This statute was rendered any profit-sharing agreement, . . . put, call, straddle, obsolete in 1992 by Tennessee’s adoption of a system of option, or privilege on any security, . . . or, in general, comparative fault. McIntyre v. Balentine, 833 S.W.2d 52 any interest or instrument commonly known as a (Tenn. 1992). However, the Tennessee Supreme Court “security”, or any certificate of interest or participation expressly retained the statutory remedy of contribution among in, temporary or interim certificate for, receipt for, tort-feasors for “cases in which prior to McIntyre the cause of guarantee of, or warrant or right to subscribe to or action arose, the suit was filed and the parties had made purchase, any of the foregoing. irrevocable litigation decisions based on pre-McIntyre law.” 15 U.S.C. § 77b(a)(1) (emphasis supplied). The definition General Elec. Co. v. Process Control Co., 969 S.W.2d 914, in the Securities Exchange Act of 1934, 15 U.S.C. 916 (Tenn. 1998). Bass’s complaint was filed in February § 78c(a)(10), is identical except that it exempts notes with a 1991; the settlement with Technigen took place in March repayment term of less than nine months; despite this subtle 1992; McIntyre was decided in May 1992. The defendants difference, the Supreme Court treats these definitions as argue that therefore they may set off the damage award functionally indistinguishable in almost all cases, Reves, 494 against them by the $350,000 Bass received from Technigen U.S. at 61 n.1. The definition includes both “any note” and in his settlement with them, pursuant to the statute. “any . . . warrant or right to subscribe to or purchase” any The defendants mischaracterize the Act, which was security. 15 U.S.C. § 78c(a)(10). intended to cover the situation in which two tort-feasors are Under the Tennessee Securities Act of 1980, “jointly or severally liable in tort for the same injury to person or property or for the same wrongful death,” but “judgment “[s]ecurity” means any note, stock, treasury stock, bond, has not been recovered against all or any of them” and one debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, 10 Bass v. Janney Montgomery Nos. 98-6150/6226 Nos. 98-6150/6226 Bass v. Janney Montgomery 23 Scott, et al. Scott, et al. . . . or, in general, any interest or instrument commonly D. Damage Award known as a “security,” or any certificate of interest or participation in, temporary or interim certificate for, Both parties appeal the amount of the damages awarded by receipt for, guarantee of, or warrant or right to subscribe the jury. In a diversity case, this court will review a jury’s to or purchase, any of the foregoing. damage award under an extremely deferential standard, not disturbing it “‘unless it manifests plain injustice, or is so Tenn. Code Ann. § 48-2-102(12). This language closely grossly excessive as to be clearly erroneous.’” Chatman v. tracks the language of the federal statutory definition. With Slagle, 107 F.3d 380, 385 (6th Cir. 1997) (citation omitted). regard to notes and warrants, the language is identical to that of the 1933 Act’s definition.
In Reves, the Supreme Court explained, with disarming candor, that for purposes of giving judicial interpretation to Bass argues that because only he presented evidence at trial the plain meaning of language employed by Congress in as to how damages ought properly to be calculated, the jury enacting a statute, that words do not always mean what they was not empowered to award damages in an amount lower say: than that which he requested. Not surprisingly, Bass was able to produce no case law to support the proposition that the jury While common stock is the quintessence of a security, was under some compulsion to accept at face value the and investors therefore justifiably assume that a sale of calculations he presented. Because the jury could quite stock is covered by the Securities Acts, the same simply properly have included in its own calculations the amount of cannot be said of notes, which are used in a variety of Bass’s settlement with Technigen or his retention of the settings, not all of which involve investments. Thus, the Technigen stock and warrants, we cannot conclude that the phrase “any note” [in the definition of security] should jury’s award was either plainly unjust or clearly erroneous on not be interpreted to mean literally “any note,” but must these grounds. be understood against the backdrop of what Congress was attempting to accomplish in enacting the Securities 2. The Defendants’ Argument Acts. The Janney defendants, for their part, argue that Tennessee Reves, 494 U.S. at 62-63 (citation omitted). law provides a statutory right to a setoff of the judgment against them by an amount equal to the settlement between The Reves Court adopted a “family resemblance” test to the plaintiff and Janney’s erstwhile codefendant, Technigen. determine whether particular notes could be classified as The relevant Tennessee statute, a section of the Uniform securities. Contribution Among Tort-feasors Act (the Act), reads as follows: The test begins with the language of the statute; because the Securities Acts define “security” to include “any (a) When a release or covenant not to sue or not to note,” we begin with a presumption that every note is a enforce judgment is given in good faith to one (1) of two security. We nonetheless recognize that this presumption (2) or more persons liable in tort for the same injury or cannot be irrebuttable. As we have said, . . . Congress the same wrongful death: was concerned with regulating the investment market, 22 Bass v. Janney Montgomery Nos. 98-6150/6226 Nos. 98-6150/6226 Bass v. Janney Montgomery 11 Scott, et al. Scott, et al. which [Bass] subsequently assert[ed],” nor did Bass appear to not with creating a general federal cause of action for act with “the intention or expectation that such conduct will fraud. be acted upon by the other party.” Janney, for its part, did not have “a lack of knowledge and an inability to learn the truth Id. at 65 (footnote omitted). “In an attempt to give more as to the facts in question; . . . reliance on [Bass’s] conduct[; content to that dividing line,” the Supreme Court, in a or] action based thereon which change[d its] position strikingly creative exercise in statutory construction identified prejudicially” with regard to Bass’s actions and omissions. the following list of notes which are not securities: notes Ratification is a doctrine unrelated to the purpose the delivered in consumer financing, notes secured by a mortgage defendants attempt to bend it to. on a home, notes secured by a lien on a small business or some of its assets, notes relating to a “character” loan to a The defendants’ arguments based on principles of waiver, bank customer, short-term notes secured by an assignment of estoppel, and ratification are entirely without merit. accounts receivables, notes which formalize an open-account indebtedness incurred in the ordinary course of business, and 3. Reliance notes given in connection with loans by a commercial bank to a business for current operations. Id. The defendants’ final argument is that Bass could not as a matter of law have relied reasonably or justifiably upon the The Court then established a four-factor framework for defendants’ investigations in connection with the bridge loan determining, first, whether a note bears a resemblance to one transaction. Under Tennessee law, “[g]enerally, a party of the identified seven instruments, and second, whether an dealing on equal terms with another is not justified in relying additional category should be added to the list. upon representations where the means of knowledge are readily within his reach.” Solomon v. First Am. Nat’l Bank of The first factor is the motivation prompting the transaction: Nashville, 774 S.W.2d 935, 943 (Tenn. Ct. App. 1989). if the seller’s motivation is “to raise money for the general use Furthermore, the defendants argue, Bass was highly of a business enterprise . . . and the buyer is interested experienced as an investor and should have known better than primarily in the profit the note is expected to generate, the to assume that Janney’s interests were aligned with his. In instrument is likely to be a ‘security.’” Id. at 66. addition, the information regarding Technigen’s reputation was as available to him as to the defendants, and Bass had his Second is the plan of distribution: if there is “‘common own attorney able to conduct any investigations Bass thought trading for speculation or investment,’” the note looks more necessary. like a security. Id. (citation omitted). This factor has historically been problematic in application; in Marine Bank Despite the defendants’ protestations, the question of v. Weaver, 455 U.S. 551 (1982), the Supreme Court held that whether Bass’s reliance was reasonable is beyond doubt a the arrangement in that case, by virtue of being a “unique question of fact for a jury to decide, and not a fit subject for agreement, negotiated one-on-one by the parties,” was not a judgment as a matter of law. This argument, too, is without security. Id. at 560. However, it is clear that paradigmatic merit. securities, such as stocks, can be offered and sold to a single person, while yet remaining securities. See Landreth Timber Co. v. Landreth, 471 U.S. 681, 692 (1985). 12 Bass v. Janney Montgomery Nos. 98-6150/6226 Nos. 98-6150/6226 Bass v. Janney Montgomery 21 Scott, et al. Scott, et al. The third factor is “the reasonable expectations of the failing to act, as to induce a belief that it was his investing public.” Reves, 494 U.S. at 66. Reasonable public intention and purpose to waive.” expectations will govern the characterization, even where the underlying economic realities belie those expectations. Id. at Brewer v. Brewer, 869 S.W.2d 928, 934 (Tenn. Ct. App. 66-67. 1993) (citations omitted). The final consideration is “whether some factor such as the The Tennessee Court of Appeals has stated that the existence of another regulatory scheme significantly reduces the risk of the instrument, thereby rendering application of the elements of equitable estoppel as related to the party Securities Acts unnecessary.” Id. at 67. In application, this estopped are (1) conduct which amounts to a false factor comprises, in addition to comprehensive regulatory representation or concealment of material facts, or schemes, the presence or absence of risk-reducing factors conduct which is calculated to convey the impression that such as collateral or insurance. Id. at 69. the facts are otherwise than, and inconsistent with, those which the party subsequently asserts; (2) the intention or Although the promissory notes received by Bass bear expectation that such conduct will be acted upon by the similarities to at least two of the enumerated categories of other party; and (3) actual or constructive knowledge of notes which are not securities—notes secured by a lien on a the real facts. The elements as related to the party small business or some of its assets, and notes given in claiming the estoppel are (1) a lack of knowledge and an connection with loans by a commercial bank to a business for inability to learn the truth as to the facts in question; (2) current operations, see id. at 65—we decline to struggle to fit reliance on the conduct of the estopped party; and (3) an atypical peg into a standardized hole when the Supreme action based thereon which changes his position Court has provided, in its four-factor test, a tool for custom prejudicially. fitting. Aussenberg v. Kramer, 944 S.W.2d 367, 371 (Tenn. Ct. App. Applying the Supreme Court’s test, the first factor is a 1996). washout, since the motivation prompting the transaction on Technigen’s end is one typical in commercial loan Finally, in Tennessee, “[a] ratification occurs when the transactions, that is, an effort to raise interim funds to launch party, knowing all the facts necessary to form an opinion, a new enterprise, but from Bass’s perspective looks more like deliberately assents to be bound.” Yearby v. Shannon, No. a transaction for profit. The second factor, the plan of 03A01-9509-CV-00345, 1996 WL 87446, at  (Tenn. Ct. distribution, tilts against the notes being securities, since the App. Feb. 29, 1996). In general it is a principle of agency, transaction was unique, negotiated with a single buyer and whereby one person assents explicitly or implicitly to be negotiated term by term, rather than being offered in a bound by the actions of another. wholesale or potentially wholesale fashion. The third factor is again largely a washout, since the reasonable expectation of None of Bass’s actions or omissions complained of are the investing public would normally be that bridge loans are such “as to induce a belief that it was his intention and not securities, and yet, as Bass points out repeatedly, the term purpose to waive.” Similarly, the acts and omissions do not sheet for the transaction prepared by Janney—probably a form amount to “a false representation or concealment of material document usually used in venture financings—referred to the facts, or conduct which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those 20 Bass v. Janney Montgomery Nos. 98-6150/6226 Nos. 98-6150/6226 Bass v. Janney Montgomery 13 Scott, et al. Scott, et al. arguable that he qualified as a Technigen insider, and as such notes under the rubric of securities. The fourth factor again was prevented by the securities laws from selling Technigen mitigates against these notes being securities, since, as stock without disclosing his knowledge of Technigen’s true applied in Reves, the existence of collateral is significant as a worth. Finally, even if he was not absolutely barred from risk-reducing factor, and these notes were heavily secured by selling the stock, the mitigation rule does not require parties the assets of both Technigen and Joytec, Technigen and to unload junk stock on unwitting investors. Joytec stock, and Joytec’s guarantee. 2. Waiver, Estoppel, and Ratification For these reasons, obedience to the Supreme Court’s balancing formula in Reves requires that we affirm the district The defendants’ second theory to explain why Bass should court’s conclusion that the notes were not securities as a not be permitted to recover against them is based on matter of law. principles of waiver, estoppel, and ratification. The defendants argue that Bass’s own conduct prevents him from b. Warrants complaining about the transaction. First, Bass knew that Technigen’s president was under investigation at the time he However, with regard to the warrants which were included extended the first bridge loan. Second, he knew that Nesis in the transaction as an additional means of enticing Bass into had entered into a consent decree with the BCSC at a commitment, a different conclusion is called for. The approximately the time he extended the second bridge loan, Janney defendants argue that in the context of a commercial and yet did not at that time seek rescission of the transaction. loan, warrants issued secondarily to the underlying loan Third, he did not bring suit against the defendants until nearly transaction are not to be considered securities; essentially, this six months after the failure of the Technigen private is a version of the “underlying economic reality” approach to placement. Fourth, despite his concerns over Technigen’s securities transactions. The only authority cited for this reputation, Bass sought to retain and did retain shares of proposition is Rispo v. Spring Lake Mews, Inc., 485 F. Supp Technigen stock after the failure of the Technigen offering 462 (E.D. Pa. 1980); our own independent research reveals no and as part of his settlement with Technigen. Fifth, the failure supporting precedent from this circuit. In Rispo, the district to sell the Technigen shares or to exercise the warrants itself court held that a promise, made incidental to a commercial amounted to a ratification of the underlying transaction. In loan transaction, to deliver three shares of stock was not the sum, the argument amounts to a statement that one who sale or purchase of a security. Id. at 466. Overlooking for the retains the benefits of a transaction should not be permitted to moment that this court is under no obligation to follow the complain about it. decision of a district court from outside the Sixth Circuit, the holding in Rispo was dubious in 1980, in light of the plain This argument must be addressed in light of Tennessee law. language of the definition section of both federal Securities In Tennessee, Acts, and increasingly so after 1985, when the Supreme Court decided that stock is a security per se, regardless of the [w]aiver is a voluntary relinquishment or renunciation of particular circumstances in which it changes hands, and a known right. “It may be proved by express declaration; further that an investment contract analysis was not applicable or by acts and declarations manifesting an intent and to transactions involving paradigmatic securities. Landreth purpose not to claim the supposed advantage; or by a Timber, 471 U.S. at 696-97. course of acts and conduct, or by so neglecting and 14 Bass v. Janney Montgomery Nos. 98-6150/6226 Nos. 98-6150/6226 Bass v. Janney Montgomery 19 Scott, et al. Scott, et al. An analysis that departs from the plain language of the 1. Failure to Mitigate statutory definition in order to give effect to the apparent underlying intentions of the parties to a transaction is an First, claiming that there was insufficient evidence to inappropriate application of judicial authority and flies in the support the verdict for the plaintiff, Janney argues that Bass face of the fundamental purposes for which the federal unjustifiably failed to mitigate his damages by attempting to securities laws were drafted. Indeed, of predominant exercise his stock warrants, even at a time when the market importance is not whether a particular transaction ideally price of Technigen stock was sufficiently high that his profits should invoke the protections of the securities laws, but rather on sale would have exceeded $2 million. the certainty enjoyed by the transacting parties that the protections of those laws may be extended to every exchange Janney is correct that, under Tennessee law, involving securities. The Securities Acts define warrants as securities no matter what the context in which they change [g]enerally, one who is injured by the wrongful or hands and put parties on notice that the securities laws will negligent act of another, whether by tort or breach of apply to any exchange of warrants. If the parties do not wish contract, is bound to exercise reasonable care and the securities laws to apply to a given transaction, they need diligence to avoid loss or to minimize or lessen the only structure it as a straight loan. A contrary rule would be resulting damage, and to the extent that his damages are little more than an invitation to litigation: How important a the result of his active and unreasonable enhancement role would the warrants need to play in a transaction for them thereof, or due to his failure to exercise such care and to rise to the level of securities? This is not the sort of diligence, he cannot recover. question this court has any mandate, or any inclination, to address. Cook & Nichols, Inc. v. Peat, Marwick, Mitchell & Co., 480 S.W.2d 542, 545 (Tenn. Ct. App. 1971). However, to note We believe that the district court erred as a matter of law in that Bass should have made efforts to mitigate where possible dismissing all of Bass’s securities law claims on the ground is a far cry from demonstrating that he had an opportunity to that the promissory notes were not securities. The notes do so and squandered it. Warrants for the purchase of themselves were not securities, but the loan transaction also unregistered stock cannot be exercised on a moment’s notice. involved the exchange of warrants, which are securities in First, Bass would have had to inform Technigen of his desire whatever context they change hands. to exercise, and paid the exercise price. Second, he would have had to request that Technigen register the converted 2. Reversible Error shares, an expensive and time-consuming process, and one Technigen might have balked at entering into on behalf of an Janney argues forcefully that even if the district court opposing party in a lawsuit. Third, he would then have had to committed error in holding that the warrants were not sell the shares. It is probable that the attempt to sell so many securities, the error was necessarily harmless—at least with shares at once would have had an immediate effect on the regard to the securities fraud counts—in light of the jury market price for Technigen common stock, especially given verdict which did not find the defendants liable for intentional the volatility it had demonstrated during the period in or reckless misrepresentation. We acknowledge that the question. There is therefore no reason to believe that Bass essential elements of fraud under the securities laws closely would have been able to sell his shares for $2 million even track those for common law fraud. See Ockerman v. May had he tried. In addition, as Bass pointed out at trial, it is 18 Bass v. Janney Montgomery Nos. 98-6150/6226 Nos. 98-6150/6226 Bass v. Janney Montgomery 15 Scott, et al. Scott, et al. Similarly, the court’s refusal to permit the plaintiff’s Zima & Co., 27 F.3d 1151, 1156 (6th Cir. 1994). However, securities law expert to testify was not an abuse of discretion. we are not persuaded that the structural similarity between the Bass complains that his case for common law fraud was two causes of action is necessarily dispositive of the dispute prejudiced by the fact that the jury was never permitted to in this case. hear testimony regarding Janney’s affirmative, statutory duty of due diligence. In fact, that duty had no impact on the cause Although the essential elements of common law and of action for common law fraud. securities fraud are the same, the securities laws impose a special duty on underwriters to perform a so-called “due The securities laws are relevant to the bridge loan diligence” investigation of the issuer of any securities they transaction solely by virtue of the presence of the Technigen underwrite. Because the securities laws properly apply to the warrants, which were included as consideration for the bridge bridge loan transaction as a result of the exchange of warrants loans Bass extended to Technigen. These warrants were not with the promissory notes, and because Janney was the lead warrants for the purchase of the securities Janney was underwriter for the private placement of Technigen securities underwriting, but rather for previously issued Technigen for which the loans were a bridge financing, Janney was under common stock. Therefore, with regard to the warrants whose a statutorily imposed duty to perform due diligence on presence in the transaction invoked the federal and state Technigen and Joytec. The jury below was not instructed as securities laws, Janney was not an underwriter, and therefore to Janney’s duty of due diligence. We therefore decline to owed no duty to Bass arising out of the securities laws. accept Janney’s invitation to treat the error as harmless as a matter of law. With regard to the Technigen offering for which the Bass loans were a bridge financing, Janney was an underwriter. As 3. The Plaintiff’s Motion for Summary Judgment an underwriter, Janney owed a duty of due diligence to Technigen but not, we are satisfied, to Bass, because Bass had Bass argues that it is he, rather than the defendants, who is no direct involvement in that offering. Any duty Janney owed entitled to judgment as a matter of law on at least two of his to Bass arose not from the securities laws but rather from securities law claims, namely, the violation of Section 10(b) Janney’s role in soliciting Bass’s participation in the of the Securities Exchange Act of 1934 and that of Section 21 transaction. The jury knew that Janney solicited Bass’s of the Tennessee Securities Act of 1980. He alleges that the participation when it found that Janney lacked intent to Janney defendants omitted to supply material information defraud. which reasonable minds could not disagree would influence his decision to accept the Technigen securities. First, the Bass has failed to demonstrate sufficient evidence of Janney defendants internally circulated a memo stating their prejudice against his case to warrant a finding that the district belief that the private placement of Technigen securities that judge abused his discretion in excluding the specified they were underwriting would not be successful unless the evidence. price of Technigen common stock rebounded from approximately $1.50 to $2.50; it had dropped to $1.50 from C. Jury Verdict on Common Law Fraud a recent high of around $15.00. This memo was not provided to Bass. Second, the defendants failed to disclose the The defendants cross-appeal the jury verdict on common contents of the negative newspaper articles regarding law fraud, advancing a number of theories as to why Bass Technigen, although Bass acknowledges that the defendants should not have been permitted to prevail at trial. 16 Bass v. Janney Montgomery Nos. 98-6150/6226 Nos. 98-6150/6226 Bass v. Janney Montgomery 17 Scott, et al. Scott, et al. were not aware of the contents of these articles. Third, the B. Evidentiary Rulings defendants delayed disclosure of the fact that Technigen’s president had been banned from the Vancouver Stock Bass complains that the district court prevented him from Exchange. introducing some of his evidence regarding Technigen’s reputation as a “scam company.” He argues that his common In addition, Bass claims that the remaining elements of a law fraud case was prejudiced because he was not permitted claim under either anti-fraud provision have been met as a to demonstrate the extent and ubiquity of Technigen’s poor matter of law; those elements are scienter, reasonable reputation. He complains further that his own expert witness reliance, and loss causation. Bass would have it that the was excluded from testifying, and that the defendants’ expert omissions enumerated above are reckless per se, and relies on witness was permitted to testify as to the industry standard of presumptions he describes as irrebuttable to demonstrate care for underwriters with regard to bridge loan participants, reliance and causation. again, with prejudicial effect to his common law fraud case. We are not persuaded by the plaintiff’s reasoning. This court reviews evidentiary rulings of the kind “Summary judgment is appropriate only when there is no complained of here for abuse of discretion only, and “we will genuine issue of material fact and the moving party is entitled not reverse a judgment unless we believe that errors at trial to judgment as a matter of law. Moreover, the court is to had a substantial effect on the final result.” In re Air Crash construe the evidence and all inferences to be drawn from it Disaster, 86 F.3d 498, 532-33 (6th Cir. 1996). In general, in the light most favorable to the nonmoving party.” Kraus v. Sobel Corrugated Containers, Inc., 915 F.2d 227, 229 (6th [a]lthough relevant, evidence may be excluded if its Cir. 1990) (citations omitted). Here, issues of material fact probative value is substantially outweighed by . . . abound. With regard first to the alleged omissions, Janney considerations of undue delay, waste of time, or needless produced testimonial evidence at trial disputing the presentation of cumulative evidence. materiality of the undisclosed facts. Construing this testimonial evidence in the light most favorable to Janney, Fed. R. Evid. 403. Bass’s motion could not have been granted by the district court. Similarly, the Janney defendants dispute the In this case, the district judge was within his discretion to recklessness of the alleged omissions, creating another determine that admission of the entire corpus of negative genuine issue of material fact. Finally, Bass has not even articles would be cumulative, redundant, and a waste of time. proven what portion, if any, of the $600,000 purchase price he The point that Technigen had an easily ascertainable paid for the $600,000 interest-bearing promissory notes and reputation as a shady operation could easily be made with the the stock purchase warrants could properly be allocated to the introduction of only a small number of articles, and indeed warrants, let alone that any of his financial losses arose from was a fact not really contested by the defendants. To have his purchase of the warrants. permitted a dead horse to be flogged at great length in the jury’s presence would not merely have wasted judicial time In short, because genuine issues of material fact remain, and resources; it also would have risked prejudicing the jury Bass was not entitled to judgment as a matter of law, and we well beyond the intrinsic probative value of the evidence. will therefore not disturb the judgment of the district court in The district judge did not abuse his discretion in excluding this respect. some of the negative articles.