Five major public pension funds jointly filed an amicus brief in Dura Pharmaceuticals vs. Broudo, a pending U.S. Supreme Court securities fraud case. They are: the $177.8 billion California Public Employees' Retirement System, Sacramento; the $118.7 billion California State Teachers' Retirement System, Sacramento; the $74 billion New York City Retirement Systems; the $26 billion Los Angeles County Employees' Retirement Association, Pasadena, Calif.; and Alan Hevesi, New York state comptroller, on behalf of the $118 billion New York State Common Retirement Fund. "The five funds aren't a direct party to the litigation, but they filed the brief to make arguments clear on the public's vested interest in the outcome of this case," said a spokesman for Grant & Eisenhofer, the law firm representing the five funds.
The Supreme Court is scheduled to hear arguments in the case on Jan. 12. "The 9th Circuit (Court of Appeals) had reversed an earlier trial ruling dismissing a fraud case brought by a group of investors for failing to prove that a drop in the price of Dura stock could be attributed to the company's coverups over (a Food and Drug Administration) decision not to approve one of its products," according to a statement from Grant & Eisenhofer.
The Supreme Court case "hinges on the causal relationship between an alleged investment fraud and any subsequent decline in value of that investment," the statement said. "The pension funds argue that the standard used in Dura is far too narrow and if adopted as precedent will severely restrict the rights of shareholders to bring ... securities actions against companies committing fraud."
Anita Kawatra, vice president-global media relations at Elan, which merged with Dura in 2001, couldn't be reached for comment. William F. Sullivan, a partner in the law firm of Paul, Hastings, Janofsky & Walker, who represents Dura, said he wouldn't be available to comment until after publication deadline because of meetings.