City of Livonia Employees’ Retirement System v. The Boeing Co.
United States Court of Appeals for the Seventh Circuit
711 F.3d 754 (2013)
The Boeing Company (Boeing) (defendant) developed a new plane. It accepted preorders before the plane had actually made its first flight, which was scheduled for June 30, 2009. On April 21, 2009, the new plane’s wings failed a stress test. Despite this, on May 3 Boeing announced that the results of the test had been positive, but that Boeing had at that point not fully analyzed the data. After the wings failed another test later in May, Boeing’s CEO, McNerney (defendant), stated that he thought the plane would fly as planned on June 30. In June, another Boeing executive, Carson (defendant), told a news organization that the plane “definitely” would fly that month. On June 23, 2009, Boeing announced a delay of the plane’s first flight. After the announcement, Boeing stock declined by more than 10 percent. The plane flew for the first time in December 2009. The City of Livonia Employees’ Retirement System and others who had bought Boeing stock between May 4 and June 22, 2009 (plaintiffs) brought a class action suit against Boeing. The plaintiffs alleged that Boeing had committed securities fraud in violation of Section 10(b) of the Securities Act of 1934. The complaint included information from engineer Bishnujee Singh, suggesting that McNerney and Carson knew the plane would not fly as scheduled when they made their statements. The district court rejected Boeing’s motion to dismiss the complaint. However, a Boeing investigation then discovered that many of the complaint’s allegations that relied on Singh’s statements were false or embellished. The district court reconsidered the denial and granted Boeing’s motion to dismiss based on this new information. The plaintiffs appealed, and Boeing cross-appealed for Rule 11 sanctions.
Rule of Law
Holding and Reasoning (Posner, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 173,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,000 briefs, keyed to 188 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.