Not a Bankruptcy case, but relevant to corporate and shareholder litigation:
KITTIE LAPERRIERE, Class certification, to consist of all persons who acquired the publicly traded equity securities of Vesta Insurance Group, Inc., between June 2, 1995, and June 28, 1998, inclusive (the “Class Period”). Excluded from the class, ISRAEL BURGER, RICHARD SULLIVAN, POINTERS, THE CLEANERS & CAULKERS LOCAL 1 PENSION FUND, FLORIDA STATE BOARD OF ADMINISTRATION
VESTA INSURANCE GROUP, INC., et al., TORCHMARK CORPORATION,
No. 06-14524 (April 30, 2008) (Click here for opinion).
This interlocutory appeal presents an issue of first impression in the circuit courts: whether, and to what extent, the proportionate liability scheme of section 21(D)(f) of the Securities Exchange Act of 1934 (the “Act”),1 enacted as part of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), amends section 20(a) of the Act, under which a person who controls a violator of the Act is “liable jointly and severally with and to the same extent” as that violator.
We conclude that section 20(a) controlling person liability survives section 21(D)(f)’s proportionate liability scheme. Those who would have been substantively liable as controlling person under section 20(a) before the PSLRA was enacted will be substantively liable after its enactment. All that the PSLRA has changed for controlling persons is the standard for deciding whether their responsibility for damages is joint and several or proportionate. Damages are now allocated based on the proportionate liability provisions in the PSLRA, including the provision that knowing violators of the securities laws are “liable for damages jointly and severally.” The district court’s order denying Appellants’ motion to strike Torchmark’s PSLRA-based affirmative defenses is AFFIRMED.