Opt‑Out Case Against Deloitte & Touche Dismissed

On August 31, 2010, the United States District Court for the Southern District of New York granted a motion to dismiss an opt-out case in favor of Cravath client Deloitte & Touche LLP. The plaintiff, who had sold cable systems to Adelphia Communications Corporation (“Adelphia”) in exchange for Adelphia stock, alleged violations of Section 10(b) and Section 18 and common law fraud, constructive fraud and aiding and abetting based upon Deloitte’s allegedly faulty audits of Adelphia. The Court dismissed the Section 10(b) claim for failure to plead scienter and loss causation; dismissed the Section 18 claim for failure to plead reliance and loss causation; and dismissed the common law claims as preempted by Securities Litigation Uniform Standards Act (SLUSA).

The Cravath team was led by partner Max R. Shulman and included senior attorney James E. Canning and associates Rebecca Rettig, Scott S. Bernstein and James W. Carlson.