Fed. Sec. L. Rep. P 96,820 William Weiss v. Mark Wittcoff, Edward Wittcoff, & Wittcoff Paper Co., Inc., 966 F.2d 109 (2d Cir. 1992). · Go Syfert
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Fed. Sec. L. Rep. P 96,820 William Weiss v. Mark Wittcoff, Edward Wittcoff, & Wittcoff Paper Co., Inc., 966 F.2d 109 (2d Cir. 1992). Cases Citing This Book View Copy Cite
69 citation events (39 in the last 25 years) across 8 distinct courts.
Strongest positive: Marini v. Adamo (nyed, 2014-02-06)
Treatment trajectory · 1993 → 2026 · click a year to view as-of
1993 2009 2026
Statutes interpreted (leading-cases list)
#19 15 U.S.C. § 783 cited 1× in this case · 131 total citations of statute
Top citers, strongest first. 45 distinct citers. How cited ↗
cited Cited as authority (rule) Marini v. Adamo
E.D.N.Y · 2014 · confidence medium
Corp., 801 F.2d 13 , 22 (2d Cir.1986) and Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992), aff'd sub nom.
discussed Cited as authority (rule) ATSI Communications, Inc. v. Shaar Fund, Ltd. (2×) also: Cited "see"
2d Cir. · 2007 · confidence medium
When the defendant sold his other company a year after the transaction, id. at 110, 112 , the plaintiffs business suffered subsequent losses from higher costs, id. at 110-11 .
discussed Cited as authority (rule) In Re Parmalat Securities Litigation
S.D.N.Y. · 2007 · confidence medium
Inc. v. Altai, Inc., 126 F.3d 365, 369 (2d Cir.1997). [60] Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992). [61] See Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 346-47 , 125 S.Ct. 1627 , 161 L.Ed.2d 577 (2005) (assuming without deciding that Rule 8(a) applies to allegations of economic loss and indicating that a plaintiff need only "provide a defendant with some indication of the loss"); see also Hunt v. Enzo Biochem, Inc., 471 F.Supp.2d 390 , 409 n. 120 (S.D.N.Y. 2006) (collecting post- Dura cases applying Rule 8 to allegations of loss causation). [62] Ctrclm. ¶¶ 375, 378. [63] Bank Mem. …
cited Cited as authority (rule) Bondi v. Bank of America Corp.
S.D.N.Y. · 2007 · confidence medium
Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992). .
cited Cited as authority (rule) Jowers v. LAKESIDE FAMILY AND CHILDREN'S SERVICES
S.D.N.Y. · 2006 · confidence medium
Conley v. Gibson, 355 U.S. 41, 45-46 , 78 S.Ct. 99 , 2 L.Ed.2d 80 (1957); Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992).
discussed Cited as authority (rule) Collins v. Olin Corp.
D. Conn. · 2006 · confidence medium
Dismissal is not warranted unless “it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46 , 78 S.Ct. 99 , 2 L.Ed.2d 80 (1957); Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992).
discussed Cited as authority (rule) In Re Initial Public Offering Securities Lit. (2×) also: Cited "see, e.g."
S.D.N.Y. · 2005 · confidence medium
See, e.g., First Nationwide Bank v. Gelt Funding Co., 27 F.3d 763 , 769-70 (2d Cir.1994) (recognizing "foreseeability" approach, but relying on "direct causation" analysis for loss causation); Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992) (per curiam) (following "foreseeability" approach); Mfrs.
examined Cited as authority (rule) Liu v. Credit Suisse First Boston Corp. (3×) also: Cited "see", Cited "see, e.g."
S.D.N.Y. · 2005 · confidence medium
See, e.g., First Nationwide Bank v. Gelt Funding Co., 27 F.3d 763 , 769-70 (2d Cir.1994) (recognizing “foreseeability” approach, but relying on “direct causation” analysis for loss causation); Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992) (per curiam) (following “foreseeability” approach); Mfrs.
discussed Cited as authority (rule) DeMarco v. Lehman Brothers, Inc.
S.D.N.Y. · 2004 · confidence medium
Dec.31, 2003)(allegations of artificial inflation without more insufficient for loss causation purposes); Weiss v. Writcoff, 966 F.2d 109, 111 (2d Cir.1992)(ex-plaining that central question is “was the damage complained of a foreseeable result of the plaintiffs reliance on the fraudulent misrepresentation?”).
cited Cited as authority (rule) In Re Luxottica Group S.P.A., Securities Litigation
E.D.N.Y · 2003 · confidence medium
Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992); Suez Equity Investors, L.P. v. Toronto-Dominion Bank, 250 F.3d 87, 95 (2d Cir.2001).
discussed Cited as authority (rule) In Re WorldCom, Inc. Securities Litigation
S.D.N.Y. · 2003 · confidence medium
In assessing loss causation allegations, courts ask “was the damage complained of a foreseeable result of the plaintiffs reliance on the fraudulent misrepresentation?” Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992) (citation omitted).
discussed Cited as authority (rule) In Re Sterling Foster & Co., Inc. Securities Lit.
E.D.N.Y · 2002 · confidence medium
Although the Second Circuit has set forth “somewhat inconsistent precedents on loss causation,” Suez Equity Investors, 250 F.3d at 98 n. 1 (citing First Nationwide Bank v. Gelt Funding Co., 27 F.3d 763, 769-70 (2d Cir.1994); Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992) (per curiam); Mftrs.
discussed Cited as authority (rule) In Re Sterling Foster & Co., Inc., Securities Lit.
E.D.N.Y · 2002 · confidence medium
The Second Circuit has set forth “somewhat inconsistent precedents on loss causation,” Suez Equity Investors, 250 F.3d at 98 n. 1 (citing First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763, 769-70 (2d Cir.1994)); Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992) (per curiam); Mfrs.
discussed Cited as authority (rule) Roer v. Oxbridge Inc.
E.D.N.Y · 2001 · confidence medium
It is well settled that “[a] statement cannot be fraudulent [under Rule 10b — 5] if it did not affect an investment decision of the plaintiff.” Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir.1993) (citing Burke v. Jacoby, 981 F.2d 1372, 1378 (2d Cir.1992) (a 10b-5 plaintiff must demonstrate that he relied on the defendant’s false statements when he entered the transaction, cert, denied, 508 U.S. 909 , 113 S.Ct. 2338 , 124 L.Ed.2d 249 (1993)); Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992) (the plaintiff must show that the defendant’s misrepresentations caused the plai…
discussed Cited as authority (rule) Suez Equity Investors, L.P. v. Toronto-Dominion Bank (2×) also: Cited "see"
2d Cir. · 2001 · confidence medium
See, e.g., First Nationwide Bank v. Gelt Funding Co., 27 F.3d 763, 769-70 (2d Cir.1994) (recognizing "foreseeability” approach, but relying on "direct causation” analysis for loss causation); Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992) (per curiam) (following "foreseeability” approach); Mfrs.
discussed Cited as authority (rule) Suez Equity Investors, L.P. v. The Toronto-Dominion Bank (2×) also: Cited "see"
2d Cir. · 2001 · confidence medium
See, e.g., First Nationwide Bank v. Gelt Funding Co., 27 F.3d 763, 769-70 (2d Cir. 1994) (recognizing "foreseeability" approach, but relying on "direct causation" analysis for loss causation); Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir. 1992) (per curiam) (following "foreseeability" approach); Mfrs.
discussed Cited as authority (rule) In Re MCI Worldcom, Inc. Securities Litigation (2×)
E.D.N.Y · 2000 · confidence medium
Mar. 18, 1999) (quoting Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992)).
discussed Cited as authority (rule) Winkler v. NRD Mining, Ltd.
E.D.N.Y · 2000 · confidence medium
“Whether loss causation has been [established] turns upon a question of proximate cause: was the damage complained of a foreseeable result of the plaintiffs reliance on the fraudulent misrepresentation?” Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992).
discussed Cited as authority (rule) Production Resource Group, L.L.C. v. Stonebridge Partners Equity Fund, L.P.
S.D.N.Y. · 1998 · confidence medium
See Luce v. Edelstein, 802 F.2d 49, 55 (2d Cir.1986) (“making a specific promise to perform a particular act in the future while secretly intending not to perform that act may violate Section 10(b) where the promise is part of. the consideration for the transfer of securities”); Pross v. Katz, 784 F.2d 455, 457 (2d Cir.1986) (same); Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir. 1992) (misrepresentation that defendants would supply plaintiff with goods in the future was an “important inducement in persuading” plaintiff to sell his stock); Sulkow v. Crosstom Apparel Inc., 807 F.2d 33, 34…
discussed Cited as authority (rule) Unterberg Harris Private Equity Partners, L.P. v. Xerox Corp.
S.D.N.Y. · 1998 · confidence medium
“In other words, the plaintiff must show that the defendant’s misrepresentations not only caused the plaintiff to engage in the transaction in question, but also that they caused the harm suffered.” Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992) (per curiam); see also, Wilson v. Ruffa & Hanover, P.C., 844 F.2d 81, 85 (2d Cir.1988) (“loss causation” means that the “misrepresentation or omission caused the economic harm”), rev’d on other grounds sub nom, Wilson v. Saintine Exploration & Drilling Corp., 872 F.2d 1124 (2d Cir.1989).
discussed Cited as authority (rule) Velez v. City of New London
D. Conn. · 1995 · confidence medium
Dismissal is not warranted unless “it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46 , 78 S.Ct. 99, 101-102 , 2 L.Ed.2d 80 (1957); Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992).
discussed Cited as authority (rule) Oscar Productions, Inc. v. Zacharius
S.D.N.Y. · 1995 · confidence medium
Transit Authority, 941 F.2d 119, 123 (2d Cir.1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 , 78 S.Ct. 99, 102 , 2 L.Ed.2d 80 (1957)). “[T]he court’s task on a Rule 12(b)(6) motion is not to rule on the merits of plaintiffs’ claims, but to decide whether, presuming all factual allegations of the complaint to be true, and drawing all reasonable inferences in the plaintiffs favor, the plaintiff could prove any set of facts which would entitle him to relief.” Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992) (citations omitted).
discussed Cited as authority (rule) Fludgate v. Management Technologies, Inc.
S.D.N.Y. · 1995 · confidence medium
For example, “the court’s task on a Rule 12(b)(6) motion is not to rule on the merits of plaintiffs’ claims, but to decide whether, presumrng all factual allegations of the complaint to be true, and drawing all reasonable inferences in the plaintiff’s favor, the plaintiff could prove any set of facts which would entitle him to relief.” Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992) (citations omitted).
discussed Cited as authority (rule) Patrick v. Francis
W.D.N.Y. · 1995 · confidence medium
“The court’s task on a Rule 12(b)(6) motion is not to rule on the merits of plaintiffs’ claims, but to decide whether, presuming all factual allegations in the complaint to be true, and drawing all reasonable inferences in the plaintiff’s favor, the plaintiff could prove any set of facts which would entitle him to relief.” Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992) (citations omitted).
discussed Cited as authority (rule) Berman v. Turecki
S.D.N.Y. · 1995 · confidence medium
Transit Authority, 941 F.2d 119, 123 (2d Cir.1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 , 78 S.Ct. 99, 102 , 2 L.Ed.2d 80 (1957)). “[T]he court’s task on a Rule 12(b)(6) motion is not to rule on the merits of *532 plaintiffs’ claims, but to decide whether, presuming all factual allegations of the complaint to be true, and drawing all reasonable inferences in the plaintiffs favor, the plaintiff could prove any set of facts which would entitle him to relief.” Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992) (citations omitted).
discussed Cited as authority (rule) AD/SAT, a Division of Skylight, Inc. v. Associated Press
S.D.N.Y. · 1995 · confidence medium
Transit Authority, 941 F.2d 119, 123 (2d Cir.1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 , 78 S.Ct. 99, 102 , 2 L.Ed.2d 80 (1957)). “[T]he court’s task on a Rule 12(b)(6) motion is not to rule on the merits of plaintiffs’ claims, but to decide whether, presuming all factual allegations of the complaint to be true, and drawing all reasonable inferences in the plaintiff’s favor, the plaintiff could prove any set of facts which would entitle him to relief.” Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992) (citations omitted).
discussed Cited as authority (rule) Preferred Physicians Mutual Risk Retention Group v. Cuomo
S.D.N.Y. · 1994 · confidence medium
Transit Authority, 941 F.2d 119, 123 (2d Cir.1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 , 78 S.Ct. 99, 102 , 2 L.Ed.2d 80 (1957)). “[T]he court’s task on a Rule 12(b)(6) motion is not to rule on the merits of plaintiffs’ claims, but to decide whether, presuming all factual allegations of the complaint to be true, and drawing all reasonable inferences in the plaintiffs favor, the plaintiff could prove any set of facts which would entitle him to relief.” Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992) (citations omitted).
discussed Cited as authority (rule) Warnaco Inc. v. VF Corp.
S.D.N.Y. · 1994 · confidence medium
Facts On a motion to dismiss, all of the factual allegations in a complaint are accepted as true, Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992); Ades v. Deloitte & Touche, 1993 WL 362364 at *3,1993 U.S.Dist.
discussed Cited as authority (rule) Urashka v. Griffin Hospital
D. Conn. · 1994 · confidence medium
Dismissal is not warranted unless “it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle him to relief.” Conley v. Gibson, 366 U.S. 41 , 45-46, 78 S.Ct. 99, 101-102 , 2 L.Ed.2d 80 (1957); Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992).
discussed Cited as authority (rule) In Re Integrated Resources Real Estate Ltd. Partnerships Securities Litigation (2×)
S.D.N.Y. · 1994 · confidence medium
“In other words, the plaintiff must show that the defendant’s misrepresentations not only caused the plaintiff to engage in the transaction in question, but also that they caused the harm suffered.” Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir. 1992) (per curiam); see also Wilson v. Ruffa & Hanover, P.C., 844 F.2d 81, 85 (2d Cir. 1988) (holding “loss causation” means that the “misrepresentation or omission caused the economic harm”), aff'd on recons, sub nom., Wilson v. Saintine Exploration & Drilling Corp., 872 F.2d 1124 (2d Cir.1989).
discussed Cited as authority (rule) In Re American Express Co. Shareholder Litigation
S.D.N.Y. · 1993 · confidence medium
RICO CLAIM The RICO Defendants move this Court to dismiss the claim against them pursuant to *263 Fed.R.Civ.P. 12(b)(6). “[T]he court’s task on a Rule 12(b)(6) motion is not to rule on the merits of plaintiffs’ claims, but to decide whether, presuming all factual allegations of the complaint to be true, and drawing all reasonable inferences in the plaintiffs favor, the plaintiff could prove any set of facts which would entitle him to relief.” Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992) (citations omitted).
discussed Cited as authority (rule) Mills v. Polar Molecular Corp.
2d Cir. · 1993 · confidence medium
See Burke v. Jacoby, 981 F.2d 1372, 1378 (2d Cir.1992) (a 10b-5 plaintiff must demonstrate that he relied on the defendant’s false statements when he entered the transaction), cert. denied, — U.S. -, 113 S.Ct. 2338 , 124 L.Ed.2d 249 (1993); Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992) (the plaintiff must show, that the defendant’s misrepresentations caused the plaintiff to invest).
discussed Cited as authority (rule) William L. Mills v. Polar Molecular Corporation, Otis L. Nelson, Mark L. Nelson, A. Richard Nelson, James E. Larson, Eugene Zwoyer, Kenneth A. Roe and Thomas Ryan, Chester J. Walsh, Ronald L. Krumm, T v. Miles and Joseph Mello v. Polar Molecular Corporation, Otis L. Nelson, Mark L. Nelson, A. Richard Nelson, James E. Larson and Eugene Zwoyer
2d Cir. · 1993 · confidence medium
See Burke v. Jacoby, 981 F.2d 1372, 1378 (2d Cir.1992) (a 10b-5 plaintiff must demonstrate that he relied on the defendant's false statements when he entered the transaction), cert. denied, --- U.S. ----, 113 S.Ct. 2338 , 124 L.Ed.2d 249 (1993); Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992) (the plaintiff must show that the defendant's misrepresentations caused the plaintiff to invest).
discussed Cited as authority (rule) Johnson v. Meachum
D. Conn. · 1993 · confidence medium
Dismissal is not warranted unless “it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46 , 78 S.Ct. 99, 102 , 2 L.Ed.2d 80 (1957); Weiss v. Writcoff, 966 F.2d 109, 112 (2d Cir.1992).
cited Cited as authority (rule) Aquino v. Trupin
S.D.N.Y. · 1993 · confidence medium
Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992).
discussed Cited as authority (rule) Earl Lee and David Abramson v. Richard Burkhart and Patrick Sullivan, Connecticut General Life Insurance Company
2d Cir. · 1993 · confidence medium
DISCUSSION In reviewing the district court’s denial of leave to file the Proposed Complaint, and the resulting dismissal of the action, we must decide whether, “presuming all factual allegations of the complaint as true, and drawing all reasonable inferences in the plaintiffs’] favor, the plaintiffs] could prove any set of facts which would entitle [them] to relief.” Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992) (citations omitted).
discussed Cited "see" Doubleline Capital LP v. Odebrecht Fin., Ltd.
S.D. Ill. · 2018 · signal: accord · confidence high
"It is long settled that a securities-fraud plaintiff 'must prove both transaction and loss causation.' " Lentell , 396 F.3d at 172 (quoting First Nationwide Bank v. Gelt Funding Corp. , 27 F.3d 763 , 769 (2d Cir. 1994) ); accord Weiss v. Wittcoff , 966 F.2d 109 , 111 (2d Cir. 1992).
discussed Cited "see" ATSI Commc'ns v. Shaar Fund ATSI Commc'ns v. Wolfson (2×)
2d Cir. · 2007 · signal: see · confidence high
See id. at 174 (“Such an allegation - which is nothing 5 more than a paraphrased allegation of transaction causation - 6 explains why a particular investment was made, but does not speak 7 to the relationship between the fraud and the loss of the 8 investment.” (internal quotation marks omitted)). 9 ATSI is wrong in claiming that these allegations are 10 sufficient to establish loss causation under our decision in 11 Weiss v. Wittcoff, 966 F.2d 109 (2d Cir. 1992) (per curiam).
discussed Cited "see" Aiena v. Olsen
S.D.N.Y. · 1999 · signal: see · confidence high
See Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992); Manufacturers Hanover Trust Co. v. Drysdale Securities Corp., 801 F.2d 13, 20-21 (2d Cir.1986), cert. denied, 479 U.S. 1066 , 107 S.Ct. 952 , 93 L.Ed.2d 1001 (1987); see also Moore v. Painewebber, Inc., 189 F.3d 165, 173-79 (2d Cir.1999) (Calabresi, J., concurring) (RICO case). 78 .
cited Cited "see" In Re Prudential Insurance Co. of America Sales Practices Litigation
D.N.J. · 1997 · signal: see · confidence high
See Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992).
discussed Cited "see" Fisk v. Superannuities, Inc.
S.D.N.Y. · 1996 · signal: see · confidence high
See Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992); Manufacturers Hanover Trust Co. v. Drysdale Securities Corp., 801 F.2d 13, 20-21 (2d Cir.1986), cert. denied, 479 U.S. 1066 , 107 S.Ct. 952 , 93 L.Ed.2d 1001 (1987).
discussed Cited "see" Gruntal & Co., Inc. v. San Diego Bancorp (2×) also: Cited "see, e.g."
S.D.N.Y. · 1995 · signal: see · confidence high
See Weiss, 966 F.2d at 111 (citations omitted).
cited Cited "see, e.g." Nomura Securities International, Inc. v. ETrade Securities, Inc.
S.D.N.Y. · 2003 · signal: see also · confidence medium
See also Weiss v. Wittcoff, 966 F.2d 109, 111-12 (2d Cir.1992) (establishing a liberal 12(b)(6) standard for alleging loss causation in an action for fraud).
cited Cited "see, e.g." Log on America, Inc. v. Promethean Asset Management LLC
S.D.N.Y. · 2001 · signal: see, e.g. · confidence medium
See, e.g., Weiss v. Wittcoff, 966 F.2d 109, 111 (2d Cir.1992) (scienter); Global Intellicom v. Thomson Kemhagan & Co., 99 Civ. 342(DLC), 1999 WL 544708 (S.D.N.Y.
discussed Cited "see, e.g." Gigliotti v. Mathys
D.V.I. · 2001 · signal: see also · confidence medium
See also Weiss v. Wittcoff, 966 F.2d 109, 112 (2d Cir.1992) (misrepresentation that defendants would supply plaintiff with goods in the future was an "important inducement in persuading” plaintiff to sell his stock); Sulkow v. Crosstown Apparel Inc., 807 F.2d 33, 34-35 (2d Cir.1986) (misrepresentations that, among other things, plaintiff would become a director and would draw a salary if he purchased stock in defendants’ company directly induced plaintiff to purchase stock).
Retrieving the full opinion text from the archive…
William WEISS, Plaintiff-Appellant,
v.
Mark WITTCOFF, Edward Wittcoff, and Wittcoff Paper Co., Inc., Defendants-Appellees
1506, Docket 92-7185.
Court of Appeals for the Second Circuit.
Jun 11, 1992.
966 F.2d 109
Joseph F. Donley, New York City (Sher-eff, Friedman, Hoffman & Goodman, of counsel), for plaintiff-appellant William Weiss., Evan L. Gordon, New York City (Bang-ser, Klein, Rocca & Blum, of counsel), for defendants-appellees Mark Wittcoff, Edward Wittcoff and Wittcoff Paper Co., Inc.
Feinberg, Cardamone, Larimer.
Cited by 46 opinions  |  Published
PER CURIAM:

This case arises out of an alleged violation of § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 783(b) (“the Act”). Plaintiff appeals from an Order of the United States District Court for the Southern District of New York, Conboy, J., which dismissed the complaint pursuant to Fed.R.Civ.P. 12(b)(6) “for failure to properly and sufficiently allege loss causation.” We reverse.

FACTS

The facts alleged in the complaint, which the court must accept as true for purposes of this appeal, are as follows. In 1988, plaintiff William Weiss (“Weiss”) negotiated with defendants Mark Wittcoff and Edward Wittcoff (“the Wittcoffs”) for the merger of Weiss’s family-owned packaging business with the Wittcoffs business; Witt-coff Paper Co.

Weiss was seeking an arrangement that would assure a long, stable future for his company, and the Wittcoffs assured him that they could provide such a future. In particular, they allegedly promised Weiss that if he relocated his business to their building on Coffey Street in New York City and gave Mark Wittcoff a fifty percent share of Weiss’s company, the Wittcoffs, through another company they owned named Mutual Paper, would provide Weiss’s business with the goods and services it needed for as long as Mark Wittcoff remained a shareholder in Weiss’s business.

Plaintiff alleges that in fact, however, the Wittcoffs had no intention of maintaining this arrangement for any length of time. The complaint alleges that the Witt-coffs were planning to sell Mutual in the near future, which would make it impossible for them to keep their end of the bargain.

In reliance on the Wittcoffs’ promises, Weiss incorporated his business as W. Weiss Packaging Co. (“WPC”) in September 1988. Weiss and Mark Wittcoff were each issued fifty percent of WPC’s common stock.

In August 1989, the Wittcoffs sold Mutual, which shut down its operations at Coffey Street. The complaint alleges that, in violation of their contract with Weiss, the Wittcoffs also began manipulating WPC’s financial affairs for their own benefit, which caused WPC to suffer losses. In addition, they started pressuring Weiss to resign, which he ultimately did on November 9, 1990. According to the complaint,[*111] the Wittcoffs have continued to run WPC, exploiting it for their own gain.

Weiss brought this suit in February 1991, alleging securities fraud in the issuance of WPC stock to Mark Witteoff. Specifically, Weiss alleges that in violation of § 10(b) of the Act, the Wittcoffs made certain misrepresentations to him, in reliance upon which Weiss issued fifty percent of WPC’s common stock to Mark Witt-eoff. As a further result of defendants’ fraudulent acts, Weiss claims, WPC has suffered severe losses, and the value of Weiss’s own holdings in WPC has been greatly reduced. Weiss also asserts pendent claims for fraud, breach of fiduciary duty and conversion.

The district court stayed discovery pending decision on defendants’ motion to dismiss. On December 30, 1991, the court issued a one-page order dismissing the complaint “for failure to properly and sufficiently allege loss causation.” [2]

DISCUSSION

A claim under § 10(b) of the Act requires a showing of both “transaction causation” and “loss causation.” In other words, the plaintiff must show that the defendant’s misrepresentations not only caused the plaintiff to engage in the transaction in question, but also that they caused the harm suffered. Wilson v. Ruffa & Hanover, P.C., 844 F.2d 81, 85 (2d Cir.1988), vacated on other grounds and affd on reconsideration, Wilson v. Saintine Exploration and Drilling Corp., 872 F.2d 1124 (2d Cir.1989); Schlick v. Penn-Dixie Cement Corp., 507 F.2d 374 (2d Cir. 1974), cert. denied, 421 U.S. 976, 95 S.Ct. 1976, 44 L.Ed.2d 467 (1975).

While transaction causation requires only a “but for” allegation, see Bennett v. United States Trust Co. of New York, 770 F.2d 308, 314 (2d Cir.1985), cert. denied, 474 U.S. 1058, 106 S.Ct. 800, 88 L.Ed.2d 776 (1986), whether loss causation has been alleged turns upon a question of proximate cause: was the damage complained of a foreseeable result of the plaintiff's reliance on the fraudulent misrepresentation? Marburg Mgmt., Inc. v. Kohn, 629 F.2d 705, 708 (2d Cir.), cert. denied, Wood Walker & Co. v. Marburg Mgmt, Inc., 449 U.S. 1011, 101 S.Ct. 566, 66 L.Ed.2d 469 (1980).

The facts alleged in the complaint in the case at bar adequately allege loss causation. Weiss contends that he transferred stock in WPC to Richard Witteoff in reliance on the Wittcoffs’ misrepresentations concerning their future actions. The complaint alleges that “as a result of the ... misrepresentations and omissions of the Wittcoffs, after approximately August 1989 WPC was saddled with increased costs that eliminated profits.” Complaint 1132. Thus, Weiss’s loss — the devaluation of his own WPC stock — was clearly a proximate result of his reliance on defendants’ promises, since defendants’ failure to fulfill those promises foreseeably caused WPC’s financial condition to deteriorate.

Defendants’ argument that loss causation has not been alleged because the alleged misrepresentations related to future actions rather than to present conditions is not persuasive. Channel Master Corp. v. Aluminum Ltd. Sales, 2 A.D.2d 933, 156 N.Y.S.2d 585 (3d Dep’t 1956), on which defendants heavily rely, is clearly distinguishable. For one thing, Channel Master was not a securities fraud case, but dealt with a contract to supply goods. Furthermore, although the court in Channel Master held that certain statements by the defendant concerning anticipated shipments to the plaintiff were not fraudulent, the court characterized those statements as mere “predictions or expressions of future expectations.” Id. Channel Master therefore stands in sharp contrast to the instant case, which involves explicit promises to take specific future actions. In fact, the court in Channel Master observed that “statements of present intent [are] factual[*112] and, in proper cases, actionable.” Id. (emphasis added).

In support of its holding that loss causation had not been alleged, the court below relied upon Pross v. Katz, 784 F.2d 455 (2d Cir.1986). This reliance was misplaced. Pross dealt not with loss causation, but with whether the alleged fraud occurred “in connection with the purchase or sale of a security” as required by § 10(b). Pross is therefore inapposite to the issue of loss causation.

Moreover, even if the District Court based its decision on the actual holding of Pross, dismissal of the complaint would be error. Pross specifically recognized that a “promise to perform a particular act in the future while secretly intending not to perform may violate Section 10(b) ... if the promise is part of the consideration for a sale of securities.” Id. at 457. Cf. A.T. Brod & Co. v. Perlow, 375 F.2d 393, 395-97 (2d Cir.1967) (promise to purchase securities violated § 10(b) where customer’s secret intention was to pay only if price of securities appreciated).

Here, according to the complaint, the alleged misrepresentations were an important inducement in persuading Weiss to part with his WPC stock, and defendants’ scheme could not have been accomplished without the stock transfer. In addition, it was quite foreseeable that the consummation of defendants’ secret intention not to perform their promises would cause Weiss to suffer a loss.

Although it remains to be seen whether Weiss can prove his allegations, the court’s task on a Rule 12(b)(6) motion is not to rule on the merits of plaintiffs’ claims, but to decide whether, presuming all factual allegations of the complaint to be true, and drawing all reasonable inferences in the plaintiff’s favor, Frazier v. Coughlin, 850 F.2d 129 (2d Cir.1988), the plaintiff could prove any set of facts which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957); Branum v. Clark, 927 F.2d 698, 705 (2d Cir.1991). Under this standard, the complaint sufficiently states a cause of action and therefore its dismissal was error.

CONCLUSION

The district court’s order dismissing the complaint is reversed, and the case is remanded with directions to reinstate the complaint and to conduct further proceedings consistent with this opinion.

2

. The court gave Weiss fifteen days to file an amended complaint. Weiss did not do so, and appealed the dismissal order instead.