King & Spalding obtained an affirmance in the Second Circuit of a district court decision that declined to reopen a class action seeking hundreds of millions of dollars in damages against King & Spalding’s client, Rio Tinto. The plaintiff alleged Rio Tinto defrauded investors in violation of Section 10(b) of the Securities Exchange Act in connection with a $4 billion impairment of a coal mining project in Mozambique. The class action had initially been filed in 2017 after the SEC sued Rio Tinto and its former CEO and CFO for Section 10(b) and other violations.
King & Spalding obtained dismissal of the class action in the district court and then prevailed on a motion for reconsideration. In the first appeal, the Second Circuit affirmed the dismissal of the complaint and most of the reconsideration motion but remanded with an instruction that the district court consider an alleged misrepresentation that the district court had not considered because it had deemed the allegation abandoned. On remand, Rio Tinto argued that the statement was not actionable and prevailed again in the district court. The plaintiff appealed again. King & Spalding argued, among other things, that the appeal was barred on jurisdictional grounds because it was filed late, and in any event, plaintiff hadn’t adequately pleaded loss causation. The Circuit agreed, dismissed the appeal, and affirmed the dismissal of the case.