Federal judge in USA throws out class action suit against Nokia

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US Federal judge Kenneth Karas of the United States District Court for the Southern District of New York agreed to a motion from Nokia to dismiss a class-action suit raised by investors against the company.
      The plaintiffs were demanding unspecified damages over the sharp decline in the value of Nokia’s shares in the spring of 2004.
      According to the lawsuit, Nokia’s management had long known about problems that were piling up, but had kept the information a secret from investors. After a result warning was issued in April 2004, and an ordinary quarterly review ten day's later, Nokia’s market value had plummeted by a total of 25 percent - or about EUR 20 billion.
     
Nokia disputed the validity of the whole lawsuit, and judge Karas came down on Nokia’s side in his Friday decision. In a 77-page ruling, he rejected the lawsuit in its entirety as unfounded.
      In a Saturday press release, Nokia noted that by dismissing complaint with prejudice, the judge denied the plaintiffs the opportunity to raise the claims again, or to file an amended complaint.
      The plaintiffs’ lawyers were not available for comment on Saturday.
     
Pushing class-action suit was the law firm Milberg & Weiss, which filed the motion on April 6th, 2004, the day when Nokia’s first stock market warning was issued. A number of other law firms joined the case, including the renowned Entwistle & Cappucci.
      The plaintiffs’ motion was drawn up last spring, and Judge Karas held his first hearing in January.
      The plaintiffs' lawyers were demanding "full compensation" from Nokia, and its five top managers. If they had prevailed, the payout would have been in the billions. At that time the weaknesses of the plaintiffs’ case also became clear.
     
Judge Karas had acquainted himself with the case very carefully, and made a number of comments in connection with the hearing, which gave reason to anticipate a decision such as the one that came out on Friday.
      Similar thoroughness is apparent in the text of the opinion. In his ruling, Karas goes into detail about all claims of deceptive statements by Nokia’s management during the winter and spring of 2004; he saw nothing improper from a legal standpoint, or from the point of view of content.
      Karas found no evidence of deliberate deception. He also rejected as unfounded the claim that Nokia had manipulated its books by sending telephones that it new were defective into the distribution chain.
     
The judge also rejected a request from the plaintiffs to present a new, altered bill of complaint, based on events such as a conference call between the Nokia management and analysts in January 2005.
      The judge felt that the request was poorly timed and technically inappropriate.
      The process was a clear victory for Nokia - its second such legal victory in a US court. The judge’s decision also vindicated the company’s assertion that it has done nothing wrong, and its refusal to discuss a possible out-of-court settlement.
      American lawyers specialising in class-action suits have managed to squeeze large amounts of money from out-of-court settlements with companies that have wanted to avoid drawn-out court battles.


Previously in HS International Edition:
  Securities class action suit filed against Nokia directors (10.1.2005)

Links:
  Nokia press release April 01, 2006: Class action against Nokia dismissed in its entirety

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