United States District Court, S.D. New York
Attorneys for Plaintiff MIRIAM TAUBER LAW PLLC, Miriam
Tauber, Esq. LAW OFFICES OF DAVID LOPEZ David Lopez, Esq.
Attorneys for Defendant Liberty Media Corp. BAKER BOTTS LLP
Douglas W. Henkin, Esq. Richard B. Harper, Esq. Thomas E.
O'Brien Mysha Lubke, Esq.
Attorneys for Nominal Defendant Live Nation Entertainment
LATHAM & WATKINS, LLP Hilary H. Mattis, Robert A. Koenig,
Esq., Jason C. Hegt, Esq.
W. SWEET U.S.D.J.
Liberty Media Corporation ("Liberty" or the
"Defendant") has moved pursuant to Rule 12(b)(6) of
the Federal Rules of Civil Procedure to dismiss the complaint
of plaintiff Aaron Rubenstein ("Rubenstein" or the
"Plaintiff") (the "Complaint") seeking
recovery for short swing profits under Section 16(b) of the
Securities Exchange Act of 1934. Upon the conclusions set
forth below, the motion is granted and the complaint against
Liberty and the nominal defendant Live Nation Entertainment
("Live Nation") is dismissed.
facts as set forth in the Complaint are not disputed unless
Nation is a publicly held company, with common stock
registered under Section 12(b) of the Act. Compl. ¶ 6,
10. Rubenstein is a shareholder of Live Nation. Id.
¶ 7. Liberty, a corporation, is a more than 10% owner of
Live Nation. Id. ¶ 11.
September 4, 2014, Liberty entered into a forward purchase
contract (the "Forward Contract") with an
unaffiliated bank counterparty (the "Bank").
Id. ¶ 15. The relevant terms of the contract
were summarized in a Form 4s that Liberty filed with the SEC.
Mot. to Dismiss, Ex. A (Liberty's September 30, 2015 Form
4 - Statement of Changes in Beneficial Ownership);
Ex. B (Liberty's December 1, 2015 Form 4 - Statement of
Changes in Beneficial Ownership).
the terms of the Forward Contract, Liberty agreed to purchase
from the Bank on the settlement date the number of shares
purchased by the Bank during its "initial hedging
period" - capped at 15.9 million shares - at a
"forward price" to be determined at the conclusion
of the initial hedging period in accordance with a formula
set forth in the Forward Contract. Compl. ¶ 15. The
initial hedging period concluded on September 28, 2015, and
the Forward Contract settlement date was November 27, 2015.
Mot. to Dismiss, Ex. A.
final number of shares covered by the Forward Contract was
15.9 million shares, and the final forward price was $24.9345
per share. Mot. to Dismiss, Ex. B. The Forward Contract was
physically settled on December 2, 2015. Id.
September 19, 2016, Plaintiff filed the Complaint, alleging
that, pursuant to the Forward Contract, Liberty profited from
the purchase and sale of Live Nation securities within a
period of less than six months. Compl. ¶¶ 1-4. The
instant motion to dismiss the Complaint was heard and marked
fully submitted on February 23, 2017.
The Applicable Standard
Rule 12(b)(6) standard requires that a complaint plead
sufficient facts to state a claim upon which relief can be
granted. Ashcroft v. Iqbal, 556 U.S. 662, 677-78
(2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007). In considering a Fed.R.Civ.P. 12(b)(6) motion to
dismiss, a court accepts the complaint's factual
allegations as true and draws all reasonable inferences in
the plaintiff's favor. See Littlejohn v. City of
N.Y., 795 F.3d 297, 306 (2d Cir. 2015); Chambers v.
Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002);
Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174
(2d Cir. 1993). A court need not accept as true, however,
"[l]egal conclusions, deductions or opinions couched as
factual allegations." In re NYSE
Specialists Sec. Litig., 503 F.3d 89, 95 (2d Cir. 2007).
"[A] plaintiff s obligation to provide the grounds of
his entitlement to relief requires more than labels and
conclusions." Twombly, 550 U.S. at 555
(quotation marks omitted). A complaint must contain
"sufficient factual matter, accepted as true, to
'state a claim to relief that is plausible on its
face.'" Iqbal, 556 U.S. at 663 (quoting
Twombly, 550 U.S. at 570) .
is facially plausible when "the plaintiff pleads factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged." Id. (quoting Twombly, 550
U.S. at 556). In other words, the factual allegations must
"possess enough heft to show that the pleader is
entitled to relief." Twombly, 550 U.S. at 557
(internal quotation marks omitted). In determining the
sufficiency of a complaint, the Court may consider "the
factual allegations in [the] . . . complaint, . . . documents
attached to the complaint as an exhibit or incorporated in it
by reference,  matters of which judicial notice may be
taken, [and] documents . . . which the plaintiff . . .
relied on in bringing suit." Brass v. Am. Film
Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993); see
also Chambers v. Time Warner, Inc., 282 F.3d 147, 153
(2d Cir. 2002) ("[A] plaintiff's reliance
on the terms and effect of a document in drafting the
complaint is a necessary prerequisite to the court's
consideration of the document on a dismissal motion.")
(emphasis in original); Cosmas v. Hassett, 886 F.2d
8, 13 (2d Cir. 1989) (an extraneous document is not
incorporated by reference into the complaint where
"[t]he amended complaint merely discussed these
documents and presented short quotations from them").
while "a plaintiff may plead facts alleged upon
information and belief 'where the belief is based on
factual information that makes the inference of culpability
plausible, ' such allegations must be 'accompanied by
a statement of the facts upon which the belief is
founded.'" Munoz-Nagel v. Guess, Inc., No.
12-1312, 2013 WL 1809772, at *3 (S.D.N.Y. Apr. 30, 2013)
(quoting Arista Records, LLC v. Doe 3, 604 F.3d 110,
120 (2d Cir. 2010)) and Prince v. Madison Square
Garden, 427 F.Supp.2d 372, 384 (S.D.N.Y. 2006); see
also Williams v. Calderoni, No. 11-3020, 2012 WL 691832,
*7 (S.D.N.Y. Mar. 1, 2012). The pleadings, however,
"must contain something more than . . . a statement of
facts that merely creates a suspicion [of] a legally
cognizable right of action." Twombly, 550 U.S.
At 555 (quoting 5 Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1216 (3d ed. 2004)).
Section 16(b) Liability Has ...