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A federal appeals court disposed of a hedge fund principal’s lawsuit accusing Massachusetts’ secretary of state of retaliating against him for criticizing securities industry regulations.

On Monday in Goldstein v. Galvin, the U.S. Court of Appeals for the First Circuit affirmed District of Massachusetts Judge George O’Toole’s September 2012 dismissal of Bulldog Investors General Partnership co-founder Phillip Goldstein’s case.

Goldstein is known for winning a 2006 D.C. Circuit Court of Appeals ruling, Goldstein v. SEC that invalidated the U.S. Securities and Exchange Commmission’s hedge fund rule, which would have required most hedge fund investment managers to register with the agency.

Goldstein sued Massachusetts Secretary of the Commonwealth William Galvin in January 2010, claiming that Galvin induced his agency’s enforcement staff to file an administrative complaint against him and Bulldog that deviated "from normal investigatory practices and charging standards."

Goldstein claimed that Galvin took the unusual step of identifying him and his firm on a website announcement about the case.

Senior Judge Bruce Selya wrote the opinion, joined by Judge Juan Torruella and Senior Judge Kermit Lipez. He pointed to case law in the First Circuit and other circuits holding that a government official who performs both judicial and prosecutorial functions is entitled to absolute immunity from lawsuits. Additionally, Galvin was protected by qualified immunity from a retaliation claim, Selya wrote.

"It is clear beyond hope of contradiction that the inclusion of the plaintiff’s name in a run-of-the-mill website announcement did not sink to the level of actionable retaliatory conduct," he wrote. "And even if the Secretary chose to include the plaintiff’s name in the announcement because he bore him a grudge — a matter on which we take no view — that would not be enough to state a plausible claim of unconstitutional retaliation."

Reached at his Saddle Brook, N.J., office, Goldstein wondered why Americans aren’t more offended by the principle of absolute immunity, "which seems to be a license to abuse power." He continued: "I knew this [case] was going to be tough. Sometimes you’ve got to fight the good fight."

Andrew Good of Good Schneider Cormier in Boston argued the case for Goldstein.

"The ruling speaks for itself," said Brian McNiff, a spokesman for Galvin’s office.

Pierce Cray an assistant attorney general in the Massachusetts attorney general’s office argued for Galvin.

Sheri Qualters can be contacted at squalters@alm.com.

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