There are plenty of handicaps facing plaintiffs in the ongoing boom of securities class actions against Chinese companies whose shares trade on U.S. exchanges. First there is the difficulty of gathering evidence and obtaining discovery in China, though a cadre of China stock-watchers and short-sellers has been happy to furnish plaintiffs lawyers with fresh claims. Then there is the problem of the Chinese government, which is not likely to prove helpful in enforcing any U.S. judgments that plaintiffs manage to win.
But plaintiffs lawyers at Pomerantz Haudek Grossman & Gross were stymied last week by a more familiar obstacle in their case against China North East Petroleum Holdings Limited: a motion to dismiss. In a concise seven-page decision issued Thursday, Southern District Judge Miriam Goldman Cedarbaum granted dismissal motions filed by CNEP and two other defendants, ruling that the lead plaintiff had not shown that it suffered any economic loss as a result of the company’s alleged misrepresentations. The case apparently is the first to fail at the motion to dismiss stage in the current wave of China-related class actions.
