In this matter, NELF joined with two other amici curiae—the American Society of Corporate Secretaries and the National Investor Relations Group—on a brief in support of the writ for certiorari that Baxter International Incorporated (“Baxter’) filed in the U.S. Supreme Court seeking review of a decision by Judge Easterbrook of the Seventh Circuit. The Seventh Circuit decision effectively guts a major protection afforded to public company issuers of securities. Asher v. Baxter Int’l Inc., 377 F.3d 727 (7th Cir. 2004). That provision, 15 U.S.C. § 77Z-2(c)(1)(A)(i), requires dismissal of a securities lawsuit based on the issuer’s forward-looking business projections, before time-consuming and expensive discovery takes place, if the issuer’s statements were identified as forward looking and were accompanied by “meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statements.” 15 U.S.C. § 77Z-2(c)(1)(A)(i). It is not required that the issuer list all factors that might affect its actual results or even the factors that actually affected the results; all that is required is that the cautionary statements are meaningful statements identifying important factors. Nevertheless in this putative class-action securities Judge Easterbrook refused to dismiss the action, and instead allowed discovery to proceed to determine whether, as plaintiffs alleged, Baxter had omitted actual major risks contained in its internal estimates from the cautionary language that accompanied its projections. It was the amici’s position that, in effect, the Seventh Circuit’s decision erroneously injects an examination of the issuer’s intent into the safe harbor analysis.
On March 21, 2005, the Supreme Court denied Baxter’s petition for a writ of certiorari.