On November 25, 2003, Judge Buchwald of the SDNY dismissed with prejudice the Consolidated Amended Complaint (CAC) against drug store chain Duane Reade, Inc., and three of its executives. A copy of the decision is available here.

The Court agreed with defendants that the CAC neither identified a false or misleading statement nor adequately alleged scienter. Among other things, the Court found that:

1. Defendants' statements concerning anticipated sales and earnings for the current quarter were not actionable, as "future earnings, sales goals, and [the Company's] desire to achieve continued prosperity [a]re 'just the sort of predictive statements of opinion and belief that courts have found immaterial.'"

2. There is no requirement that a company update or correct statements (such as those in number 1 above) that were not material in the first place. "As forward-looking predictions for the next quarter, the statements of which plaintiffs complain constitute immaterial opinions and thus, cannot form the basis of a duty to update. Even though defendants may have learned before the close of the second quarter that their prior predictions would prove incorrect, 'the federal securities laws do not obligate companies to disclose their internal forecasts.'" (Citations omitted). The Court added that "even when facts are material, a business need not disclose them immediately; rather, 'the timing of disclosure is a matter for the business judgment of the corporate officers entrusted with the management of the corporation within the affirmative disclosure requirements promulgated by the exchanges and by the SEC.'"