The American Lawyer reports on June 25, 2009, that with a few exceptions, the spring of 2009 wasn't a particularly happy time for securities class action plaintiffs. And a ruling on Tuesday that invokes the safe harbor provisions of the Private Securities Litigation Reform Act suggests the summer is off to an equally gloomy start.

On Tuesday, Kentucky federal district court Judge Joseph McKinley dismissed a class action against Humana Inc., ruling that the cautionary language included in Humana's hearnings forecasts insulated it from liability when the company later issued restatements after discovering accounting problems. As Securities Docket noted in a post on Tuesday, the Humana ruling follows the June 9 dismissal of a securities fraud suit against Aetna Inc. In that case, Philadelphia federal district court Judge Thomas O'Neill found that Aetna's allegedly false statements were protected by its "meaningful cautionary" statements. The two-pronged PSLRA's safe harbor provision absolves issuers of liability for omissions or misstatements in forward-looking statements if the statements are identified as forward-looking and are accompanied by "meaningful cautionary language."

It also provides protection unless plaintiffs can prove that issuers knew that their forward-looking statements were false or misleading. In the past, says the 10b-5 Daily blog, judges have sometimes resisted dismissing cases purely on the basis of the first prong if there was evidence that the issuer knew its statements were or might be false. The plaintiffs in the Humana case, represented by lead counsel Coughlin Stoia Geller Rudman & Robbins, argued that the company's cautionary statements were not sufficient to invoke the PSLRA's safe harbor protection because Humana knew that its accounting methods were suspect. But Judge McKinley, citing an earlier ruling, wrote in his opinion that "plaintiffs' allegation that the defendants had actual knowledge of the internal control problems 'does not save the claim because the existence of the meaningful cautionary statement renders the issuer's state of mind irrelevant.'"…