As a consequence of increased IPO activity during the period 2013-15, IPO-related securities class action litigation has picked up as well, as I noted in my year-end review of 2015 securities class action litigation. An interesting aspect of this IPO-related litigation has been that much of it has been filed in state court, particularly in California state court, as detailed in a recent guest post on this site. Defendants in these suits can attempt to remove the state court lawsuits to federal court, but because of ongoing questions about whether or not SLUSA eliminated state court jurisdiction for class action lawsuits under the ’33 Act, some federal courts have remanded the federal actions back to state court. Because remand rulings are not appealable, defendants may find themselves consigned to litigating the plaintiffs’ federal securities class action lawsuit in state court, a jurisdiction in which plaintiffs potentially enjoy a number of advantages.
As the numbers of these state court class action lawsuits under federal law has mounted in recent months, defendants (particularly those sued in California state court) have continued to try to extricate themselves from the state court forum and transfer their cases to federal court. In some instances, defendants find themselves obliged to defend these state court lawsuits while also defending parallel or even identical federal court lawsuits raising essentially the same allegations.
A recent petition for writ of certiorari filed with the U.S. Supreme Court by Cyan,Inc. seeks to have the Court address these recurring questions and to specifically address the question of whether or not the Securities Litigation Uniform Standards Act of 1998 (SLUSA) eliminated concurrent state court jurisdiction for class action lawsuits filed under the ’33 Act. While it remains to be seen whether or not the Supreme Court will take up the case, Cyan’s petition at least potentially offers the prospect for a resolution that could eliminate the continuing phenomenon of state court class action lawsuits alleging claims under the ’33 Act. A copy of Cyan’s May 25, 2016 petition for writ of certiorari can be found here.
Continue Reading U.S. Supreme Court Review of Concurrent State Court Jurisdiction for IPO-Related Securities Class Suits Sought
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What is the role of defense counsel in deal litigation? What impact does the involvement of “top” deal litigation firms have on lawsuit outcomes? And what will the impact on deal litigation be from the advent of forum selection by-laws and the recent court crackdown on disclosure-only settlements? These are the questions addressed in an interesting May 2, 2016 paper entitled “Divided Loyalties? The Role of Defense Litigation Counsel in Shareholder M&A Litigation” (
It has been nearly six years since the U.S. Supreme Court’s landmark 2010 decision in Morrison v. National Australia Bank, in which the Court restricted the ability of shareholders of non-U.S. companies who purchased their shares outside the U.S. to file securities fraud lawsuit in U.S. courts under the U.S. securities laws. In the intervening years, many of the issues questions that the Morrison decision presented have been resolved by the lower courts. However, one issue that has continued to percolate is the question of whether under Morrison the U.S. securities laws apply to transactions involving foreign companies’ unsponsored ADRs traded over-the-counter (OTC) in the U.S.
The D&O Diary was on assignment in Canada last week for meetings and to attend a PLUS Canadian Chapter event in Montréal. It was a short sunlit visit to our Northern neighbor, but it was just long enough for a bit of foreign adventure without even leaving the Eastern Time zone.
While financial fraud has always been an important enforcement target for the SEC, the agency recently has shown increased attention to financial reporting cases. In the following guest post, Robert F. Carangelo, Paul A. Ferrillo and Andrew Cauchi of the Weil Gotshal law firm take a look at the SEC’s recent focus on financial reporting and the particular issues that have drawn the agency’s scrutiny. I would like to thank Rob, Paul and Andrew for their willingness to publish their article on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ guest post.
Among the decisions that the Supreme Court issued this past Monday was its unanimous ruling in Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning (
In a closely-watched case, the U.S. Supreme Court held that to establish standing to sue, a claimant who alleged that inaccurate information on the Spokeo website about him violated the Fair Credit Reporting Act must show that the supposed FCRA violation caused him “concrete” harm. Defense-side advocates had hoped that the Court would strike down the plaintiffs’ claims in the case and help stem the flow of proliferating “no injury” class action litigation under the FCRA and other federal statutes such as the TCPA and the ADA. However, the Court’s did not strike down the plaintiffs’ claim, but instead remanded the case for the Ninth Circuit to determine whether or not the claimant’s allegations met the “concrete harm” requirements to establish standing. Though the holding is narrow, there is language in the Court’s opinion that may prove helpful for defendants in other cases. A copy of the Court’s May 16, 2016 opinion in Spokeo, Inc. v. Robins can be found 