Welcome to the inaugural installment of the new Sunday Arts series, which I previewed in a recent post. It seemed appropriate to me to devote the first post in this series to my favorite composer, Frédéric Chopin, and to my favorite of all of Chopin’s compositions, his Polonaise in A-Flat Major (Opus 53), written in 1842. It is a great piece of music, and it is also a piece of music with a distinctive connection to the composer’s personal history. Continue Reading Sunday Arts: Chopin’s Heart
On Thursday, September 23, 2021, I will be participating in a Professional Liability Underwriting Society (PLUS) webinar on the topic “SPAC and Related IPO Litigation as it has Evolved & The Current State of SEC Regulation of Disclosure.” This free, one-hour webinar will begin at 2:00 pm EDT. The session will be moderated by Greg Markel of the Seyfarth Shaw law firm, and the panel will include Giovanna Ferrari of Seyfarth Shaw, Kieran Hughes of McGriff, and Deirdre Martin of Sompo International. It is going to be an interesting session and I hope as many of you as possible will attend. For further information about the webinar, including registration details, please refer here.
In an important decision that highlights the liability exposures facing corporate boards for claims alleging breaches of the duty of oversight, a Delaware Court of Chancery Vice Chancellor denied in substantial part the defendants’ motion to dismiss in the shareholder derivative suit pending against the board of Boeing relating to the 737 Max air crashes. The court concluded that the plaintiff had sufficiently alleged that the company’s board had breached its oversight obligations by failing to establish safety oversight mechanisms prior to the October 2018 Lion Air crash and ignoring red flags about safety issues after the Lion Air crash and before the March 2019 Ethiopian Airlines crash. Vice-Chancellor Morgan Zurn’s September 7, 2021 opinion can be found here. Continue Reading Del. Court Substantially Denies Boeing Duty of Oversight Claim Dismissal Motion
The case pending before the U.S. Supreme Court in which the Court was to consider the applicability of the PSLRA’s discovery stay in state court ’33 Act actions has been suspended by the Court at the parties’ request. The parties apparently have reached a tentative settlement of the underlying matter and jointly requested that the Court hold the matter in abeyance, pending the parties’ efforts to complete settlement documentation. Continue Reading U.S. Supreme Court Suspends Case Addressing Discovery Stay in State Court ’33 Act Suits
Every year after Labor Day, I take a step back and survey the most important current trends and developments in the world of Directors’ and Officers’ liability and insurance. This year’s review is set out below. As the following discussion shows, this is a particularly eventful time in the world of D&O. Continue Reading What to Watch Now in the World of D&O
Starting last summer and through the early part of this year, plaintiffs’ lawyers filed several shareholder derivative lawsuits against the boards of a number of companies alleging that the directors had breached their fiduciary duties by failing to include African American individuals on their boards. As I have detailed in previous posts (most recently here), these suits have not fared well, as courts have granted the motions to dismiss each of the cases in which courts have ruled on dismissal motions. In the past week, the courts in two more of these cases – involving the boards of NortonLifeLock and OPKO Health – granted the defendants’ motions to dismiss. The August 30, 2021 order in the NortonLifeLock case can be found here and the September 1, 2021 order in the OPKO Health case can be found here. Continue Reading Two More Board Diversity Lawsuits Dismissed
In the following guest post, Peter Selvin discussed the Fifth Circuit’s July 21, 2021 decision in Landry’s Incorporated v. The Insurance Company of the State of Pennsylvania (here), which considered the question of coverage under a commercial general liability policy of damages from a data breach caused by a third-party hacker. Selvin is a partner with Los Angeles-based Ervin Cohen & Jessup. A version of this article previously was published in the LA Daily Journal. I would like to thank Peter for allowing me to publish his article on my site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Peter’s article. Continue Reading Guest Post: CGL Coverage for Data Breaches: New Developments
In numerous prior posts, I have noted the problems and inefficiencies that the U.S. Supreme Court’s March 2018 Cyan decision have wrought, such as, for example, the possibility of multiplied parallel litigation (discussed here). There are a host of other issues as well, such as the absence in state court of procedural protections available in federal court; the prevalence in state court of weaker suits; and the pressure that multiple suits puts on defendants to settle, as discussed here. These and other concerns arising from Cyan have led the U.S. Chamber of Commerce’s Institute for Legal Reform (ILR) to issue a new paper entitled “Courting Confusion: Federal Securities Class Actions Don’t Belong in State Courts,” in which the ILR calls for Congress to “close the loophole” by requiring that all 1933 Act claims must be brought in federal court and authorizing the removal to federal court of ’33 Act liability actions filed in state court. The ILR’s August 30, 2021 press release, to which the paper is attached, can be found here. Continue Reading Institute for Legal Reform: Congress Should Enact Reforms to Address Cyan
In the latest SPAC-related securities class action lawsuit filing, a plaintiff shareholder has filed a class action lawsuit against Katapult Holdings, an ecommerce firm providing online financing and product purchase options for non-prime consumers. The defendants named in the complaint include two former officers of the SPAC with which Katapult merged in June 2021. A copy of the August 27, 2021 complaint can be found here. Continue Reading eCommerce Firm Hit with SPAC-Related Securities Suit
As I noted in prior posts (here and here), in the last few days a group of plaintiffs’ lawyers that includes former SEC Commissioner Robert Jackson and Yale Law Professor John Morley filed shareholder derivative suits against the boards of three SPACs alleging that the SPACs had improperly failed to register as investment companies under the Investment Company Act of 1940. In response, a group of 49 corporate law firms has now issued a joint statement decrying the lawsuits and trashing the plaintiffs’ arguments that SPACs are investment companies merely because the SPACs invest their IPO proceeds in trust accounts while seeking a merger partner. The corporate law firms’ joint statement sheds interesting light on the legal theories asserted in the new lawsuits. A copy of the August 27, 2021 joint statement can be found here. Continue Reading 49 Corporate Law Firms Trash SPACs-Are-Investment-Companies Lawsuits