In an interesting June 23, 2017 opinion in a case raising a host of claims made date, notice of potential claims, and notice of claims issues, Western District of Tennessee Judge Sheryl Lipman, applying Tennessee law, held that a purported notice to insurers of a potential claim was insufficient to provide notice of an actual claim, therefore concluding that the defendant insurers did not have to reimburse the policyholder for its $212.5 million FHA loan violation settlement with the DOJ. The opinion provides interesting insights into the meaning of the policy term “Claim,” as well as into what is required in order to provide sufficient notice of claim. Continue Reading Purported Notice of Potential Claim Held Insufficient to Provide Notice of Actual Claim
First Half 2017 Securities Suit Filings Continue at Exceptional Levels
Largely as a result of the continuing upsurge in the number of federal court merger objection lawsuits, securities class action lawsuits were filed at historic levels during the first half of 2017 and well above last year’s elevated pace. Though the number of filings in this year’s second quarter were slightly lower than in the first quarter, the total number of filings in the first six months of the year overall were on pace for the highest annual number of securities class action lawsuits since 2001. Continue Reading First Half 2017 Securities Suit Filings Continue at Exceptional Levels
Time and Summer (A Replay)
In recognition of the upcoming Independence Day holiday in the U.S., and in what has become an annual tradition, I am reprising here my 2012 essay about Time and Summer, which can be found here. Have a great Fourth of July holiday. Thank you to all of my loyal readers.Supreme Court to Review Whether Dodd-Frank Anti-Retaliation Provisions Protect Internal Whistleblowers
In the flurry of opinions and orders on Monday on the final day of the U.S. Supreme Court’s term, and amid the hubbub over the Court’s action on the Trump administration travel ban order, you might well have overlooked the fact that on Monday the Court also agreed to take up the question of whether or not the Dodd-Frank Act’s anti-retaliation provisions apply to and protect individuals who did not make a whistleblower report to the SEC. The lower courts have struggled with the question of whether or not the anti-retaliation protections extend to individuals who file internal reports within their own companies. A split on the issue has developed and now the U.S. Supreme Court will have the opportunity to address the question in the case of Digital Realty Trust v. Somers. The Court’s June 26, 2017 order granting Digital Realty Trust’s petition for a writ of certiorari can be found here. Continue Reading Supreme Court to Review Whether Dodd-Frank Anti-Retaliation Provisions Protect Internal Whistleblowers
Supreme Court Agrees to Hear Whether State Courts Retain Jurisdiction for IPO Securities Suits
In a June 27, 2017 order (here), the United States Supreme Court granted the petition of Cyan, Inc. for a writ of certiorari to consider the question of whether or not state courts retain concurrent jurisdiction for liability lawsuits under the ’33 Act, or whether as a result of changes to the relevant statutes under the Securities Litigation Uniform Standards Act of 1998 (SLUSA), state courts lack subject matter jurisdiction over ’33 Act suits. This case will address what has become a significant issue in IPO-related securities class action litigation, particularly in California, which is whether or not the plaintiffs’ state court securities class lawsuits can be removed to federal court or must be remanded back to state court. Continue Reading Supreme Court Agrees to Hear Whether State Courts Retain Jurisdiction for IPO Securities Suits
Supreme Court: Securities Act’s Three-Year Time Limit is a Statute of Repose that Cannot be Tolled
On June 26, 2017, in a 5-4 decision, the U.S. Supreme Court, in an opinion written for the majority by Justice Anthony Kennedy, ruled that the Securities Act of 1933’s three-year time limit for filing liability lawsuits is a statute of repose and therefore is not subject to equitable tolling. The Court also said that the principles described in its 1974 American Pipe decision providing for equitable tolling of statute of limitations are inapplicable to the 3-year statute of repose. The Court’s ruling could have important practical implications, particularly with respect to the question whether or not class members will need to file protective individual actions to preserve a later option to opt-out of any class settlement. The court’s opinion in California Public Employees’ Retirement System v. ANZ Securities Inc. can be found here. Continue Reading Supreme Court: Securities Act’s Three-Year Time Limit is a Statute of Repose that Cannot be Tolled
First-of-its-Kind Verdict That Inaccessible Website Violates the ADA
As I have previously noted (more recently here), in recent months a small number of plaintiffs’ law firms have launched a host of lawsuits under the Americans with Disabilities Act (ADA) based on allegations of website inaccessibility. In light of a recent development, these lawsuits may become an even bigger concern. On June 13, 2017, a federal judge in the Southern District of Florida, following a bench trial, entered a verdict that the website of Winn-Dixie Stores was inaccessible to a visually impaired individual in violation of Title III of the Americans with Disabilities Act. The trial was the first in the history of the ADA about an allegedly inaccessible website and the verdict arguably has significant implications for other businesses that have been hit with suits alleging that their websites are in accessible. The verdict and order in the Winn-Dixie case can be found here. Continue Reading First-of-its-Kind Verdict That Inaccessible Website Violates the ADA
Second Circuit Rejects First Circuit Test Requiring IPO Company Interim Financial Information Disclosure
We have seen the scenario before – shortly after its debut, an IPO company releases unexpected results, the company’s share price declines, and the lawsuits appear. Usually when this happens, the updated results pertain to reporting periods following the IPO. But what about a situation where the disappointing results pertain to a reporting period that was completed prior to the IPO – in fact, the day before the IPO? That was the situation involving Vivint Solar, where the company released results for the reporting period ending September 30, 2014 – that is, just a day before the company’s October 1, 2014 IPO –several weeks after the company’s debut. Continue Reading Second Circuit Rejects First Circuit Test Requiring IPO Company Interim Financial Information Disclosure
Insured vs. Insured Exclusion Precludes Coverage for Claim Assigned by Debtor in Possession to Liquidation Trustee
The Insured vs. Insured exclusion is a standard provision found in most D&O insurance policies. As its name implies, the exclusion precludes coverage for claims brought by one insured against another insured. The exclusion is a frequent source of coverage disputes, particularly in the bankruptcy context, due to frequent disagreements over the exclusion’s application to claims brought against company management by representatives of the creditors or of the bankrupt estate. One recurring dispute of this type is the question of the exclusion’s applicability to claims brought against company management by the company as debtor-in-possession. A recent appellate question considered a variation of this question – that is, whether the exclusion precluded coverage for claims brought against company management by the trustee of a liquidation trust as an assignee of the company as debtor in possession. In a June 20, 2017 opinion (here), the Sixth Circuit (applying Michigan law) held that the exclusion precluded coverage for the liquidation trustee’s claim. The appellate ruling raises some interesting issues, discussed below. Continue Reading Insured vs. Insured Exclusion Precludes Coverage for Claim Assigned by Debtor in Possession to Liquidation Trustee
Though the Failed Bank Crisis is Over, Bank Failures Are Still Happening
The FDIC updated its website late last week to reflect developments in the professional liability lawsuits the agency filed in the wake of the wave of bank failures that followed the global financial crisis. The unmistakable impression from the agency’s update is that the FDIC’s failed bank litigation is winding down and in its final stages. At the same time, however, a different page on the agency’s website arguably conveys a different message. The agency’s website’s failed bank list shows that though the financial crisis is well in the past, there have been a noticeable number of bank failures this year, many of them involving sizeable banks — a development that is worth considering and keeping an eye on. Continue Reading Though the Failed Bank Crisis is Over, Bank Failures Are Still Happening