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As I noted at the time (here), on December 19, 2018, Delaware Vice Chancellor Later held that under Delaware law, a corporate charter provision specifying that liability actions under Section 11 of the Securities Act of 1934 must be brought in federal court are invalid and ineffective. A copy of Laster’s opinion in Sciabacucchi v. Salzburg (referred to below as the Blue Apron decision) can be found here. In the following guest post, Paul Ferrillo, Robert Horowitz, and Steven Margolin of the Greenberg Traurig law firm take a look at the Blue Apron decision and examine whether or not Congress will act to eliminate concurrent state court jurisdiction for state court claims. The authors also examine the steps companies should take now in light of the possibility of facing litigation in both state and federal court. I would like to thank the authors for their willingness to allow me to publish their article as a guest post. 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 an article. Here is the authors’ article.
Continue Reading Guest Post: Section 11 Claims May Remain in State Court; How Will Companies and D&O Carriers Respond?

Priya Cherian Huskins

As I noted in prior posts, in March 2018, the U.S. Supreme Court held in the Cyan case that state courts retain concurrent jurisdiction for liability actions under the Securities Act of 1933. This development has been regarded as primarily a concern for IPO companies.  However, as discussed in the attached guest from Priya Cherian Huskins of Woodruff Sawyer, the Supreme Court’s affirmation of concurrent state court jurisdiction for ’33 Act claims may also be a concern for M&A companies as well.  A version of this article was previously published in Woodruff Sawyer’s D&O Notebook. I would like to thank Priya for her willingness to allow me to publish her article as a guest post on this 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 Priya’s article.Continue Reading Guest Post: A New Twist in M&A Litigation: Section 11 Cases in State Court

When the U.S. Supreme Court confirmed in its March 2018 Cyan decision that state courts retain concurrent jurisdiction over ’33 Act liability actions, commentators suggested that plaintiffs’ lawyers would opt to pursue Section 11 claims in state court, either in preference to or in addition to parallel federal court actions. Indeed, in many lawsuits filed in the past few months involving IPO companies, plaintiffs’ lawyers have indeed resorted to state court. However, a recent decision from a Texas state court highlights the fact that  whatever advantages the plaintiffs’ lawyers may think they have by proceeding in state court, their claims will still face scrutiny – and in the specific case at issue in Texas, dismissal. As noted in a November 13, 2018 Law 360 article (here), the Texas court’s dismissal is among the first by a state court following the U.S. Supreme Court’s decision in Cyan.
Continue Reading Texas State Court Dismisses Post-Cyan Securities Act Lawsuit

Boris Feldman
Ignacio Salceda

As I discussed in a post last week, on March 20, 2018 the U.S. Supreme Court unanimously held in Cyan, Inc. v. Beaver County Employees Retirement Fund that the Securities Litigation Uniform Standards Act of 1998 (SLUSA) did not eliminate state courts’ concurrent jurisdiction to hear liability lawsuits alleging only violations of the Securities Act of 1933. In the following guest post, Boris Feldman and Ignacio Salceda of the Wilson Sonsini law firm review the court’s decision and consider what may be next for claimants and for companies. A version of this article previously was published on Law 360. I would like to thank Boris and Ignacio for their willingness to allow me to publish their article as a guest post on this 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 Boris’s and Ignacio’s article.
Continue Reading Guest Post: After Cyan — Some Prognostications