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A host of macroeconomic factors continue to weigh on the U.S. economy, including rising interest rates, economic inflation, and supply chain and labor supply disruption. Geopolitical factors such as the War in Ukraine and now the Gaza war in Israel further complicate the picture. These various factors have serious ramifications for the operations of many businesses and for their financial performance. In some cases, the impact of these factors on companies can also translate into securities litigation. In the latest example of this phenomenon, the auto parts company Advance Auto Parts has been hit with a securities class action following a decline the price of the company’s share price after the company announced that its “strategic pricing initiative” was not sufficient to avert the impact of inflation and other macroeconomic factors on the company’s financial performance. A copy of the October 9, 2023, complaint filed against the company can be found here.

Continue Reading Inflation Weighs on Company Performance, Leads to Securities Suit

One phenomenon I have been tracking over the years is the rise in jurisdictions outside of the U.S. of procedural mechanisms for collective redress, particularly in the U.K (as noted, for example, here) and the E.U. (as noted here). While I have always been careful to note the important differences between these collective action mechanisms and the U.S.-style class action approach, it may be the case that as time has passed and as procedures have developed and evolved, the mechanisms many jurisdictions are adopting increasingly are coming to resemble the U.S.-style class actions model.

As an October memo from the Jones Day law firm puts it, class action litigation “is no longer a US-specific phenomenon.” The law firm memo, which is entitled “The Rise of US-Style Class Actions in the UK and Europe,” states that the growth in the UK and EU of group litigation has been “exponential” and the rise of these actions is a “key corporate risk that will only continue to increase.” The law firm’s memo can be found here.

Continue Reading The Rise of Group Actions in the U.K and the E.U.

One of the significant trends over the last several years contributing to the overall total volume of securities class action lawsuit filings has been the relative prevalence of securities suits related to SPACs and post-SPAC merger companies. Even though it has now been a considerable amount of time since the SPAC IPO frenzy peaked in the first half of 2021, the lawsuits relating to SPACs and post-SPAC-merger companies continue to be filed. In the latest example of this phenomenon, last week a plaintiff shareholder filed a securities class action lawsuit against the vertical aviation company Archer Aviation and certain of its directors and officers. Archer became a publicly traded company through a September 2021 merger with a SPAC. As discussed below, the new lawsuit against Archer has certain features in common with many of the previously filed SPAC-related lawsuits. A copy of the complaint filed against Archer Aviation can be found here.

Continue Reading Electric Vertical Aviation Company Hit with SPAC-Related Securities Suit

As the phenomenon of ESG-related litigation has developed and evolved in recent months, it has unfolded that the lawsuits are not, as was expected, being filed against ESG laggards, but instead are being filed against companies that were proactive on ESG-related issues. One of the cases illustrating this development is the securities lawsuit filed against the consumer products company Unilever, based on allegations that the company had failed to disclose a resolution passed by the independent board of its Ben and Jerry’s subsidiary to end ice cream sales in occupied Israeli territories. On August 29, 2023, In a ruling that suggests that these kinds of ESG-related cases could face challenges, Southern District of New York Judge Lorna Schofield granted the defendants’ motion to dismiss the lawsuit, on the grounds that the plaintiff had failed to sufficiently plead scienter. A copy of the August 29 opinion and order can be found here.

Continue Reading ESG-Related Suit Against Unilever Based on Ben & Jerry’s Board’s Resolution Dismissed

In my recent roundup of the top stories in the world of directors’ and officers’ liability and insurance, I noted that a host of macroeconomic factors – such as supply chain disruptions and labor supply constraints — continue to weigh on companies and, in some instances, translate into securities class action litigation. I have also noted in numerous prior posts how COVID-19 has itself resulted in securities lawsuit filings. In the latest example of a securities suit filing resulting from these various phenomena, last week a shareholder plaintiff filed a securities lawsuit against the robotic aircraft systems development and service company AeroVironment after the company delivered disappointing results due to supply chain woes resulting from COVID-19. The complaint is both representative of these types of cases and illustrative of how these kinds of concerns, even after a significant time lag, can result in a current securities lawsuit filing. A copy of the plaintiff’s August 30, 2023, complaint can be found here.

Continue Reading Robotic Aircraft Company Hit with COVID-19 and Supply Chain-Related Securities Suit

As I have noted on this site, for the last several years (going back at least to 2021, and arguably even further than that), one of the significant factors contributing to securities class action lawsuit filings has been the number of SPAC-related securities suits. In the latest sign that the trend of SPAC-related securities suit filings is continuing, on August 23, 2023, a plaintiff shareholder filed a securities suit in the Southern District of Florida against medical payments collection firm MSP Recovery and certain of its executives, as well as against the directors and officers of the SPAC into which the company merged in 2022. A copy of the plaintiff’s complaint can be found here. PLEASE ALSO SEE THE UPDATE, below.

Continue Reading SPAC-Related Securities Suit Filed Against Medical Payments Recovery Firm

In early August 2023, wildfires broke out on the Hawaiian island of Maui. The wildfires caused the deaths of at least 115 people, and also caused massive property damage. In the aftermath, questions began to circulate about what had caused the fires. Among those under the spotlight is Hawaii’s largest electrical utility, Hawaiian Electric Industries. Indeed, on August 24, 2023, Maui County filed a lawsuit against the utility, alleging that its power lines caused the wildfire. With the adverse publicity, the utility’s share price has slumped. Now, a plaintiff shareholder has filed a securities lawsuit against the company. As discussed below, the new securities lawsuit may represent something of a prototype for future litigation involving companies whose business operations are disrupted by changing climate conditions and by the increase in extreme weather conditions and events. A copy of the securities suit complaint can be found here.

Continue Reading Electric Utility Linked to Maui Wildfires Hit with Securities Suit

Long-time readers know that a litigation phenomenon on which I have frequently commented is the filing of securities class action lawsuits in the wake of antitrust enforcement actions. These follow-on civil actions represent something of a translation of an antitrust matter into a securities lawsuit. In the latest example of this phenomenon, a plaintiff shareholder has filed a securities suit against the concert company Live Nation following news reports of an imminent U.S. Department of Justice antitrust lawsuit against the company and its ticketing service Ticketmaster relating to allegations that the concert company pressures clients to use the ticketing service. The new lawsuit raises a number of interesting issues, as discussed below. A copy of the August 4, 2023 complaint can be found here.

Continue Reading Antitrust Enforcement Leads to Follow-On Securities Suit Against Live Nation

The number of federal court securities class action lawsuit filings in the first half of 2023, if annualized, suggests a year-end total number of filings that would represent a 15% increase over the number of filings in 2022, according to a new report from NERA Economic Consulting. The report, which is entitled “Recent Trends in Securities Class Action Litigation: H1 2023 Update,” also reports that while average securities suits settlement values were down in the year’s first half compared to 2022, the median suit settlement increased compared to 2022. A copy of the August 2, 2023, NERA report can be found here. NERA’s August 2, 2023 press release regarding the report can be found here.

Continue Reading NERA: First Half Securities Suit Filings Point to Overall Full-Year Increase