litigation trends

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Jeffrey Lubitz
Duncan Paterson

In the following guest post, Jeffrey Lubitz and Duncan Paterson take a look at the increasing numbers of class action lawsuits being filed against non-U.S. companies, and in particular how ESG issues may be the driving factor in multi-country cases. Jeff is the Executive Director of ISS Securities Class Action Services and Duncan Paterson is the Head of ESG Thought Leadership Program, ISS ESG. A complete copy of this article is available on the ISS Securities Class Action Services website, here. I would like to thank Jeff and Duncan for allowing 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 Jeff and Duncan’s article.
Continue Reading Guest Post: Growing Number of Non-U.S. Companies Facing Class Actions

In the latest SPAC-related securities class action lawsuit filing, a plaintiff shareholder has initiated a securities suit against Agtech company AppHarvest, alleging material misrepresentations after the company recently experienced a stock price drop. A copy of the plaintiff’s September 24, 2021 securities class action lawsuit complaint can be found here.
Continue Reading AgTech Company Hit with SPAC-Related Securities Lawsuit

In an interesting development, the U.S. District Court Judge overseeing the cybersecurity-related securities class action lawsuit pending against title insurance company First American Financial Corp. has granted the defendants’ motion to dismiss. The dismissal in the case is interesting because the company had in June 2021 agreed with the SEC to enter a cease-and-desist order and to pay a modest civil penalty to settle charges related to the same cybersecurity incident. The dismissal is also interesting because it shows how plaintiffs’ lawyers have struggled to get traction with cybersecurity-related securities suits. A copy of the Court’s September 22, 2021 order granting the motion to dismiss in the First American securities suit can be found here.
Continue Reading Cybersecurity-Related Securities Suit Dismissed

In my recent roundup of key concerns in the world of directors’ and officers’ liability, I discussed the COVID-19-related litigation phenomenon, commenting that notwithstanding the lapse of time since the coronavirus’s initial outbreak there would likely be further pandemic-related lawsuits yet to come. As if to confirm the suggestion, last week a shareholder plaintiff filed a COVID-19 related securities class action lawsuit against the actress Jessica Alba’s personal care consumer products company, The Honest Company. A copy of the plaintiff’s complaint can be found here.
Continue Reading Consumer Products Company Hit with COVID-19-Related Securities Suit

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 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

Last week, when a group of plaintiffs’ attorneys filed a shareholder’s derivative suit against Bill Ackman’s SPAC seeking damages and alleging the company was really an Investment Company that should be registered under the Investment Company Act, I assumed the attorneys filed the suit because it was Ackman’s firm; because of the size and prominence of the SPAC; and because of Ackman’s unusual plan to invest the SPAC’s IPO proceeds in a minority interest. Well, it turns out, the plaintiffs’ lawyers involved were just getting started. They have now filed two more shareholders derivative suits against two other SPACs’ boards and sponsors, based on the same theory as in the Ackman SPAC suit that the SPACs involved are really Investment Companies that should be registered under the Investment Company Act. Looks like these SPACs-are-Investment-Companies suits are a thing now, and this could all get very interesting.
Continue Reading More SPACs-Are-Really-Investment-Companies Derivative Suits Filed

As the pandemic has progressed and as time has passed, one question I am regularly asked is whether we will continue to see COVID-19 related legal actions being filed. If the latest SEC action is any indication, we have not yet seen the last of new COVID-19-related suit filings. On August 17, 2021, the agency filed a civil enforcement action against an Ohio biotech firm claiming that the firm made false claims about one of its products, as a way to suggest that the firm was positioned to profit from the coronavirus outbreak. A copy of the agency’s complaint can be found here.
Continue Reading SEC Files COVID-19-Related Enforcement Suit Against Biotech Firm