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As I have documented in prior posts (for example, here), publicly traded life sciences companies are frequent targets of securities class action lawsuits. But life sciences companies’ securities litigation exposure may be well-known, it is not always as appreciated that the securities suits against life sciences companies are often dismissed. Two recent rulings in securities suits against life sciences companies – Antares Pharma and Nabriva Therapeutics – provide recent examples of securities suits in which the courts have granted the companies’ dismissal motions. The rulings illustrate the extent to which life sciences companies often are able to successfully defend themselves against securities suits.
Continue Reading Life Sciences Companies: Frequent Securities Suits Frequently Dismissed

Since the outset of the coronavirus outbreak, a relatively modest number of COVID-19 related securities suits have been filed. However in the past two days, two additional coronavirus-related securities suits were filed, bringing the total number of coronavirus-related securities suits to nine, so far. The two new suits were filed against Sorrento Therapeutics, a biopharma company, and Carnival Corporation, a cruise ship line. The Sorrento complaint can be found here and the Carnival Corporation complaint can be found here.
Continue Reading Two Additional Coronavirus Outbreak-Related Securities Suits Filed

On May 20, 2020, a plaintiff shareholder filed the latest securities class action lawsuit asserting claims based on COVID-19-related allegations. The lawsuit, filed against Elanco Animal Health, Inc., raises allegations concerning the company’s May 7, 2020 earning release, in which the company announced a significant revenue downturn that the company ascribed to the coronavirus outbreak. The complaint alleges that, in connection with the revenue downturn, the company announced that it had made changes in its distribution channels that had affected channel inventory levels and that in turn impacted the company’s financial results. A copy of the complaint can be found here.
Continue Reading COVID 19-Related Securities Suit Filed Against Animal Supply Company

In what is the latest variant of coronavirus-Related D&O claims, a plaintiff shareholder has filed class action lawsuit in Delaware State Court against the board of media technology Xperi with respect to the company’s planned merger with TiVo Corporation. Among other things, the plaintiff alleges that the defendant board members breached their fiduciary duties by failing to provide investors with adequate disclosures about the impact of the coronavirus outbreak on the deal and failing to reassess the deal in view of the fact that the pandemic represents a “Material Adverse Event” under the merger agreement. A copy of the plaintiff’s May 15, 2020 complaint can be found here. Alison Frankel’s May 18, 2020 post about the lawsuit on her On the Case blog can be found here.
Continue Reading Shareholder Files State Court Class Action Over COVID-19 Impact on Planned Merger

In March 2018, the U.S. Supreme Court unanimously held in Cyan that state courts retain concurrent jurisdiction for liability actions under the Securities Act of 1933. As a result, defendants could face the prospect of parallel litigation in both federal and state court, with no means of consolidating the proceedings. In the following guest post, Bruce G. Vanyo, Richard H. Zelichov, Michael J. Lohnes, and Jonathan Rotenberg, all of the Katten law firm, take a look at Cyan’s impact and review some recent positive developments that address some of the concerns Cyan has led to. I would like to thank the authors 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 the authors’ article.
Continue Reading Guest Post: Section 11 Cases in State Court Post-Cyan – Is the Tide Turning?

Here at The D&O Diary, we watch securities class action litigation filings closely in order to try to identify trends as they emerge. Recently, we have been watching in particular for coronavirus-related securities litigation filings, and reporting on new filings on this blog. However, it appears that despite all of our vigilance, a coronavirus-related securities class action lawsuit filed last month escaped our notice. This previously overlooked lawsuit is described below. As noted in the discussion section, this case may actually represent a significant example of at least one type of coronavirus-related securities suit that we may see more of in the months ahead.
Continue Reading Add this Previously Filed Suit to the List of Coronavirus-Related Securities Lawsuits

As part of a continuing series, I have been participating in sessions that the Professional Liability Underwriting Society (PLUS) has organized addressing the potential D&O liability and insurance issues arising out of the COVID-19 outbreak. I have been joined in these recorded sessions by my good friends Carl Metzger of the Goodwin Procter law firm…

In early March, when I first wrote about the possibility of coronavirus-related D&O claims, there were then a total of 43 confirmed cases of COVID-19 in the U.S. and six deaths. In early April, when I published my first interim update to my initial post, the number of confirmed COVID-19 cases in the U.S. had grown to 267,436 and the number of deaths was over 10,400. Now, a month later, the number of confirmed cases in the U.S. has exceeded 1.2 million and the number of deaths is over 78,000. By now it is apparent that the coronavirus-outbreak represents the most significant public health crisis in the U.S. in more than a century. The disease has also had a massive impact on the economy, both within the U.S. and globally, in ways that are only now starting to be fully appreciated.
Continue Reading Coronavirus and D&O Insurance: The Latest Interim Update

As local coronavirus pandemic-related stay-at-home orders expire or are withdrawn over the coming weeks, employees will be returning to the workplace. According to a recent blog post, a “wave of workplace class actions” could follow in connection with the return to work. In an April 26, 2020 blog post on the Workplace Class Action Blog entitled “The Coming Surge of Workplace Class Actions in the Wake of COVID-19” (here), Gerald Maatman and Jennifer Riley of the Seyfarth Shaw law firm predict a surge of workplace lawsuits “in several key areas such as discrimination and workplace bias, wage & hour, as well as on the health & safety front.”
Continue Reading Will a Wave of Workplace Lawsuits Follow the Return to Work?

Although Delaware’s courts recognized a cause of action for directors’ breach of the duty of oversight in the 1996 Caremark decision, claims against directors based on alleged oversight duty breaches have long been seen as difficult to plead and prove. However, in two 2019 rulings – the Marchand v. Barnhill decision (discussed here) and the Clovis Oncology decision (discussed here) – Delaware courts allowed breach of the duty of oversight claims to proceed. Now in a more recent ruling, the Delaware Court of Chancery has allowed yet another duty of oversight claim to proceed.

As noted in a May 1, 2020 post on the Duane Morris Delaware Business Law Blog (here), the most recent Delaware duty of oversight ruling reinforces the view that “directors and officers who neglect their oversight responsibilities may be personally liable for resulting harm to the company and its stockholders.” The Delaware Court of Chancery’s April 27, 2020 decision in Hughes v. Hu can be found here.
Continue Reading Another Delaware Breach of the Duty of Oversight Case Survives Dismissal Motion