litigation trends

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As I have previously noted, 2018 was another extraordinary year for U.S. securities class action litigation, as filings overall remained at near-historical rates. One of the significant contribution factors to this development was the substantial number of securities suits filed against life sciences companies. The number and significance of the securities suits filed against life sciences companies is detailed in a February  6, 2019 report from the Dechert law firm entitled “Dechert Survey: Developments in U.S. Securities Fraud Class Actions Against Life Sciences Companies: 2018 Edition” (here).
Continue Reading A Detailed Look at 2018 Securities Litigation Against Life Sciences Companies

The number of federal court securities class action lawsuit filings remained “near record levels” during 2018, according to the latest report published by  Cornerstone Research in conjunction with the Stanford Law School Securities Class Action Clearinghouse. State court securities lawsuit filings, detailed in the report, drove securities class action litigation filing activity to even higher levels during 2018, arguably to the highest levels ever. According to the report, the likelihood of a U.S.-listed company getting hit with a securities suit was higher in 2018 than it has ever been. Driven by the sheer volume of litigation and the number of lawsuits against larger companies, the 2018 securities suit filings represented an aggregate market capitalization loss of over $1 trillion. The Cornerstone Research report, entitled “Securities Class Action Filings: 2018 Year in Review,” can be found here. Cornerstone Research’s January 30, 2019 press release can be found here. My own review of the 2018 securities class action lawsuit filings can be found here.
Continue Reading Cornerstone Research: Combined Federal and State Securities Suit Filings at Highest-Ever Levels in 2018

During 2017 and 2018, plaintiffs’ lawyers filed a number of securities class action lawsuits against companies that had experienced data breaches. Among the highest profile of these cases was the securities lawsuit filed in 2017 against the credit rating firm, Equifax, which in September 2017 announced that hackers had breached its consumer database and accessed millions of records containing personally identifiable information. On January 28, 2019, in a ruling that will be closely analyzed in connection with the several other recently filed data breach-related securities lawsuits, Northern District of Georgia Judge Thomas W. Thrash, Jr. entered an order granting in part and denying in part the defendants’ motion to dismiss. A copy of the January 28 order can be found here.
Continue Reading Equifax Data Breach-Related Securities Suit Dismissal Motion Denied in Part, Granted in Part

The pace of federal court securities class action filings during 2018 was “the highest since the aftermath of the 2000 dot-com crash,” according to a recent report from NERA Economic Consulting. Not only were the filings during the year at significantly elevated levels, but the filings “accelerated over the second half of the year, with the fourth quarter being one of the busiest on record.” As noteworthy as the filing trends are, the elevated filing pace “masked fundamental changes in the filing characteristics,” including the shift toward significantly higher amounts of investor losses. Average and median settlement levels also jumped significantly during the year, compared to the year prior. The January 29, 2019 report, entitled “Recent Trends in Securities Class Action Litigation: 2018 Full-Year Review” can be found here. NERA Economic Consulting’s January 29, 2019 press release about the report can be found here. My analysis of the 2018 federal court securities class action lawsuit filings can be found here.
Continue Reading NERA Economic Consulting: Securities Suit Filings at Highest Level in Years

A big factor in the heightened levels of securities litigation filings in 2018 and one of the most important recent litigation trends has been the rise of event-driven securities litigation. These are securities lawsuits based not – as was the case in the past – on accounting misstatements or financial misrepresentations, but on setbacks in a company’s operations that affect a company’s share price. In recent months, securities suits have been filed following wildfires, plane crashes and data breaches. Given this trend and in light of the significance of the event, it arguably should be no surprise that plaintiff lawyers have now filed a U.S. securities class action lawsuit after the most recent Brazilian dam collapse, the January 25, 2019 disaster at Brumadinho, in Minas Gerais, Brazil.
Continue Reading Latest Brazilian Dam Disaster Leads to Event-Driven Securities Suit

In recent years, plaintiffs’ lawyers have filed a number of management liability lawsuits against the executives of companies that have experienced high-profile data breaches. These lawsuits have either been filed as shareholder derivative lawsuits or securities class action lawsuits. By and large, the cases filed as shareholder derivative lawsuits have been unsuccessful. However, in a development that represents a milestone in several different respects, the parties to the Yahoo data breach-related derivative lawsuit have agreed to settle the case for $29 million. As discussed below, this settlement may have important implications for future data breach-related derivative litigation. The Court’s January 4, 2019 order approving the settlement can be found here (see calendar Line 5 in the order).
Continue Reading Yahoo Data Breach-Related Derivative Suit Settled for $29 Million

The risk of extreme weather events resulting from climate change and the collective global failure to address climate change represent the most significant current global risks, according to the World Economic Forum’s annual survey of global risks. These kinds of risks represent significant concerns for human safety, social and business disruption, and property loss. As discussed below, and as recent claims have shown, these risks may present management liability concerns as well. The World Economic Forum’s January 15, 2019 Global Risks Report can be found here.
Continue Reading Thinking About the World Economic Forum’s Global Risks Report

In the now more than a year since the #MeToo phenomenon first arose, there have been a number of D&O lawsuits filed against companies and their boards in which the plaintiffs allege that company officials either allowed the alleged sexual misconduct to take place or turned a blind eye. In the latest D&O lawsuits to follow in the wake of allegations of sexual misconduct, two Alphabet shareholders have filed separate derivative lawsuits in California state court against the company’s board based on underlying allegations of alleged sexual misconduct at the company’s Google unit.
Continue Reading Alphabet Board Hit With Derivative Suits Over Alleged Sexual Misconduct at Google

The world of directors’ and officers’ liability is always dynamic, but 2018 was a particularly eventful year in the D&O liability arena. The past year’s many developments have significant implications for what may lie ahead in 2019 – and possibly for years to come. I have set out below the Top Ten D&O Stories of 2018, with an eye toward future possibilities.
Continue Reading The Top Ten D&O Stories of 2018

The heightened pace of securities class action lawsuit filings continued in 2018, as filing levels remained well above historical patterns, even though the total number of suits dipped very slightly compared to 2017. The total number of filings during 2018 was significantly inflated by the number of federal court merger objection lawsuit filings during the year. However, even disregarding the M&A-related lawsuits, the number of traditional lawsuit filings during 2018 was well above long-term averages. Even more significantly, the litigation rate (that is, the number of suits relative to the number of listed companies) arguably was at all-time record high levels in 2018 compared to prior years, as discussed further below.
Continue Reading Securities Suit Filings Continued at Heightened Pace in 2018