One idea circulating since the U.S. Supreme Court held in Cyan that state court Section 11 actions are not removable to federal court is that companies could avoid state court actions by adopting a federal forum bylaw or charter provision. Indeed, a number of companies recently have adopted these provisions prior to going public. Late last year, a shareholder of several IPO companies filed an action in Delaware Chancery Court seeking a judicial declaration that the companies’ Federal Forum Provisions are invalid. On December 19, 2018, Vice Chancellor Travis Laster issued a memorandum opinion agreeing with the plaintiff and holding that under Delaware law, Federal Forum Provisions are invalid and ineffective. A copy of Laster’s opinion can be found here.
Continue Reading Delaware Court Holds Charter Provision Designating a Federal Forum for Section 11 Claims is Invalid
Guest Post: The State Court Section 11 Problem: Three Solutions
One of the more interesting current issues in the securities litigation arena is the question of whether or not the concurrent jurisdiction provisions in the ’33 Act continue to afford state court jurisdiction for Section 11 securities class action lawsuits, or whether the Securities Litigation Uniform Standards Act of 1998 (SLUSA) superseded these provisions. As I noted in a recent post, a corporate defendant recently filed a petition for writ of certiorari with the U.S. Supreme Court to try to get the Court to take up this question. In the following guest post, Priya Cherian Huskins, of Woodruff-Sawyer & Co. examines three different “solutions” that have been proposed to address the ongoing question regarding concurrent state court jurisdiction for Section 11 class action lawsuits. One of the three proposed solutions in the cert petition recently filed with the U.S. Supreme Court, while the other two suggested solutions involve different alternative approaches, including one suggested by Stanford Law Professor Joseph Grundfest.
Continue Reading Guest Post: The State Court Section 11 Problem: Three Solutions
Facts, Opinions, Omissions, and Context: The U.S. Supreme Court Issues Omnicare Opinion
In a March 24, 2015 opinion in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund (here), the U.S. Supreme Court set aside the Sixth Circuit’s ruling that allegations of “objective falsity” were sufficient to make a statement of opinion in securities offering documents actionable. The Supreme Court remanded the case to
Guest Post: Omnicare Decision Clarifies Pleading Standard for Section 11 Claims Based on Statements of Opinion in Registration Statements
As I discuss in the accompanying post, on March 24, 2015, the U.S. Supreme Court issues its opinion in the Omnicare case. In the following guest post, the Skadden law firm summarizes the case and its holding. A version of the guest post previously was published as a Skadden client alert. I would like
Circuit Splits, Arbitration Clauses, and Other Notes from Around the Web
Circuits Split on Pleading Loss Causation: In a December 16, 2014 opinion written by Judge Milan D. Smith, Jr. for a unanimous three-judge panel of the Ninth Circuit, the appellate court affirmed the dismissal of the securities class action lawsuit that had been filed against Apollo Group and certain of its directors and officers. In
Supreme Court to Decide Securities Act Statute of Repose Issue in IndyMac MBS Case
The U.S. Supreme Court has added yet another lawsuit to its growing list of securities law cases by agreeing to take up the IndyMac MBS securities suit, to consider whether the filing of a class action lawsuit tolls the statute of repose under the Securities Act (by operation of so-called “American Pipe” tolling)
U.S. Supreme Court Takes Up Yet Another Securities Case: To Support a Section 11 Claim, Must an Opinion Be Subjectively False?
As if it were not enough that the Court is already considering a case that could change the face of securities class actions (that is, the Halliburton case, which will be argued this week), the U.S. Supreme Court has now agreed to take up yet another securities case.
In a March 3, 2014 order
Now Trending: Initial Public Offerings and IPO-Related Securities Suits
Led by Twitter’s successful offering earlier this year, IPO activity in the U.S. during 2013 has been at its highest levels since 2007. While the listing activity seems to bode well for the general economy as well as for the financial markets, the increased number of IPOs has also led to an uptick in IPO-related
Appellate Courts Set Aside Two Securities Suits Dismissals
In two decisions last week – one in the Sixth Circuit and one in the First Circuit – federal appellate courts set aside lower court dismissals of securities class action lawsuits. Although the two cases are different and the two appellate opinions address different legal issues, the two decisions both seem to suggest a similar
So, There’s Concurrent State Court Jurisdiction for ’33 Act Suits, Right? Well…
On May 18, 2011, the California Intermediate Court of Appeals held in the Luther v. Countrywide Financial Corporation case that state courts have concurrent jurisdiction with federal courts to hear liability lawsuits under the Securities Act of 1933, and that more recent legislative enactments did not eliminate the concurrent state court jurisdiction for the plaintiffs&rsquo