Sarah Eichenberger
Jonathan Rotenberg

As I noted in a post at the time, last Fall, the U.S. Supreme Court in the Macquarie Infrastructure Corporation v. Moab Partners, L.P. case agreed to take up the question of whether whether the failure to make disclosure required by Item 303 of Reg. S-K is an actionable omission under Section 10(b) and Rule 10b-5. In January, the Court heard oral argument in the case. In the following guest post, Sarah Eichenberger and Jonathan Rotenberg, Partners in the Securities Litigation practice at the Katten law firm, discuss the questions the Justices as asked the oral argument and assess the possible outcomes of the case, as well as the potential significance of the outcomes. I would like to thank Sarah and Jonathan 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah and Jonathan’s article.Continue Reading Guest Post: Supreme Court Considers Whether Pure Omissions Can Support Section 10(b) Liability

The U.S. Supreme Court – in a short, concise, unanimous opinion – has ruled that to assert Section 11 claims against Slack in connection with the company’s June 2019 direct listing, the plaintiff must plead and prove that he purchased shares pursuant to Slack’s allegedly misleading registration statement. Slack had offered both registered and unregistered shares in the direct listing. Even though the plaintiff had not alleged that the shares he purchased were registered shares, the Ninth Circuit had allowed the plaintiff’s claims to stand. The Supreme Court vacated the Ninth Circuit’s order and remanded the case to the district court. At a minimum, the Supreme Court’s ruling means Section 11 plaintiffs must plead that their shares are traceable to the offering. The practical implication of the Court’s ruling may be that the companies conducting direct listings cannot be sued under Section 11. A copy of the Court’s June 1, 2023, opinion can be found here.Continue Reading Even in Direct Listing, Section 11 Plaintiff Must Trace Shares to Registration Statement

The U.S. Supreme Court has agreed to take up a case that will address the question of whether or not a claimant alleging that his employer fired him in retaliation for whistleblowing must prove that the employer acted with retaliatory intent. The court’s consideration of the case has important implications for claimants under the Sarbanes-Oxley Act’s anti-retaliation provisions, because claimants could face significantly greater difficulty in establishing their claims if they must prove that the employer acted with subjective intent to retaliate. The case could also have important implications for retaliation claims under other federal whistleblower protection laws. The Court’s May 1, 2023, order agreeing to take up the case can be found here.Continue Reading Supreme Court To Consider Whether Whistleblower Must Show Retaliatory Intent

The case pending before the U.S. Supreme Court in which the Court was to consider the applicability of the PSLRA’s discovery stay in state court ’33 Act actions has been suspended by the Court at the parties’ request. The parties apparently have reached a tentative settlement of the underlying matter and jointly requested that the Court hold the matter in abeyance, pending the parties’ efforts to complete settlement documentation.
Continue Reading U.S. Supreme Court Suspends Case Addressing Discovery Stay in State Court ’33 Act Suits

In a little noticed-development last week, the U.S. Supreme Court denied the petition for a writ of certiorari in Hagan v. Khoja, in which former officials of a bankrupt pharmaceutical company sought to have the Court review a decision by the Ninth Circuit to revive a securities class action lawsuit against them. Had the petition been granted, the Court would have been called upon to consider the controversial question of whether public companies have a duty to update prior disclosures that were accurate when made. The Court’s cert denial leaves the Ninth Circuit’s ruling standing and the questions surrounding the existence and requirements of a duty to update remain unsettled. The Court’s May 20, 2019 order can be found here.  
Continue Reading Supreme Court Denies Cert Petition in Duty to Update Case

On January 4, 2019, the U.S. Supreme Court granted cert in a case that will determine what a plaintiff must plead in order to state a claim for false statements or omissions in connection with a tender offer under Section 14(e) of the Securities Exchange Act of 1934. The Ninth Circuit held in the case at issue that a plaintiff needs only plead negligence, differing on the issue from at least five different federal circuit courts that had previously held that in order to establish a claim a plaintiff must plead that the defendants acted with scienter. The U.S. Supreme Court’s ruling in the case could have a significant impact on merger objection lawsuits filed in connection with tender offers. The Supreme Court’s January 4, 2019 order in Emulex Corporation v. Varjabedien can be found here.
Continue Reading Supreme Court to Consider Whether Negligence Sufficient to State Section 14(e) Tender Offer Claims

Noelle Reed

Austin Winniford

Caroline Van Zile

As I noted at the time, in December 2017, the U.S. Supreme Court granted cert in China Agritech Inc. v. Resh to take up the question of whether the prior filing of a class action lawsuit tolls statutes of limitation to permit previously absent class members to bring a subsequent class action outside the applicable limitations period. Oral argument in the case took place on Monday, October 26, 2018. In the following guest post, Noelle Reed, Austin Winniford,  and Caroline Van Zile of the Skadden Arps law firm provide their analysis of the oral argument. 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’ guest post.

****************************************Continue Reading Guest Post: Supreme Court Weighs Whether To Extend American Pipe Tolling

I have had this perception for several years now that the U.S. Supreme Court recently has been particularly keen to take up securities cases. It turns out that this perception has a basis in objective fact. A recent paper by University of Toledo law school Professor Eric Chafee confirms that since John Roberts became Chief Justice in 2005, the Court has averaged two securities opinions per court term, twice the number of the prior Rehnquist Court. Indeed, as the number of cases overall on which the Court has granted cert has continued to shrink, the securities cases have become an increasingly significant component of the Court’s docket. The current term is no exception; the Court began the term with three securities cases on its docket (although a recent settlement in one of the cases reduced the number to two).

The Court is showing its securities law proclivities once again. On Friday, December 8, 2017, the Court granted cert in yet another securities law case. The Court’s December 8, 2017 Order granting the petition for a writ of certiorari in China Agritech Inc. v. Resh can be found here. As Professor Chafee notes in his recent paper, many of the securities cases the Roberts court has taken up in recent years have involved issues “at the periphery of securities laws.” The new case the Court has taken up arguably is no exception to this generalization. The China Agritech case is in fact the second case the Court has taken up in successive terms involving statute of limitations tolling issues under the Court’s American Pipe tolling doctrine.
Continue Reading U.S. Supreme Court Grants Cert in Yet Another Case Securities Law Case

As I noted at the beginning of the U.S. Supreme Court’s current term in my summary of securities cases on the Court’s docket, one of the three key securities cases the court was to consider this term was Leidos, Inc. v. Indiana Public Retirement Systems. As discussed in greater detail here, this case, which was to be argued on November 6, 2017, was to address the recurring question of whether the failure to make disclosure required by Item 303 of Reg. S-K is an actionable omission under Section 10(b) and Rule 10b-5. However, as a result of developments in the case, the case is now in “abeyance,” oral argument in the case has taken off the calendar, and the case ultimately may be removed from the court’s docket altogether.
Continue Reading Item 303 Disclosure Duty Case Off Supreme Court’s Docket Due to Reported Settlement

For almost the entire time that there have even been federal securities laws, the U.S. Supreme Court only rarely and infrequently agreed to take up cases arising securities cases. Until recently, years would pass between the times that securities cases appeared on the Supreme Court’s docket. For some reason, beginning around the middle of the last decade, the Court has become increasingly willing to take up securities cases. The U.S. Supreme Court’s 2017-2018 term, which commences on Monday, is no exception to this recent trend. There are three important securities cases on the Court’s docket for the upcoming term, and these cases could have, both individually and collectively, a significant impact on many securities law cases and on securities litigation in general.
Continue Reading Three Key Securities Law Cases on Supreme Court’s Docket as Term Begins