(AGENPARL) – STANFORD (CA) lun 05 giugno 2023

In Slack v. Pirani, the United States Supreme Court voted 9-0 in support of the amicus position I advocated with former SEC Chairman Jay Clayton. Plaintiffs alleged violations of Section 11 of the Securities Act of 1933—a provision that is notoriously difficult to defend against because it creates strict liability for the corporate issuer. The Court held that plaintiffs have to demonstrate that the shares they purchased on the open market were issued pursuant to the allegedly defective registration statement, and not any other shares, even if those other shares are perfectly fungible with registered shares. That can be a very hard burden for many plaintiffs to carry, and will often eliminate claims or reduce potential damage awards. The opinion relies on several points of statutory construction and regulatory interpretation that are unique to our brief.

But, as I point out, the Supreme Court remanded the case to the Ninth Circuit. There, plaintiffs can try to prove their shares were covered by the allegedly defective registration statement and will also argue that Slack is liable under Section 12 of the Securities Act. Plaintiffs aren’t dead yet. This remand can lead to very complicated additional litigation, and it’s easy to see this case coming back to the Supreme Court presenting novel questions about the scope of Section 12 liability.

The second victory of the day was in Lee v. Fisher where a 6 to 5 sharply split en banc Ninth Circuit enforced a forum selection clause that the Rock Center’s Kristen Savelle and I originally laid out in this  article requiring that derivative claims be heard in the courts of the state of incorporation. The forum selection clause was enforced even though enforcing the provision effectively extinguished the underlying claim because only federal courts are authorized to rule on that claim. The opinion addresses complex questions at the intersection of statutory interpretation, civil procedure, securities regulation, and corporate law, and relies on scholarship I co-authored with Professor Mohsen Manesh of Oregon Law School as well as on an amicus brief submitted by us. The opinion also creates a split with a Seventh Circuit case that drew a sharply worded dissent from Judge Easterbrook.

This case has cert written all over it. The Seventh and Ninth Circuits have taken diametrically opposed positions in sharply split opinions addressing complex procedural questions that are catnip for this court. As for the likelihood of prevailing on the merits, bring it on. This case gives the court an opportunity to clarify a range of important questions regarding the federal securities litigation, and I very much like our chances.

Fonte/Source: https://law.stanford.edu/2023/06/05/stanfords-joe-grundfest-on-two-court-big-securities-and-corp-law-decisions/