Julie Pechersky

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The U.S. Court of Appeals for the District of Columbia Circuit sharply criticized the Securities and Exchange Commission and vacated Exchange Act Rule 14a-11, which permitted certain shareholders of public companies to nominate candidates for the board of directors outside a company’s normal nomination process. As noted in last week’s edition of the Corporate and Financial Weekly Digest, the court held that the SEC was "arbitrary and capricious" in promulgating Rule 14a-11 and thus violated the Administrative Procedure Act in failing to adequately consider the Rule’s effect upon efficiency, competition and capital formation.

Continue Reading Court Vacates SEC Shareholder Nomination Rule

Co-authored by Elizabeth D. Langdale

The U.S. Supreme Court overturned certification of a class of 1.5 million current and former female employees of Wal-Mart Stores, Inc. in the largest sex discrimination case in history. In a 5-4 decision, the Court found that plaintiffs had not cleared the "commonality" hurdle for class certification set by Federal Rule of Civil Procedure 23(a)(2), which requires parties to prove that claims of putative class members share common questions of law and fact.Continue Reading Supreme Court Sets High Bar for Class Action Suits

Co-authored by Elizabeth D. Langdale

The U.S. District Court for the Western District of Washington imposed monetary sanctions on plaintiff Play Visions, Inc. and its counsel for failure to search for documents in a timely fashion, delayed and inadequate document production, false certification that the relevant records were maintained only in paper format, and for counsel’s specific failure to adequately understand the client’s document retention system or assist in production.Continue Reading Monetary Sanctions Imposed on Counsel and Client for Discovery Violations

Co-authored by Jessica M. Garrett

The U.S. Court of Appeals for the Federal Circuit recently reviewed the decisions in Micron Tech., Inc. v. Rambus, Inc., 225 F.R.D. 135, (D. Del. 2009) (Micron I), and Hynix Semiconductor, Inc. v. Rambus, Inc., 591 F.Supp.2d 1038 (N.D.Cal. 2006) (Hynix I), two cases that analyzed substantially identical facts but reached widely disparate conclusions. In each case, the plaintiff alleged that Rambus, Inc. committed spoliation by destroying potentially relevant documents pursuant to a document destruction policy at two company-sponsored "shred days." In both cases, the question of spoliation turned on the point at which litigation was reasonably foreseeable. The U.S. District Court for the District of Delaware determined that Rambus had committed spoliation because litigation was reasonably foreseeable prior to the destruction of documents, and issued sanctions against Rambus. Conversely, the U.S. District Court for the Northern District of California concluded that litigation was not reasonably foreseeable until after certain documents had already been destroyed, and did not sanction Rambus.Continue Reading Federal Circuit Addresses Duty to Preserve

Co-authored by Jonathan Rotenberg

The U.S. District Court for the Southern District of New York granted defendant United States’ motion to dismiss a complaint brought by former investors in the investment advisory firm Bernard L. Madoff Investment Securities LLC (BMIS) seeking money damages under the Federal Tort Claims Act (FTCA) for losses suffered by plaintiffs…

Co-authored by Jessica M. Garrett

Shareholders of MetroPCS Communications, Inc., the nation’s fifth-largest wireless communications provider, filed a federal securities class action against the company and certain of its officers, alleging that defendants made materially false or misleading statements or omissions regarding the company’s future prospects that artificially inflated the value of MetroPCS common stock…

Co-authored by Gregory C. Johnson

A New York statute that requires a corporation’s largest investors to guarantee employee wage payments does not require such investors to satisfy penalties owed workers under Indiana law.

Employees of Waste Reduction, Inc. sued the bankrupt company for overdue wages and penalties, as permitted under Indiana law, but were unable…