Plaintiff-investors commenced a class action suit alleging a violation of the Securities and Exchange Act of 1934 on behalf of all persons who purchased shares of defendant NVIDIA’s stock during a 9-month period. The plaintiff alleged that NVIDIA and its employees had misrepresented or omitted material facts related to manufacturing defects in its computer processors, and that they were damaged when the NVIDIA stock price dropped once the extent of the defects became known. The U.S District Court for the Northern District of California dismissed the plaintiffs’ action because the complaint failed sufficiently to plead scienter as required for securities fraud.Continue Reading California District Court Dismisses Securities Fraud Class Action Suit

Authored by Jason Clouser.

The U.S. Court of Appeals for the Eleventh Circuit vacated a District Court’s entry of summary judgment on plaintiff shareholders’ claims against an internet commerce company, finding that the defendants could be held liable for knowingly reinforcing false information and thereby preventing already existing stock price inflation from dissipating.Continue Reading Fraudulent Statements That Maintain Inflated Price Can Support Securities Fraud Claims

Authored by Jason Clouser.

The U.S. Court of Appeals for the Eleventh Circuit affirmed a District Court’s grant of summary judgment to an insurer, agreeing that the alleged violations of the Fair and Accurate Credit Card Transaction Act (FACTA) did not constitute a “publication” under the insurance policy in question and, therefore, did not trigger a duty to defend.Continue Reading Provision of Credit Card Receipt Is Not A “Publication” That Triggers Duty To Defend

Co-authored by Jason Clouser

The Supreme Court of Delaware recently held that creditors of insolvent Delaware limited liability companies (LLCs) lack standing to bring derivative suits on behalf of the LLCs.Continue Reading Creditors of Insolvent Limited Liability Companies Cannot Sue Derivatively

Co-authored by Jason Clouser

The U.S. Court of Appeals for the Seventh Circuit dramatically reduced damages awarded to a defunct internet marketing company, finding that the company squandered its opportunity to provide a reasonable estimate of the harm it suffered as a result of the defendant’s conduct.Continue Reading Seventh Circuit Cuts Damages Award Due to Lack of Evidence of Lost Profits

The United States Court of Appeals for the Second Circuit found in favor of the trustee (the Trustee) presiding over the liquidation of Bernard L. Madoff Investment Securities (BMIS), affirming the Trustee’s calculation of “net equity” in the BMIS liquidation. The Trustee calculates net equity to determine the value of claims submitted by victims of Madoff’s massive fraud.
Continue Reading Second Circuit Affirms Madoff Trustee’s Net Equity Calculation

Customers who had signed cell phone contracts with Verizon and AT&T, brought a class action against the collection agency that the phone companies hired to collect unpaid fees and charges. The complaint alleged that the agency, Collecto, Inc., violated the Fair Debt Collection Practices Act and New York’s consumer protection statute and committed common law fraud by seeking payment of collection costs in addition to the unpaid fees owed to phone companies. Collecto moved to compel the plaintiffs to arbitrate their claims, arguing that the mandatory arbitration clauses in the agreements between the plaintiffs and the phone companies should also apply to Collecto.Continue Reading Court Finds Arbitration Clauses Cell Phone Contracts do not Apply to Collection Agency

Co-authored by Elizabeth D. Langdale

The Delaware Court of Chancery has upheld the assignment of a Delaware limited liability company membership interest, including the voting rights associated with that interest, to an existing member of the LLC. Omniglow LLC had three members: (i) plaintiff Achaian, Inc., which owned 20% of Omniglow; (ii) defendant Leemon Family LLC, which owned 50% of Omniglow; and (iii) Randye M. Holland, who had owned a 30% membership interest in Omniglow. In January 2010, Holland purported to transfer and assign its entire 30% interest to Achaian. Achaian then filed suit seeking an order of dissolution of Omniglow, asserting that it and Leemon were deadlocked with respect to the management of the company. Leemon opposed the motion, arguing, among other things, that Holland could not assign his voting rights in the LLC without Leemon’s consent.Continue Reading Delaware Court Upholds Transfer of Voting Interests to an Existing LLC Member