The US Supreme Court recently held that under the Class Action Fairness Act (CAFA), a defendant need not provide proof of the amount in controversy in its notice of removal to federal court. Only a plausible allegation is required that the amount in controversy meets or exceeds CAFA’s $5 million jurisdictional requirement. This decision clarifies that there is no higher pleading standard to remove a class action under CAFA than in an individual action.
Continue Reading Supreme Court Clarifies Class Action Removal Pleading Standard

The Securities and Exchange Commission recently filed suit in the US District Court for the Southern District of New York, alleging that defendants, Juan Cruz Bilbao Hormaeche and Thomas Andres Hurtado Rourke, both Chilean citizens, illegally traded on material non-public information that Abbott Laboratories was interested in purchasing CFR Pharmaceuticals, S.A., a pharmaceutical company headquartered in Chile.
Continue Reading SEC Charges Chilean Citizens With Insider Trading Concerning Tender Offer for Chilean

The US District Court for the Northern District of California recently dismissed a securities fraud class action against Electronic Arts, Inc. (EA) and named officers and directors, holding that optimistic statements about EA’s ability to transition to next-generation gaming consoles were mere puffery. 

In early 2013, EA began development on a sequel to one of its most profitable titles, Battlefield 4, and announced that the new game would be playable on next-generation gaming consoles, Sony PlayStation 4 and Microsoft Xbox One. During the development and release period—between May 2013 and December 2013—EA representatives made positive statements about Battlefield 4, emphasizing EA’s ability to transition with the next-generation consoles, contrary to what plaintiffs describe as EA’s prior history of disastrous game-launch and console-transition failures. After an October 29 launch, the company received complaints from customers and negative reviews from critics regarding the game’s playability. EA’s stock price dropped from a high of $27.99 to $21.01 on December 5, 2013. In late 2013 and early 2014, plaintiffs brought separate actions alleging securities fraud, which were consolidated in February 2014.
Continue Reading District Court Holds Video Game Company’s Optimistic Statements Are Not Actionable

The US District Court for the Western District of Washington recently dismissed a securities fraud class action against Zillow, Inc. and named officers and directors, holding that the material omissions plaintiff alleged were already known to the market. 

Zillow is an online real estate marketing company that derives revenue from online advertisements, including a subscription service for local real estate agents. Subscribers are referred to as Zillow’s Premier Agents. In early 2012, Zillow announced that it would implement a new pricing model for its Premier Agents. Plaintiffs alleged that Zillow withheld material information about difficulties encountered in its new pricing model. Among other claims, plaintiffs alleged that Zillow should have disclosed its Static Average Revenue Per Customer (ARPU), which they claimed would have illustrated whether Zillow was successfully implementing the new pricing plan. According to plaintiffs, when Zillow released its ARPU in early November 2012, it “shocked the market” for Zillow stock. Plaintiffs filed a complaint alleging securities fraud in late November 2012.
Continue Reading Securities Class Action Dismissed Where Information Was Publicly Available