San Francisco Managing Partner Nicole Lavallee took part in a discussion of the securities litigation landscape as part of a Securities Roundtable published recently in California Lawyer magazine.
Ms. Lavallee was the only plaintiffs’ advocate among the five attorneys participating in the roundtable, a summary of which appeared in the January 2015 issue of the magazine. Prompted by moderator Cherree Peterson, the lawyers offered opinions about the impact of recent state and federal court decisions affecting securities cases.
The roundtable first focused on the ATP Tour, Inc. v. Deutscher Tennis Bund decision, in which the Delaware Supreme Court upheld the facial validity and enforceability of fee-shifting provisions, which require plaintiffs who fail to achieve substantially everything they seek in court to pay defendants’ legal costs. During the discussion, Ms. Lavallee said that shifting all litigation costs to plaintiffs could have “a chilling effect on meritorious litigation.” She also expressed hope that elected officials would impose a legislative remedy or convince the SEC to take action against such bylaws. Though the May 2014 ATP ruling involved a privately held, non-stock corporation, at least 40 public companies have since enacted similar bylaws, eliciting strong reactions from investor advocates.
Another landmark cases discussed at the roundtable included Halliburton Co. v. Erica P. John Fund Inc., in which the U.S. Supreme Court declined to overturn the fraud-on-the-market theory that underpins many securities fraud class actions but offered some new options for defendants at the class certification stage. While agreeing that the cost of obtaining class certification would likely increase as a result of the June 2014 ruling, Ms. Lavallee noted that law firms like Berman DeValerio won’t change the way they recommend cases to clients, since they conduct serious investigations before even filing a case.
“As a practical matter, you don’t want to get into a case where you don’t feel that you can show loss causation and materiality. They’re expensive to litigate. If you’re not going to get anything at the end of the day, why bother?” Ms. Lavallee said. “So it’s something that we look at very carefully at the start of the case.”
The group also discussed Indiana State District Council of Laborers v. Omnicare, a case currently before the U.S. Supreme Court in which the justices are considering whether to narrow the circumstances under which a statement contained in stock offering documents would be considered false. Finally, the attorneys talked about the SEC’s increased use of administrative proceedings in insider trading cases.
*In August 2017, our firm name changed to Berman Tabacco. Case references and content published before that date may refer to the firm under our prior name, Berman DeValerio.