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Need-to-Know Litigation Weekly
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Need-to-Know Litigation Weekly

Welcome to A&O Shearman's Need-To-Know Litigation Weekly, which analyzes notable U.S. decisions, orders and developments each week in areas of Securities Litigation, Government/Regulatory Enforcement, M&A and Corporate Governance, Antitrust Litigation and IP Litigation. This weekly newsletter is intended to supplement our various publications and thought leadership concerning these important substantive areas.


By clicking on “Read More” under any case writeup, you can expand beyond the introductory paragraph to read the entire summary and analysis, and you also can access the underlying material. Clicking on any case writeup also automatically takes you to our Need-To-Know Litigation Weekly microsite, which provides separate links to the five substantive areas (Securities Litigation, Government/Regulatory Enforcement, M&A And Corporate Governance, Antitrust Litigation and IP Litigation), each of which contains filters that are searchable both by substantive topic and by time period that will enable you to search and access our existing case summaries and analyses.

Please feel free to contact us at litigation_weekly@aoshearman.com if you would like us to add any of your colleagues to the weekly distribution list.

Securities Litigation

District Of Arizona Grants Motion To Dismiss Shareholder Derivative Suit Against Residential Property Dealer In Connection With De-SPAC Merger

On August 14, 2024, Judge Michael T. Liburdi of the United States District Court for the District of Arizona granted with leave to amend a motion to dismiss a shareholder derivative suit brought in the name of the company, a buyer and seller of residential properties (the “Company”), against numerous current and former directors and officers of the Company as well as directors of the special purpose acquisition company—or SPAC—through which the Company went public (the “Individual Defendants”). Gera v. Palihapitiya, et al., CV-23-02164-PHX-MTL (D. Ariz. Aug. 14, 2024). Plaintiff asserted a claim under Section 14(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 14a-9 thereunder.

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Government/Regulatory Enforcement

SEC Announces $25 Million Enforcement Action Over Company’s Use Of Stock Buyback Plans That SEC Alleged Failed To Comply With Rule 10b5-1

On November 14, 2023, the Securities and Exchange Commission announced a settled enforcement action against Charter Communications, Inc. imposing a $25 million civil penalty over allegations that the Company had used stock buyback plans that did not comport with Rule 10b5-1 of the Securities Exchange Act of 1934. The SEC claimed that the Company’s stock buyback plans did not comport with Rule 10b5-1 because the plans contained provisions that allowed the Company to change the total dollar amounts available to buy back stock and the timing of buybacks after the plans took effect; and while Rule 10b5-1 is a safe harbor rather than a standard that must be met, the SEC alleged that the use of buyback plans that did not meet the Rule 10b5-1 standard evidenced insufficient accounting controls in violation of Section 13(b)(2)(B) of the Exchange Act. While the SEC has been focused on Rule 10b5-1 for a number of years, bringing such an enforcement action over non-conforming 10b5-1 plans—particularly where the reason for non-conformance is nuanced—is an aggressive new approach that should cause companies to consider double-checking their own 10b5-1 plans against the current Rule.

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M&A and Corporate Governance

Addressing The Enforceability Of Con Ed Provisions In Merger Agreements, Delaware Court Of Chancery Rejects Petition For Post-Closing Mootness Fee, Finding Stockholders Lacked Third-Party Beneficiary Standing To Seek Lost-Premium Damages

On October 31, 2023, Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery issued final judgment denying a petition for a mootness fee award to a stockholder—who had previously asserted claims for breach of a merger agreement—after the merger closed. Crispo v. Musk, No. 2022-0666-KSJM (Del. Ch. Oct. 31, 2023). The Court explained that, to obtain a mootness fee, a “plaintiff-stockholder must demonstrate that his mooted claim was meritorious when filed.” The claim at issue was for breach of a so-called “Con Ed provision” in the merger agreement purporting to provide for lost-premium damages. The Court found that plaintiff did not have third-party beneficiary status, at least at the time he filed suit, and therefore his claim was not meritorious.

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Antitrust Litigation

Eleventh Circuit Holds That Evidence Requiring The Court To Make Inferences Cannot Be “Direct” Evidence Of An Antitrust Conspiracy

On October 30, 2023, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s summary judgment in favor of defendants Ring Power Corporation, Ziegler, Inc., and Thompson Tractor Company, Inc., because plaintiff International Construction Products, LLC failed to present sufficient evidence—direct or circumstantial—to establish a conspiracy to boycott under Section 1 of the Sherman Act. International Construction Products, LLC v. Ring Power Corporation, No. 22-10231, 2023 WL 7127515 (11th Cir. Oct. 30, 2023).

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Intellectual Property Litigation

Federal Circuit Affirms PTAB’s Decision Finding Semiconductor Patent Unpatentable After Addressing Threshold Question Relating To Original Assignee’s Interest In Patent

On November 17, 2023, the U.S. Court of Appeals for the Federal Circuit issued an opinion affirming the decision of the Patent Trial and Appeal Board finding unpatentable the challenged claims of a patent directed to methods for making semiconductor devices. Bell Semiconductor LLC v. Advanced Semiconductor Eng’g, Inc., __ F.4th __ (Fed. Cir. Nov. 17, 2023).).

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