Recently, my colleague Melanie Conroy and I delivered a podcast for the American Bar Association about the tuition refund class actions filed against universities in response to COVID-19 campus closures. We discuss the impact of COVID-19 on colleges and universities, the legal theories underlying the plaintiffs’ claims and likely defenses, the issues raised by anticipated motions for class certification, and some predictions about the progress and potential outcomes of the cases. A link to the podcast can be found here.
This week, Justice Gorsuch donned his black robes and began hearing arguments alongside his new colleagues on the Supreme Court. With his elevation to the high court, Justice Gorsuch assumes many new responsibilities. Some, of the lighter kind, include opening the door during conferences with his colleagues and assuming oversight of the Court’s cafeteria menu. More serious responsibilities will include weighing in on important class action cases that will undoubtedly be heard by the Court in the future.
Despite his lengthy judicial record from having served a decade on the Tenth Circuit, there are relatively few clues regarding Justice Gorsuch’s approach to class actions. While on the court of appeals, he participated in only a few class action cases, which is not surprising given that the Tenth Circuit has not been a hotbed of class actions. His handful of class action opinions, however, evidences not only his gift with the pen but also a restrained, textual approach to Rule 23. These characteristics are
First Circuit Affirms Tough Standard for Alleging Securities Fraud; Revives One Claim Against Local Drug Maker
On November 28, 2016, the First Circuit upheld the dismissal of all but one of the class action securities fraud claims against Cambridge, MA drug company, ARIAD Pharmaceuticals, Inc., reaffirming the exacting pleading standards that enable defendants to put an early end to reflexive stock-drop lawsuits. In doing so, the First Circuit also adopted strict requirements for asserting claims that defendants misled investors in a common stock offering.
In In re ARIAD Pharmaceuticals, Inc. Securities Litigation, shareholder plaintiffs appealed the District of Massachusetts’ dismissal of the federal securities fraud claims against ARIAD based on optimistic statements the company’s executives made about the prospects of ARIAD’s experimental leukemia drug, ponatinib, which ultimately did not fare so well in FDA trials. The First Circuit largely affirmed the district court’s dismissal, holding that the complaint failed to raise a compelling inference that the company’s executives acted with scienter—or intent to defraud. The appellate court did, however, revive a claim related to “one particular alleged
OMNICARE: Supreme Court Clarifies Whether Statements of Opinion by Companies and their Executives are Actionable under the Federal Securities Laws
This week the Supreme Court resolved a split among federal appellate courts over whether a statement of opinion in a company’s registration statement can be actionable under Section 11 of the Securities Act of 1933 if the speaker actually holds the stated opinion. The high court ruled that such opinions are not actionable as an “untrue statement of material fact” simply because they turn out to be wrong. But, taking another “midway position” on a divisive issue of securities class action litigation, the court left the door open…