Litigating Securities Class Actions After Cyan: Guidance for Limiting Client Exposure and Controlling Venue

Description

Securities class action filings this year are on track to reach a new high. The Cyan decision signals that Section 11 claims filed in state court can remain there and changes the calculus for litigating these securities class actions, portending an aggressive shift of such claims from federal to state forums.

With the dramatic increase in the number of securities class actions filed against companies in an array of industries, savvy practitioners must prepare to capitalize on proven strategies for defending these claims after Cyan.

Several options remain in defense counsel's arsenal to mitigate the risks and costs of litigating in state court. First, many companies—including Blue Apron, Stitch Fix, Roku, and Snap—have adopted bylaws designating federal courts as the exclusive forum for 1933 Act claims. Second, defendants can deftly deploy various procedural mechanisms to stay one action in favor of another, stay discovery in state court pending the resolution of a motion to dismiss in federal court, or coordinate the multiple suits. Third, defendants can insist that state courts apply the substantive protections of the Reform Act, as the Supreme Court has repeatedly held state courts must do.

Listen as our panel of expert litigators examines the causes of actions and defenses asserted in Section 11 claims, assesses the latest trends from recent securities cases, and offers practical guidance for limiting client exposure using preferred forum provisions, litigation strategies, and discovery proceedings.