Precedent-setting Litigation Work

In one of the most complex and long-running corporate and securities litigation matters ever, In re Initial Public Offering Securities Litigation, S&C achieved a landmark ruling in the U.S. Court of Appeals for the Second Circuit, reversing the district court’s grant of class certification in the IPO “dot-com” securities litigation on behalf of client Goldman Sachs and as liaison counsel to 55 investment banks that were named as defendants. The decision provided important clarifications to the requirements for obtaining class action status, and is expected to be of significance in defending against putative class actions in securities, employment and other areas of complex litigation.

Our Firm has continued to defend successfully Barclays in the Enron securities class action, widely considered to be the largest and most complex securities class action in history. Despite settlements by several other financial institutions involved in the action totaling in excess of US$ 6.6 billion, our Firm pursued, on behalf of Barclays, the dismissal of plaintiffs’ claims. Our defense strategy proved highly successful: the U.S. Court of Appeals for the Fifth Circuit reversed the class certification order and the U.S. Supreme Court denied plaintiffs’ petition for review of the Fifth Circuit’s decision.

The Supreme Court’s ruling in the Enron securities class action followed the Court’s widely awaited decision in Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., which made clear that plaintiffs cannot seek to impose liability on secondary actors—such as investment banks, auditors and vendors—in a so-called “scheme to defraud.” Our Firm submitted an amicus brief in Stoneridge on behalf of various clients, urging the Supreme Court to reject “scheme” liability.

Our Firm helped to achieve an important victory on behalf of our clients Wachovia Bank and The Clearing House Association in Watters v. Wachovia Bank, N.A. and Wachovia Mortgage Corp., where the U.S. Supreme Court held that state laws apply to operating subsidiaries of national banks only to the same extent as they apply to parent national banks. This decision imposes important limitations on state regulation of national banks and their operating subsidiaries.

S&C also set significant precedents under Delaware corporate law. As defense counsel to JPMorgan Chase and AmSouth Bancorporation, the Firm successfully defended JPMorgan and current and former members of its Board of Directors following the company’s merger with Bank One and obtained a decision in the Delaware Supreme Court that set an important precedent regarding the standards for obtaining proxy damages. Also, in a victory for the directors of AmSouth, S&C obtained a decision from the Delaware court that sets high hurdles for plaintiffs attempting to assign blame to corporate directors.