Articles Posted in US Court of Appeals for the Tenth Circuit

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The issue this appeal presented for the Tenth Circuit’s review centered on the district court’s dismissal of Plaintiff-Appellant David Hampton’s securities-fraud class action against Defendants-Appellees root9B Technologies, Inc. (“root9B”), Joseph Grano, Jr., the Chief Executive Officer and Chairman, and Kenneth T. Smith, the former Chief Financial Officer. Hampton filed suit claiming root9B made false or misleading statements in connection with the purchase or sale of securities. Hampton identified two statements he alleged were false or misleading and material: (1) a letter from Grano to investors attesting that root9B was differentiated from competitors by its “proprietary hardware and software;” and (2) a press release and associated report published by root9B in which the company claimed to have detected a planned cyber attack against a number of international financial institutions. He further alleged that the individual defendants were jointly and severally liable under section 20(a) of the Securities Exchange Act of 1934. The district court dismissed Hampton’s claims, finding that he had failed to sufficiently plead that the identified statements were false or misleading. The Tenth Circuit concurred with the district court’s findings and affirmed its judgment. View "Hampton v. Root9B Technologies" on Justia Law

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Defendant Williams Companies, Inc. (Williams) was an energy company; its president and chief executive officer (CEO) was Defendant Alan Armstrong and its chief financial officer (CFO) was Defendant Donald Chappel. Armstrong also served on its board of directors. Defendant Williams Partners GP LLC (Williams Partners GP) was a limited-liability company owned by Williams. Armstrong was chairman of the board and CEO; and Chappel was CFO and a director. Defendant Williams Partners L.P. (WPZ) was a master limited partnership, whose general partner was Williams Partners GP. Williams owned 60% of WPZ’s limited-partnership units. Plaintiff’s case centered on merger discussions between Williams and Energy Transfer Equity L.P. (ETE), a competing energy firm. The members of the putative class purchased units of WPZ between May 13, 2015 (when Williams announced that it planned to merge with WPZ) and June 19, 2015 (when ETE announced that, despite having been rebuffed by Williams, it would seek to merge with Williams and that such a merger would preclude the merger with WPZ). The value of the units dropped significantly after this announcement. Ultimately, ETE merged with Williams and the proposed WPZ merger was not consummated. The Complaint alleged the class members paid an excessive price for WPZ units because Williams had not disclosed during the class period its merger discussions with ETE. Employees’ Retirement System of the State of Rhode Island (Plaintiff) appealed the dismissal of its amended complaint in a putative class-action suit, alleging violations of federal securities law because of the failure to disclose merger discussions that affected the value of its investment. The Tenth Circuit concluded the complaint failed to adequately allege facts establishing a duty to disclose the discussions, the materiality of the discussions, or the requisite scienter in failing to disclose the discussions. View "Employees' Retirement System v. Williams Companies" on Justia Law

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The Pioneer Centres Holding Company Employee Stock Ownership Plan and Trust and its trustees sued Alerus Financial, N.A. for breach of fiduciary duty in connection with the failure of a proposed employee stock purchase. The district court granted summary judgment to Alerus after determining the evidence of causation did not rise above speculation. The Plan appealed, claiming the district court erred in placing the burden to prove causation on the Plan rather than shifting the burden to Alerus to disprove causation once the Plan made out its prima facie case. In the alternative, the Plan argued that even if the district court correctly assigned the burden of proof, the Plan established, or at the very least raised a genuine issue of material fact regarding, causation. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Pioneer Centres Holding Co v. Alerus Financial, N.A." on Justia Law