Business litigation partner Jeff Justman authored an article for Law360 titled, “Top 5 ERISA Stock-Drop Case Developments For 2020.” Justman notes that in 2020, there were several important developments in the area of stock-drop litigation brought under the Employee Retirement Income Security Act (ERISA). His article summarizes five key developments from 2020 and how they might affect this type of litigation in 2021.
In the article, Justman discusses the Supreme Court’s decision to not rule on whether the more-harm-than-good standard may be satisfied by general allegations. Justman then highlights rulings in federal courts that have taken contrasting stances to the Second Circuit by rejecting generalized allegations that the inevitability of harm increases with a late disclosure satisfies the more-harm-than-good standard. The article also details allegations that plaintiffs are adopting to show company stock prices would “inevitably” be harmed by late disclosure and arguments on which defendants are focusing in response to frequent plaintiff allegations. The last development Justman notes is the continued interest from plaintiffs to bring these claims in courts within the Second Circuit and interest from defendants to appeal these claims to the Supreme Court.