Amicus Effort Backs NVIDIA in U.S. Supreme Court Test for Securities Litigation

• Supporting NVIDIA in a major U.S. Supreme Court test of pleading standards for private securities fraud lawsuits, an Orrick team has filed an amicus brief on behalf of the Washington Legal Foundation, the U.S. Chamber of Commerce, The National Association of Manufacturers and The National Retail Federation and the Securities Industry and Financial Markets Association.
• The case involves NVIDIA’s challenge to a U.S. Court of Appeals for the Ninth Circuit decision that could vastly expand the ability of plaintiffs to plead securities fraud claims that survive motions to dismiss despite lacking the particularized factual allegations required under the Private Securities Litigation and Reform Act (PSLRA). The amicus brief warns that, if upheld by the Supreme Court, the Ninth Circuit’s reasoning would allow securities fraud plaintiffs to circumvent the PSLRA and undermine its intent to curb abusive securities litigation.
• In addition, the brief argues that the Ninth Circuit decision enables plaintiffs to subject companies to costly discovery based on pleadings consisting of “nothing more than purported expert opinions and speculation about the contents of internal company documents,” rather than concrete factual allegations.

“The Ninth Circuit’s approach imposes immense costs on public companies,” the brief in support of Nvidia argues. “Allowing groundless securities lawsuits to clear lax pleading standards, as affirming would do, also hampers the economic competitiveness of domestic industry. Costly securities actions are particularly prevalent (and successful) in the United States, creating excessive litigation risk that undermines global competitiveness.”

The Orrick team includes partners Danny Rubens, James Kramer and associate Jodie Liu.