The Court’s decision is one of a growing number of rulings that have dismissed Securities Act claims outright following the wave of such lawsuits filed in state courts across the country.
On May 14, Willkie secured a major win when the District Court of the State of Colorado dismissed a securities class action lawsuit filed against client CenturyLink Inc., and its officers and directors, relating to CenturyLink’s $34 billion merger with Level 3 Communications, Inc.
Following the announcement of the merger in late 2016, a number of class actions were filed against both CenturyLink and Level 3 challenging the companies’ proxy statement disclosures under federal and state law. Relying on the Supreme Court’s 2018 Cyan decision allowing Securities Act of 1933 claims to be brought in state court, CenturyLink shareholder Dean Houser argued that defendants were liable under Sections 11, 12(a)(2), and 15 of the Securities Act for making material misstatements and omissions in connection with the merger.
The Court dismissed the Complaint with prejudice, finding that “any amendment would be an exercise in futility,” and explicitly adopted the reasoning in Willkie’s motion to dismiss with respect to many of Houser’s allegations. The Court’s decision is one of a growing number of rulings that have dismissed Securities Act claims outright following the wave of such lawsuits filed in state courts across the country after Cyan.
The Willkie team was led by partners Tariq Mundiya and Sameer Advani (who argued the motion to dismiss).