Publication
April 25, 2019
On April 23, 2019, the Supreme Court of the United States dismissed as improvidently granted its earlier grant of certiorari in Emulex Corp. v. Varjabedian, No. 18-459.  The Justices had been poised to resolve a circuit split about whether plaintiffs must plead scienter to state a claim arising from tender-offer disclosures under Securities Exchange Act § 14(e) (15 U.S.C. § 77n(e)).  Although the Court’s one-sentence Order did not explain why the case had been dismissed, the Justices’ questions at oral argument suggest they viewed the case as a flawed vehicle because it did not present the more basic question of whether there even is a private right of action under 14(e).
 
The Supreme Court’s Order has at least two practical implications.  First, plaintiffs seeking to litigate § 14(e) claims are likely to flock to the Ninth Circuit to avoid having to plead scienter.  Second, defendants would be wise to argue both that plaintiffs do not have a private right of action under § 14(e), and that plaintiffs must plead scienter if they can bring a claim at all.

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