A class action complaint filed last week against online brokerage firm Robinhood accuses the company of manipulating the open market after it removed GameStop’s stock from its trading platform in the midst of volatile trading last month.  GameStop (ticker symbol GME), a struggling retailer of video games and accessories, saw its stock rise almost 1,700% in one day as small investors drove up the price of the stock as part of an effort encouraged by…

In an opinion yesterday, Judge Wood dismissed a securities fraud case against Papa John’s that arose from two articles in Forbes in 2018 (see here and here), describing (among other things) an allegedly “toxic” culture of workplace sexual harassment.  The stock price dropped after the articles were published, and the theory of the complaint was that investors had been deceived by various public statements portraying a different culture—such as the company Code of Ethics…

In an opinion Friday, Judge Stanton dismissed, on jurisdictional grounds, a case accusing the promoters of an initial coin offering of fraud, because the plaintiffs’ transactions did not occur domestically, as required by Morrison v. National Australia Bank, Ltd., 561 U.S. 247 (2010). The plaintiffs offered declarations from two putative class members who did not live in the U.S. One was from from the United Arab Emirates and the other from the United Kingdom.…

In an opinion today in the long-running defamation case brought by Sarah Palin against the New York Times (see our coverage here), Judge Rakoff ruled that an expansion of New York’s anti-SLAPP law last month was retroactive, and hence was governing in the case. Sate anti-SLAPP laws generally give special protections to defendants sued for exercising free speech rights, often by allowing for early dispositive motions, fee-shifting, and heightened standards of proof. New York’s…

In a decision last week, Judge Cote ruled that the COVID-19 pandemic qualified as a “natural disaster” that fell within the scope of a contractual force majeure clause. The defendant auction house had agreed to auction a painting owned by the plaintiff and pay it a guaranteed minimum price, but invoked its right to terminate the agreement after the auction was postponed by the COVID-19 pandemic and related government restrictions. The force majeure clause applied in the…

In an opinion Friday, Judge Cronan dismissed with prejudice a suit brought by Sparks Steak House against its insurance company seeking to recover for business interruption losses arising from the COVID-19 pandemic. The policy covered, as is common in property insurance policies, “direct physical loss of or damage to property” at the premises, and Sparks argued that its inability to use the premises as a steakhouse fell within that language. Judge Cronan disagreed, using illustrations…