Qualcomm Executives Win Summary Judgment in Shareholder Suit over Alleged Proxy Misrepresentations
March 26, 2014
On March 26, 2014, the U.S. District Court for the District of Delaware granted summary judgment in favor of Cravath’s clients, members of Qualcomm’s board of directors and certain of its executive officers, in a shareholder suit alleging direct and derivative claims over alleged misstatements in the company’s January 20, 2011 Proxy Statement (the “Proxy”).
Specifically, plaintiff asserted that the portion of the Proxy seeking shareholder approval of an amended Long‑Term Incentive Plan (the “Plan”) included statements that were “coercive” to shareholders, rendering (future) payments pursuant to the Plan nondeductible, which in turn made the company’s statements that such payments would be deductible false and misleading. In his original complaint, filed on March 11, 2011, plaintiff alleged a direct claim under § 14(a) of the Securities Exchange Act of 1934 and two derivative Delaware law fiduciary duty claims against the defendants. The § 14(a) claims were dismissed on July 2, 2013, on loss causation grounds.
Plaintiff filed an amended complaint on August 10, 2012, reasserting the original claims and adding 10 new direct and derivative claims. On July 2, 2013, Judge Richard G. Andrews granted in part defendants’ motion to dismiss the amended complaint. The remaining eight claims included the coercion allegations, as well as allegations that defendants provided misleading information to the IRS and failed to submit the Plan properly for shareholder vote, in breach of their fiduciary duties. Cravath moved for summary judgment on behalf of defendants on August 23, 2013, and argued the motion on October 8, 2013.
In his summary judgment ruling, Judge Andrews found that shareholders were not “coerced” into approving the Plan, there was no evidence that the IRS had been misled and the Plan was properly slated for shareholder vote. He also found that plaintiff failed to show that pre-suit demand on the board had been excused, a prerequisite for bringing derivative claims.
The Cravath team included partners Evan R. Chesler and Rachel G. Skaistis and associates Leslie W. Regenbaum, Andrew J. Lichtman and Ryan B. Finkel.
Related Practices & Industries
People
- Photo
-
-
J.D., 1997, Cornell Law Schoolcum laude
-
B.A., 1992, Yale College
- New York
Education
Admitted In
- Photo
-
-
J.D., 1975, New York University School of LawOrder of the Coif, John Norton Pomeroy Scholar, cum laude
-
M.A., 1973, Hunter Collegesumma cum laude
-
A.B., 1970, New York University
Education
Related News & Insights
Deals & Cases
August 22, 2024
QUALCOMM Incorporated’s $4 Billion Revolving Credit Facility
Cravath represented QUALCOMM Incorporated in connection with its $4 billion revolving credit. QUALCOMM Incorporated is a global leader in the development and commercialization of foundational technologies for the wireless industry. The transaction closed on August 8, 2024.
Deals & Cases
September 29, 2023
Qualcomm Wins Summary Judgment in Putative Antitrust Class Action
On September 26, 2023, the U.S. District Court for the Northern District of California granted summary judgment in favor of Cravath client Qualcomm Incorporated in a putative class action alleging violations of antitrust laws. Originally brought in 2017 on behalf of an alleged nationwide class of mobile device purchaser plaintiffs, the multi-district litigation consolidated numerous complaints against Qualcomm and followed a related Federal Trade Commission action against the company (FTC v. Qualcomm), which also resulted in a complete judgment for Qualcomm on appeal in 2020.
Deals & Cases
June 16, 2017
Qualcomm Directors and Officers Win Dismissal of Shareholder Derivative Suit Related to Purported FCPA Violations
On June 16, 2017, the Delaware Court of Chancery dismissed a stockholder derivative lawsuit brought against current and former directors and officers of Qualcomm Incorporated alleging, among other claims, that defendants breached their fiduciary duties by allegedly failing to prevent purported FCPA violations by the company. In granting the dismissal, Vice Chancellor Tamika R. Montgomery‑Reeves held that the complaint did not plead sufficient facts to infer that the individual defendants had acted in bad faith or that the directors faced a substantial likelihood of personal liability such that plaintiffs’ failure to make a demand on the board to bring a suit was excused.
Deals & Cases
September 08, 2011
Qualcomm Granted Consolidation Order in PJC Lawsuit
On September 6, 2011, the U.S. Judicial Panel on Multidistrict Litigation granted Cravath client Qualcomm Inc.’s request to centralize 11 lawsuits over PJC Logistics LLC’s vehicle tracking patent in Minnesota Federal Court. PJC alleged that certain mobile fleet management products manufactured by Qualcomm, and installed on hundreds of thousands of trucks and other vehicles, infringe U.S. Patent No. 5,223,844. In March 2011, PJC brought actions in nine district courts against hundreds of customers of fleet management products. In April 2011, Qualcomm filed a declaratory judgment action in the District of Minnesota alleging that the patent is invalid and not infringed by Qualcomm’s products. PJC subsequently filed additional infringement actions against Qualcomm and other suppliers of allegedly infringing fleet management systems in Texas. Qualcomm moved the Judicial Panel on Multidistrict Litigation to transfer all the actions to the District of Minnesota for coordinated pre-trial proceedings. After oral argument in July 2011, Qualcomm’s motion was granted.
