The U.S. Supreme Court dismissed a case Tuesday that might have made it easier for shareholders to take legal action following mergers or acquisitions.
Just one week after arguments were heard in Emulex Corp. vs. Varjabedian, the Supreme Court said the case was improvidently granted and should not have been accepted.
The case stems from a 2015 merger between Emulex Corp. and Avago Technologies Wireless Manufacturing Inc. A group of shareholders approved the merger but later filed a lawsuit claiming that the investment bank's price analysis was not properly disclosed.
The U.S. District Court in Los Angeles dismissed the claim in 2016, but the 9th U.S. Circuit Court of Appeals in San Francisco reversed and ruled last year that the plaintiffs were not required to show intent — only negligence — to file a private right of action. Five other circuit courts have ruled the opposite.