In Briskin v. Shopify, Inc., No. 22-15815, 2023 WL 8225346 (9th Cir. Nov. 28, 2023), the United States Court of Appeals for the Ninth Circuit held that the Canada-based company Shopify, Inc. (“Shopify”), which provides a web-based payment processing platform to online merchants across the United States (and the world), is not subject to specific personal jurisdiction in California courts under California data privacy laws based solely upon Shopify’s collection, retention and use of customer data from California residents. In making this ruling, the Ninth Circuit became the first Circuit in the nation to address this type of personal jurisdiction question involving a global online payment platform.Continue Reading In a Case of First Impression, Ninth Circuit Addresses Personal Jurisdiction Issues Involving Non-Resident Corporation Providing a Web-Based Payment Processing Platform

In Roth v. Foris Ventures, LLC, Nos. 22-16632, 22-16633, 2023 U.S. App. LEXIS 30081 (9th Cir. Nov. 13, 2023), the United States Court of Appeals for the Ninth Circuit partially reversed the dismissal of a shareholder derivative suit seeking to recover disgorgement of short-swing profits under Section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78p(b). The three-judge panel held that the district court erred in holding that the company’s board was required to approve the stock sale transactions for the specific purpose of exempting it from Section 16(b) liability pursuant to Securities and Exchange Commission (“SEC”) Rule 16b-3(d)(1). The Court’s decision provides a board of directors with more latitude to approve securities transactions by Section 16 reporting persons without risk of liability under the short-swing profits rule.Continue Reading Ninth Circuit Provides Guidance on SEC Rule 16b-3 Short-Swing Profit Liability Exemption

California has passed two new items of legislation, Senate Bill 699 and Assembly Bill 1076, which will further regulate and restrict the enforcement of employment non-compete agreements in California, and expand the scope of remedies for those affected by them. These new laws will become effective on January 1, 2024, and now is the time for employers to assess and revise their employment-related agreements and restrictive covenants accordingly. As detailed below, they also require employers to notify employees and certain former employees by February 15, 2024 that certain non-compete provisions are void. The two new laws are detailed below.Continue Reading California Strengthens Non-Competition Law

In Securities & Exchange Commission v. Govil, No. 22-1658, 2023 WL 7137291 (2d Cir. Oct. 31, 2023), the United States Court of Appeals for the Second Circuit dealt a setback to the enforcement agenda of the Securities and Exchange Commission (“SEC”) by limiting its ability to seek disgorgement under 15 U.S.C. § 78u(d)(5) and (7) to situations in which the regulator can demonstrate investors have suffered pecuniary harm.Continue Reading Second Circuit Reins in SEC Disgorgement Powers

Hospital mergers have been an increasing trend in the healthcare markets over the past decade, with many proponents of these mergers believing that the overall consolidation of hospital services provides better outcomes for patients at large, and opponents arguing that these mergers only result in increased costs to patients. Over the last couple of years, there has been a slight decrease in the number of hospital mergers, in part due to the whirlwind of changes in society and the economy (i.e., the public health epidemic, increased interest rates and an unstable M&A market), but in large part as a result of drastic changes to the way we receive healthcare services (telehealth and telemedicine, outpatient treatment centers, ambulatory surgery centers, etc.). Although the number of hospital mergers has decreased, the deal size of these transactions has increased exponentially. So what can we expect to see in the future regarding hospital consolidations and what would increased hospital consolidation mean for patients?Continue Reading Hospital Mergers: The Value and Pitfalls

On September 27, 2023, the Securities and Exchange Commission (the “SEC”) announced charges against six officers, directors, and major shareholders of public companies (“insiders”) for failing to timely report and file disclosures related to (i) their holdings in public company stock and (ii) transactions they undertook involving public company stock. Five public companies were also charged in connection with timely reporting failures by their insiders. Without admitting or denying the charges, the six insiders and five public companies agreed to cease and desist from violating the charged provisions and agreed to pay civil penalties ranging from $66,000 to $200,000.Continue Reading SEC Announces Charges Against Insiders for Reporting Failures and Adopts Amendments to Schedule 13D and 13G Report Filing Timelines

On October 4, 2023, the Department of Justice (DOJ) announced the advent of a new safe harbor for companies that discover wrongdoing by the acquired business in the course of an M&A transaction. Buyers hoping to take advantage of this avenue for leniency would be well-advised to conduct thorough diligence and act quickly to report any wrongdoing they uncover, as the potential upsides for those who do so may be considerable in light of the DOJ’s new policy.Continue Reading DOJ Announces Mergers & Acquisitions Safe Harbor Policy

On June 27, 2023, the FTC and DOJ (together the “Agencies”) announced a notice of proposed rulemaking (“NPRM”) proposing extensive revisions to both the rules that implement the Hart-Scott-Rodino Antitrust Improvements Act (the “Act” or “HSR Act”) and the Premerger Notification and Report Form (the “Form”) that merging parties must submit under the Act. Our previous analysis of the NPRM is covered here.Continue Reading Mergers & Acquisitions Update: A Closer Look at the Impact of the FTC and DOJ’s Proposed HSR Act Filing Reform on Private Equity Firms

Mergers and acquisitions activity is significantly influenced by economic conditions. Factors such as gross domestic product growth, interest rates and market volatility create an undeniable influence on deal volume. When economic circumstances are favorable, it can seem easy to close transactions. Conversely, when the economy faces headwinds, buyers are more cautious and often kick more tires before initiating closing wires.Continue Reading Pillars of Due Diligence

If you had invested in a North American sports franchise between 1991- 2022, you would have earned at least a seven-fold return on your investment, bettering the return from the S&P 500 over that period of time by a two-to-one ratio. According to Sportico, in the past year alone, the average value of an NFL franchise has increased by 24 percent. The strong growth in the value of these franchises has proven to be particularly attractive to investors, especially in recent years. For example, the sale of the Denver Broncos in 2022 was for a 22% premium over a third party’s pre-sale valuation. Valuation premiums are not only limited to sales of controlling investments; in 2023, a minority share of the parent company of the Toronto Raptors, Toronto Maple Leafs and Toronto FC was sold for a similar premium over a recent third-party valuation for the franchises. Not surprisingly, franchise owners have been eager to cash in either in whole or in part.Continue Reading How High Can It Go? What Private Equity Needs to Know about How Professional Sports Leagues’ Rules Impact Sports Franchise Valuations

On September 21, 2023, the Federal Trade Commission (FTC) sued Welsh, Carson, Anderson & Stowe (WCAS) and U.S. Anesthesia Partners, Inc. (USAP), in the Southern District of Texas, alleging the two companies “[e]xecuted a multi-year anticompetitive scheme to consolidate anesthesiology practices in Texas, drive up the price of anesthesia services provided to Texas patients, and boost their own profits.”Continue Reading FTC Sues Private Equity Firm and Anesthesiology Practice for Antitrust Violations