Cyan, Inc. v. Beaver County Employees Retirement Fund, Docket No. 15-1439

Jurisdiction: Concurrent state court jurisdiction:

(Fn. 2) This Court has often applied a “presumption in favor of concurrent state court jurisdiction” when interpreting federal statutes. Mims v. Arrow Financial Services, LLC, 565 U. S. 368, 378 (2012) (quoting Tafflin v. Levitt, 493 U. S. 455, 458–459 (1990)).

(U.S.S.C., March 20, 2018, Cyan, Inc. v. Beaver County Employees Retirement Fund, Docket No. 15-1439, J. Kagan, unanimous)

Présomption en faveur de la compétence concurrente des cours des états.

Cyan, Inc. v. Beaver County Employees Retirement Fund, Docket No. 15-1439

Interpretation (statute): Rule of the last antecedent:

(Fn. 6) The classic example comes from Barnhart v. Thomas, 540 U. S. 20 (2003). The statute at issue provided that a person is disabled if his impairment is so severe that “he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy.” Id., at 23 (quoting 42 U. S. C. §423(d)(1)(A)). Invoking the rule of the last antecedent, we concluded that the italicized phrase “which exists in the national economy” modifies only “substantial gainful work,” and not the more distant “previous work.” See 540 U. S., at 26.

(U.S.S.C., March 20, 2018, Cyan, Inc. v. Beaver County Employees Retirement Fund, Docket No. 15-1439, J. Kagan, unanimous)

Un exemple d'application de la règle d'interprétation de la loi connue sous le nom de "Rule of the last antecedent".

Cyan, Inc. v. Beaver County Employees Retirement Fund, Docket No. 15-1439

Securities: Jurisdiction: Class actions: Removal (state to federal):

This case presents two questions about the Securities Litigation Uniform Standards Act of 1998 (SLUSA), 112 Stat. 3227. First, did SLUSA strip state courts of jurisdic­tion over class actions alleging violations of only the Secu­rities Act of 1933 (1933 Act), 48 Stat. 74, as amended, 15 U. S. C. §77a et seq.? And second, even if not, did SLUSA empower defendants to remove such actions from state to federal court? We answer both questions no.

The petitioners in this case are Cyan, a telecommunica­tions company, and its officers and directors (together, Cyan). The respondents are three pension funds and an individual (together, Investors) who purchased shares of Cyan stock in an initial public offering.

(…) Complaint alleges that Cyan’s offering documents con­tained material misstatements, in violation of the 1933 Act. It does not assert any claims based on state law.

We granted Cyan’s petition for certiorari, 581 U. S. ___ (2017), to resolve a split among state and federal courts about whether SLUSA deprived state courts of jurisdiction over “covered class actions” asserting only 1933 Act claims.

(…) By its terms, §77v(a)’s “except clause” does nothing to deprive state courts of their jurisdiction to decide class actions brought under the 1933 Act. And Cyan’s various appeals to SLUSA’s purposes and legislative history fail to overcome the clear statutory language. The statute says what it says—or perhaps better put here, does not say what it does not say. State-court jurisdiction over 1933 Act claims thus continues undisturbed.

(…) This Court has emphasized that SLUSA’s operative provisions (including its state-law class-action bar, see §77p(b)) apply to only “transactions in covered securities”: The statute “ex­presses no concern” with “transactions in uncovered securities”—precisely because they are not traded on national markets. Chadbourne & Parke LLP v. Troice, 571 U. S. 377, ___ (2014) (slip. op., at 9) (…) Those securities, the Court explained, are “primarily of state concern,” and SLUSA “maintains state legal authority” to address them. Chadbourne, 571 U. S., at ___ (slip op., at 13).

(…) The 1934 Act regulates all trading of securities whereas the 1933 Act addresses only securities offerings. See Blue Chip Stamps, 421 U. S., at 752 (characterizing the 1933 Act as “a far narrower statute”).

(U.S.S.C., March 20, 2018, Cyan, Inc. v. Beaver County Employees Retirement Fund, Docket No. 15-1439, J. Kagan, unanimous)

SLUSA ne retire nullement la compétence des cours des états de connaître des actions de classe n'invoquant que la violation de la loi de 1933 (Securities Act of 1933).

En outre, SLUSA ne confère pas à la défenderesse le droit d'obtenir le transfert de la procédure en faveur d'une cour fédérale.

En l'espèce, la demande alléguait que l'offre publique initiale de papiers-valeurs contenait des indications matérielles de nature à induire l'investisseur en erreur, en violation de la loi de 1933. La demande ne formulait pas de prétentions basées sur le droit étatique.

(Le cadre de la loi de 1933 (ne réglemente que les offres publiques) est plus restreint que celui de la loi de 1934 (règlemente aussi les transactions postérieures à l'offre publique initiale)).

(SLUSA ne s'applique pas aux papiers-valeurs qui ne sont pas échangés sur le marché national, c'est le droit des états qui s'applique ici).

Pre-Merger Negotiations and Due Diligence

Republication:

Avoiding antitrust pitfalls during pre-merger negotiations and due diligence

By: Holly Vedova, Keitha Clopper, and Clarke Edwards, Bureau of Competition, FTC

March 20, 2018

https://www.ftc.gov/news-events/blogs/competition-matters/2018/03/avoiding-antitrust-pitfalls-during-pre-merger?utm_source=govdelivery

Information sharing: Hart-Scott-Rodino Act: Competition: Merger: Pre-merger: Antitrust: FTC:

Most antitrust practitioners are attuned to advising clients about the antitrust risk that a proposed acquisition may violate Section 7 of the Clayton Act. But counsel and clients must also be conscious of the risks of sharing information with a competitor before and during merger negotiations—a concern that remains until the merger closes.

Companies considering acquisitions, mergers, or joint ventures typically have a legitimate need to access detailed information about the other party’s business in order to negotiate the deal and implement the merger. But some information of interest may be competitively sensitive, such as current and future price information, strategic plans, and costs. This is especially true if the companies compete with one another. For prospective transactions involving a competitor or potential competitor, special care must be taken to minimize antitrust risks throughout premerger negotiation and due diligence process, as well as during the integration planning process.

Although less frequent than merger enforcement actions, the antitrust agencies have taken action against companies for unreasonable information sharing, whether as standalone conduct or during the merger process. For instance, the FTC charged a hair transplant services company with violating the FTC Act after it was discovered during the FTC’s review of a proposed merger that the merging firms’ CEOs repeatedly exchanged company-specific information about future product offerings, price floors, discounting practices, expansion plans, and operations and performance. Even though the FTC did not challenge the merger, it concluded that the exchange facilitated coordination and endangered competition, including by reducing each firm’s uncertainty about its rival’s specific product offerings, prices, and plans. The FTC also determined that the exchange served no legitimate business purpose. In another case, the FTC challenged both the merger and the exchange of competitively sensitive information between two welded-seam aluminum tube manufacturers. The FTC found the sharing of non-aggregated, customer-specific information, including current and future pricing plans, particularly harmful to competition because the two companies competed against each other in two highly concentrated markets. According to the Commission, “this transfer had the potential to harm competition in the interim pre-consummation period and in the event the acquisitions were delayed, modified, or abandoned, may have led to even greater and more long-lasting harm.”

The reason for concern is simple: competitive harm from illegal information sharing can inflict harm to competition similar to the harm caused by an anticompetitive merger. Exchanging information about competitive plans, strategies, and crucial data such as prices and costs can facilitate coordination between firms (and, if accompanied by accommodating actions, could constitute an unlawful agreement). Right up until consummation, the merger parties are still independent businesses and they must continue to operate independently­­ including safeguarding their competitively sensitive information—to ensure competitive vigor in the short term and also in the event that the merger does not happen. The FTC therefore looks carefully at pre-merger information sharing to make sure that there has been no inappropriate dissemination of or misuse of competitively sensitive information for anticompetitive purposes.

Note that pre-merger information sharing may contribute to unlawful “gun jumping” in violation of the HSR Act and Rules if it results in the buyer effectively gaining beneficial ownership of the seller prior to the close of the transaction. See United States v. Computer Assocs. Int’l, Inc. (2002) (merger agreement required buyer pre-approval for seller to offer customers discounts greater than 20% off list price). Unlawful gun jumping may include the exchange of competitively sensitive information, but it typically also involves actual coordination of business activities during the HSR pre-merger review period. Such conduct could also constitute evidence of a standalone illegal agreement that violates Section 1 of the Sherman Act. See United States v. Gemstar-TV Guide Int’l., Inc. (2003).

Managing the Risk: Set up a Process and Police it

Because sharing too much information during the pre-merger period could violate the antitrust laws, it’s important to have a plan in place to monitor and control the flow of information to outside parties. Staff’s recent experience indicates that companies could avoid both the appearance of and the actual misuse of competitively sensitive information by more consistently adhering to procedural safeguards designed to prevent misuse of competitively sensitive information.

Antitrust counsel can undertake several steps to help prevent problematic information sharing. First, companies should be reminded that designing, maintaining, and auditing effective protocols to prevent anticompetitive information sharing are extremely important during pre-merger negotiations and due diligence. If competitively sensitive information must be exchanged for diligence and integration planning purposes, parties should employ third-party consultants, clean teams, and other safeguards that limit the dissemination and use of that information within the parties’ businesses. Clean teams should not include any personnel responsible for competitive planning, pricing, or strategy.

Second, antitrust counsel should ensure that merging parties follow whatever protocols they establish. Merging parties’ adherence to established protocols should be monitored with an eye towards identifying potentially problematic information sharing or sloppy information sharing practices. Finally, if antitrust counsel discovers any problematic document sharing or coordination of business activities between the merging parties during the HSR waiting period, counsel should instruct the parties to stop the activity or document exchange immediately (because that is what the FTC staff will insist upon). For any problematic documentary information exchange uncovered, antitrust counsel should determine whether and how the information was used as well as the extent of the information exchanged, and would be well advised to inform FTC staff about this before staff discovers the documents in the merger investigation. Note that if FTC staff uncover documents in their merger review indicating that a problematic exchange occurred, or that the parties may not have fully lived up to the protocols they established to protect confidential information, this may well result in FTC staff pursuing a separate investigation, potentially costing additional time and resources.

(…) Share the least amount of information needed for effective due diligence. Information shared should be narrowly tailored and reasonably related to a specific due diligence or premerger integration planning issue. Tailoring the amount of information shared to the stage of the process can also help. At earlier stages in the sale process, a larger number of firms may view the information while considering whether to bid for the target company. Less information is typically needed at those earlier stages. At later stages in the sale process, fewer firms may view the information, but more detailed information may be needed to assess the business or asset package and finalize a bid. This will require stronger safeguards, such as clean team agreements. Clean team agreements limit access to competitively sensitive information in data rooms to select individuals (clean team members) who require access to evaluate the assets. Clean team members should be scrutinized to confirm they do not occupy business roles that could enable them to misuse the information for anticompetitive purposes.

(…) Ensure all employees with access to confidential information understand the terms of all confidentiality and non-disclosure agreements, including clean team agreements.

Establish clean teams and employ third-party consultants for competitively sensitive information that must be exchanged.

(…) And finally, when the bidding process is complete, individuals who received confidential information must comply with all document destruction requirements in the confidentiality/non-disclosure/clean team agreements. Requiring bidders to destroy any independent internal analysis based on the confidential data and documents reduces the risk of future misuse of competitively sensitive information.

European Union Privacy Law

Reminder:

The European Union Privacy Law

In May 2018, U.S. companies must comply with the EU’s General Data Protection Regulation (GDPR). It applies to all companies who collect, process, and/or store the personal data of European citizens - even if the company is not located in the EU. Read:

The text itself:  http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016R0679&from=FR


https://www.export.gov/article?id=European-Union-Establishing-an-Office


https://www.edoeb.admin.ch/edoeb/fr/home/documentation/bases-legales/Datenschutz%20-%20International/DSGVO.html (in French, official Federal Data Protection and Information Commissioner of Switzerland)


In French: brève formation gratuite online donnée par la FER Genève (peut se réaliser en env. 30 min.) :  https://medias.fer-ge.ch/FER/rgpd/#/?_k=flggk2

 
CNIL, Guide du sous-traitant - Edition septembre 2017 :

Exemple de clauses contractuelles de sous-traitance 

L’exemple de clauses de sous-traitance ci-dessous est proposé dans l’attente de l’adoption de clauses contractuelles types au sens de l’article 28.8 du règlement européen. Ces exemples de clauses peuvent être insérés dans vos contrats. Elles doivent adaptées et précisées selon la prestation de sous-traitance concernée. A noter qu’elles ne constituent pas, à elles seules, un contrat de sous-traitance :

https://www.cnil.fr/sites/default/files/atoms/files/rgpd-guide_sous-traitant-cnil.pdf

Swiss – U.S. Privacy Shield FAQs:

https://www.privacyshield.gov/Swiss-US-Privacy-Shield-FAQs

U.S. Bank N.A. v. Village at Lakeridge, LLC, Docket No. 15-1509

Bankruptcy: Chapter 11: Reorganization: Cramdown plan: Clear error:

Chapter 11 of the Bankruptcy Code enables a debtor company to reorganize its business under a court-approved plan governing the distribution of assets to creditors. See 11 U. S. C. §1101 et seq. The plan divides claims against the debtor into discrete “classes” and specifies the “treatment” each class will receive. §1123; See §1122. Usually, a bankruptcy court may approve such a plan only if every affected class of creditors agrees to its terms. See §1129(a)(8). But in certain circumstances, the court may confirm what is known as a “cramdown” plan— that is, a plan impairing the interests of some non-consenting class. See §1129(b). Among the prerequisites for judicial approval of a cramdown plan is that another impaired class of creditors has consented to it. See §1129(a)(10). But crucially for this case, the consent of a creditor who is also an “insider” of the debtor does not count for that purpose. See ibid. (requiring “at least one” impaired class to have “accepted the plan, determined without including any acceptance of the plan by any insider”).

The Code enumerates certain insiders, but courts have added to that number. According to the Code’s definitional section, an insider of a corporate debtor “includes” any director, officer, or “person in control” of the entity. §§101(31)(B)(i)–(iii). Because of the word “includes” in that section, courts have long viewed its list of insiders as non-exhaustive. See §102(3) (stating as one of the Code’s “rules of construction” that “‘includes’ and ‘including’ are not limiting”); A. Resnick & H. Sommer, Collier on Bankruptcy ¶101.31, p. 101–142 (16th ed. 2016) (discussing cases). Accordingly, courts have devised tests for identifying other, so-called “non-statutory” insiders. The decisions are not entirely uniform, but many focus, in whole or in part, on whether a person’s “transaction of business with the debtor is not at arm’s length.” Ibid. (quoting In re U. S. Medical, Inc., 531 F. 3d 1272, 1280 (CA10 2008)).

(…) The Court of Appeals for the Ninth Circuit affirmed by a divided vote. According to the court, a creditor qualifies as a non-statutory insider if two conditions are met: “(1) the closeness of its relationship with the debtor is comparable to that of the enumerated insider classifications in the Code, and (2) the relevant transaction is negotiated at less than arm’s length.” In re Village at Lakeridge, LLC,814 F. 3d 993, 1001 (2016).

((…) This Court granted certiorari to decide a single question: Whether the Ninth Circuit was right to review for clear error (rather than de novo) the Bankruptcy Court’s determination that Rabkin does not qualify as a non-statutory insider because he purchased MBP’s claim in an arm’s length transaction).

(J. Sotomayor, with whom J. Kennedy, Thomas, and Gorsuch join, concurring: The Court’s discussion of the standard of review thus begs the question of what the appropriate test for deter­mining non-statutory insider status is. I do not seek to answer that question, as the Court expressly declined to grant certiorari on it. I have some concerns with the Ninth Circuit’s test, however, that would benefit from additional consideration by the lower courts).

Secondary authority: A. Resnick & H. Sommer, Collier on Bankruptcy ¶101.31, p. 101–142 (16th ed. 2016).

(U.S.S.C., March 5, 2018, U.S. Bank N.A. v. Village at Lakeridge, LLC, Docket No. 15-1509, J. Kagan, unanimous)

Procédure de faillite selon le Chapitre 11, cas dans lesquels le plan de répartition peut être imposé même en l'absence du support d'au moins un créancier sans lien avec l'entreprise ou ses organes de décision.

Usuellement, une cour fédérale des faillites ne peut approuver un tel plan que s'il est ratifié par toutes les classes de créanciers (cf. 11 U.S.C. §1129(a)(8)).

Ce n'est que dans certains cas que la cour peut imposer un plan à une classe de créanciers qui ne consentent pas (cf. §1129(b)). La première condition est qu'au moins une classe de créanciers (lésés par le plan) ait approuvé ledit plan. Le consentement d'un créancier qui est en même temps un "insider" n'est à cet égard pas compté.

La loi donne une définition exemplaire de l'"insider", que la jurisprudence a complété. A la notion de personne "qui contrôle l'entité" s'est ajoutée la notion de personne dont la transaction avec l'entreprise débitrice ne s'est pas faite dans un rapport d'égalité ("at arm's length"). Cependant, la Cour ne s'est pas occupée en l'espèce de l'adéquation de dite définition. Elle ne s'est occupée que de la question de savoir si l'autorité précédente, le 9è Circuit fédéral, avait appliqué un standard de révision correct de la décision de première instance (la cour fédérale des faillites). La Cour juge que le 9è Circuit a appliqué à juste titre le critère de la "clear error" et non le critère "de novo". S'agissant de la question, non résolue ici, de la définition de l'"insider", les Juges Sotomayor, Kennedy, Thomas et Gorsuch font part, dans une opinion concurrente, de leurs doutes s'agissant de la définition jurisprudentielle donnée à ce jour au terme "insider".

Texas v. New Mexico, On Exceptions To Report Of Special Master, Docket No. 141, Orig.

Compact clause: Congressional ratification: Original jurisdiction: Foreign affairs: Intervention (proc.):

Our analysis begins with the Constitution. Its Compact Clause provides that “no State shall, without the Con­sent of Congress, . . . enter into any Agreement or Com­pact with another State.” Art. I, §10, cl. 3. Congress’s approval serves to “prevent any compact or agreement between any two States, which might affect injuriously the interests of the others.” Florida v. Georgia, 17 How. 478, 494 (1855). It also ensures that the Legislature can “check any infringement of the rights of the national govern­ment.”  J. Story, Commentaries on the Constitution of the United States §1397, p. 272 (1833) (in subsequent editions, §1403). So, for example, if a proposed interstate agreement might lead to friction with a foreign country or injure the interests of another region of our own, Congress may withhold its approval. But once Congress gives its consent, a compact between States—like any other federal statute—becomes the law of the land. Texas v. New Mexico, 462 U. S. 554, 564 (1983).

Our role in compact cases differs from our role in ordi­nary litigation. The Constitution endows this Court with original jurisdiction over disputes between the States. See Art. III, §2. And this Court’s role in these cases is to serve “as a substitute for the diplomatic settlement of contro­versies between sovereigns and a possible resort to force.” Kansas v. Nebraska, 574 U. S. ___, ___ (2015) (slip op., at 6) (quoting North Dakota v. Minnesota, 263 U. S. 365, 372–373 (1923)). As a result, the Court may, “in this singular sphere, . . . ‘regulate and mould the process it uses in such a manner as in its judgment will best pro­mote the purposes of justice.’” 574 U. S., at ___–___ (slip op., at 6–7) (quoting Kentucky v. Dennison, 24 How. 66, 98 (1861)).

Using that special authority, we have sometimes per­mitted the federal government to participate in compact suits to defend “distinctively federal interests” that a normal litigant might not be permitted to pursue in tradi­tional litigation. Maryland v. Louisiana, 451 U. S. 725, 745, n. 21 (1981). At the same time, our permission should not be confused for license. Viewed from some sufficiently abstract level of generality, almost any com­pact between the States will touch on some concern of the national government—foreign affairs, interstate com­merce, taxing and spending. No doubt that is the very reason why the Constitution requires congressional ratifi­cation of state compacts. But just because Congress en­joys a special role in approving interstate agreements, it does not necessarily follow that the United States has blanket authority to intervene in cases concerning the construction of those agreements.

(U.S.S.C., March 5, 2018, Texas v. New Mexico, On Exceptions To Report Of Special Master, Docket No. 141, Orig., J. Gorsuch, unanimous)

Les accords entre états sont soumis à la ratification du Congrès fédéral (Cst féd. Art. I, §10, cl. 3). Le but étant d'éviter l'entrée en vigueur d'accords qui porteraient atteinte aux intérêts d'états tiers, du Gouvernement fédéral, ou de nature à provoquer des frictions avec un état étranger. Une fois l'approbation du Congrès donnée, l'accord acquiert force de droit fédéral.

Les litiges relatifs à ces accords sont à porter devant la Cour Suprême fédérale, qui fonctionne ici comme instance unique avec plein pouvoir d'examen.

Dans ces affaires, la Cour peut autoriser le Gouvernement fédéral à participer à la procédure pour défendre des intérêts fédéraux distincts.