Heather M. Palmer

Illumina and Grail on Friday defeated a proposed class action alleging they lied to investors who bought artificially inflated Illumina stock whose prices plunged following several purported disclosures, after a California federal judge said the investors hadn't adequately pled which disclosures corrected any alleged misstatements that caused their losses. In a nine-page ruling, U.S. District Judge Linda Lopez of the Southern District of California granted a pair of dismissal motions filed in November by Illumina and its spinoff cancer test maker Grail Inc. against a consolidated second amended complaint alleging securities law violations related to the parties' ill-fated $8 billion merger. Judge Lopez, however, granted the plaintiffs leave to amend their suit, which they have until Oct. 27 to file. According to court papers, Illumina created Grail as a subsidiary 10 years ago, and it went on to develop "Galleri," a noninvasive, multi-cancer-early-detection test that sought to identify different types of cancer from a single blood draw. Investors, however, accused company insiders and executives of making misleading statements about the transaction, including that Illumina would expedite the adoption of the Galleri test that was nearing FDA approval and commercialization. That caused stock prices to soar, the investors alleged. The U.S. Federal Trade Commission and the European Commission stepped in, expressing concerns that the deal could lessen competition, subjecting it to a "standstill," court records show. The FTC ordered Illumina to unwind the merger in the spring of 2023. Eight months later, the Fifth Circuit vacated that order. Despite the Fifth Circuit's ruling, Illumina announced that it would either sell Grail directly or spin it off through a capital market transaction by summer of 2024. Investors further alleged that Galleri was "unproven and clinically useless," that the FDA rejected proposed clinical trials for it, and that Illumina had no plan to speed up adoption of the technology. Illumina then purportedly issued several corrective disclosures that later caused stock prices to dip, the plaintiffs alleged. Those disclosures include Illumina's announcement pushing forward with the merger in August 2021 despite the FTC stepping in, an article questioning the validity of Galleri, Illumina revealing information that raised questions regarding the timeline for Galleri's clinical validity and commercial adoption, the departure of its executive and a headcount reduction in its research and development. In addition, and the SEC opened an investigation into Illumina in August 2023. The investors further referenced a verified complaint that alleged Illumina's directors were conflicted since they were "poisoned by their personal stake" in the Grail merger. On Nov. 12, Grail and Illumina moved to axe the suit, arguing that it was nothing more than "hindsight-fueled criticisms" of Illumina's business decisions. Illumina maintained that nobody was "more disappointed" than it over the failed merger. Illumina argued that the investors failed to plead loss causation through a "laundry list of alleged corrective disclosures" and didn't show a link between the fraud and their losses by tracing the losses back to the very facts the defendants purportedly lied about. But investors opposed dismissal, arguing that the Ninth Circuit held in Mineworkers' Pension Scheme v. First Solar Inc. that there is an "infinite variety of causation theories" and that loss causation is pled "'even if the market was unaware at the time that fraud' resulted in the stock decline." On Friday, Judge Lopez sided with the defendants' arguments, pointing out that the investors do not specify which misrepresentations the disclosures apparently rectified, "leaving it to defendants and this court to guesstimate the connections." "This is inappropriate; 'precisely the kind of connect-the-dots-exercise that should not be required of courts and defense counsel,'" the order said, echoing Illumina's dismissal argument. "Indeed, such 'failure to plead with particularity and distinguish among the various misstatements and revelations that allegedly caused that decrease' in the market is grounds for dismissal." Judge Lopez pointed out that the investors must lean on a fraud-on-the-market theory to show loss causation, which means they must link their losses back to the things the defendants allegedly lied about, with adequate particularity. "Here, that means making some attempt to actually link each of the nine corrective disclosures to each defendant's prior misstatement on that topic instead of forcing the court — and more importantly Defendants — to speculate how the jigsaw puzzle connects in plaintiffs' mind," the order said. John Rizio-Hamilton of Bernstein Litowitz Berger & Grossmann LLP, co-lead counsel for the proposed class and lead plaintiffs, said the plaintiffs' team had no comment on the order. Representatives for the Lumina defendants declined to comment. The investors are represented by John Rizio-Hamilton, Jonathan D. Uslaner, Michael D. Blatchley, Alec Coquin, Michael Mathai and Emily A. Tu of Bernstein Litowitz Berger & Grossmann LLP. Grail Inc. and its co-defendants are represented by Colleen C. Smith and Alexander C.K. Wyman of Latham & Watkins LLP. Illumina Inc. and its co-defendants are represented by Koji F. Fukumura, Heather M. Speers and Brian M. French of Cooley LLP. The case is In re Illumina Inc. Securities Litigation, case number 3:23-cv-02082, in the U.S. District Court for the Southern District of California.

Sep 26

4 min

Sidley represented The Brink’s Company (NYSE: BCO) in its acquisition of NCR Atleos Corporation (NYSE: NATL) in a cash and stock transaction valued at approximately US$6.6 billion. The deal combines two leading financial technology infrastructure providers, bringing together Brink’s global cash management expertise and route-based infrastructure with NCR Atleos’ end-to-end ATM management and services expertise, ATM network, and fast-growing ATM-as-a-Service outsourcing solutions. Sidley served as both transaction and financing counsel to Brink’s in the transaction. The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the first quarter of 2027, subject to customary closing conditions. The Sidley team was led by David Grubman, Adam Cromie, George Hunter, and Dustin Page (M&A), and included Lisa Holzman, Evan Kowalski, Jordan Lemoine, and David Hoff (M&A); Angela Fontana, Tracey Nicastro, Caroline Roberts, and Alexander Waddell (Global Finance); Sonia Gupta Barros, Alexander Csordas, Samir Gandhi, and Kayla West (Capital Markets); Suresh Advani, Christian Brause, Eric Grosshandler, and Patrick Gray (Tax); Gregory Marrs, Elizabeth Burns, and Steven Szymanski (Employee Benefits and Executive Compensation); Corey Roush, Murray Reeve, and Anna Kubinska (Antitrust and Competition); Sven De Knop, Alessandra Moroni, James Daher, and Laura Verbeken (Global Arbitration, Trade and Advocacy); Stanley Boris and Matthew Katz (Banking, Payments and Fintech); Colleen Brown and Stephanie Lim (Privacy and Cybersecurity); Heather Palmer (Environmental, Health, and Safety); Natalie Piazza, Vishnu Tirumala, Melissa Gerdts, Amber Otto, Chetan Reddy, and Shannon McDonald (Commercial Litigation and Disputes); and Derek Zaba (Shareholder Activism & Corporate Defense).

Feb 26

1 min

Sidley is representing a consortium, headed by APG Asset Management N.V. (APG), on behalf of the largest Dutch pension fund, ABP, and Australian Retirement Trust (ART), in the acquisition of Riverstone Holdings’ equity stake in Pattern Energy Group LP. The consortium joins the Canadian Pension Plan Investment Board (CPP Investments), which acquired Pattern Energy alongside Riverstone in 2020. Pattern Energy is one of the world’s largest privately owned developers and operators of wind, solar, transmission, and energy storage projects. It will leverage this new investment to advance its market-leading development pipeline of over 25 gigawatts (GW) of renewable energy and transmission projects and support its operating facilities and in-construction portfolio of nearly 10,000 megawatts (MW) across North America. The transaction is expected to close in the first half of 2025, subject to regulatory approvals and other customary closing conditions. The Sidley team is being led by Private Equity/M&A partners Brien Wassner and Chris Barbuto, senior managing associate Rachel Fridhandler, and Energy partner Greg Lavigne. Additional team members include Sam Hulsey, Victoria Richmond, Sarah Wiley, Kyle Patel, Tamia Sutherland, and law clerk Landon Garfinkel (M&A and Private Equity); C.J. Polito, Keturah Brown, John David Thompson, Marcela Varela, Juan Camarena Paz, Meredith Kuykendall, Annaliese Oliveira, Charlie Peskin, Alexander Thompson, and law clerks Julien Blanchard and Zev Falik (Energy and Infrastructure); Christian Brause, John Schaff, and Andrew Smith (Tax); Lauren Gallagher, Gregory Matisoff, and Ryan McLeod (Employee Benefits and Executive Compensation); John Kuster, Danica Muir, and Zachry Tannis (Commercial Litigation and Disputes); Jen Fernandez, Kayla Scott, and Nick Wiggins (Global Arbitration, Trade and Advocacy); Keith Hayden Del Prete, Jonathan Koh, and Serena Patel (Real Estate); Alex Csordas (Capital Markets); Heather Palmer and Maureen Crough (Environmental); Rebecca Stuart and Allison Ivey Toth (Labor, Employment and Immigration); Steve McInerney and Sasha Hondagneu-Messner (Privacy and Cybersecurity); Alena Thomas (Global Finance); Scott Goldstein (Insurance); Rachelle Soderstrom (Technology and Life Sciences Transactions); and Craig Francis Dukin (White Collar Defense and Investigations).~~Sidley is representing a consortium, headed by APG Asset Management N.V. (APG), on behalf of the largest Dutch pension fund, ABP, and Australian Retirement Trust (ART), in the acquisition of Riverstone Holdings’ equity stake in Pattern Energy Group LP. The consortium joins the Canadian Pension Plan Investment Board (CPP Investments), which acquired Pattern Energy alongside Riverstone in 2020. Pattern Energy is one of the world’s largest privately owned developers and operators of wind, solar, transmission, and energy storage projects. It will leverage this new investment to advance its market-leading development pipeline of over 25 gigawatts (GW) of renewable energy and transmission projects and support its operating facilities and in-construction portfolio of nearly 10,000 megawatts (MW) across North America. The transaction is expected to close in the first half of 2025, subject to regulatory approvals and other customary closing conditions. The Sidley team is being led by Private Equity/M&A partners Brien Wassner and Chris Barbuto, senior managing associate Rachel Fridhandler, and Energy partner Greg Lavigne. Additional team members include Sam Hulsey, Victoria Richmond, Sarah Wiley, Kyle Patel, Tamia Sutherland, and law clerk Landon Garfinkel (M&A and Private Equity); C.J. Polito, Keturah Brown, John David Thompson, Marcela Varela, Juan Camarena Paz, Meredith Kuykendall, Annaliese Oliveira, Charlie Peskin, Alexander Thompson, and law clerks Julien Blanchard and Zev Falik (Energy and Infrastructure); Christian Brause, John Schaff, and Andrew Smith (Tax); Lauren Gallagher, Gregory Matisoff, and Ryan McLeod (Employee Benefits and Executive Compensation); John Kuster, Danica Muir, and Zachry Tannis (Commercial Litigation and Disputes); Jen Fernandez, Kayla Scott, and Nick Wiggins (Global Arbitration, Trade and Advocacy); Keith Hayden Del Prete, Jonathan Koh, and Serena Patel (Real Estate); Alex Csordas (Capital Markets); Heather Palmer and Maureen Crough (Environmental); Rebecca Stuart and Allison Ivey Toth (Labor, Employment and Immigration); Steve McInerney and Sasha Hondagneu-Messner (Privacy and Cybersecurity); Alena Thomas (Global Finance); Scott Goldstein (Insurance); Rachelle Soderstrom (Technology and Life Sciences Transactions); and Craig Francis Dukin (White Collar Defense and Investigations).

Dec 16

3 min

Illumina and Grail on Friday defeated a proposed class action alleging they lied to investors who bought artificially inflated Illumina stock whose prices plunged following several purported disclosures, after a California federal judge said the investors hadn't adequately pled which disclosures corrected any alleged misstatements that caused their losses. In a nine-page ruling, U.S. District Judge Linda Lopez of the Southern District of California granted a pair of dismissal motions filed in November by Illumina and its spinoff cancer test maker Grail Inc. against a consolidated second amended complaint alleging securities law violations related to the parties' ill-fated $8 billion merger. Judge Lopez, however, granted the plaintiffs leave to amend their suit, which they have until Oct. 27 to file. According to court papers, Illumina created Grail as a subsidiary 10 years ago, and it went on to develop "Galleri," a noninvasive, multi-cancer-early-detection test that sought to identify different types of cancer from a single blood draw. Investors, however, accused company insiders and executives of making misleading statements about the transaction, including that Illumina would expedite the adoption of the Galleri test that was nearing FDA approval and commercialization. That caused stock prices to soar, the investors alleged. The U.S. Federal Trade Commission and the European Commission stepped in, expressing concerns that the deal could lessen competition, subjecting it to a "standstill," court records show. The FTC ordered Illumina to unwind the merger in the spring of 2023. Eight months later, the Fifth Circuit vacated that order. Despite the Fifth Circuit's ruling, Illumina announced that it would either sell Grail directly or spin it off through a capital market transaction by summer of 2024. Investors further alleged that Galleri was "unproven and clinically useless," that the FDA rejected proposed clinical trials for it, and that Illumina had no plan to speed up adoption of the technology. Illumina then purportedly issued several corrective disclosures that later caused stock prices to dip, the plaintiffs alleged. Those disclosures include Illumina's announcement pushing forward with the merger in August 2021 despite the FTC stepping in, an article questioning the validity of Galleri, Illumina revealing information that raised questions regarding the timeline for Galleri's clinical validity and commercial adoption, the departure of its executive and a headcount reduction in its research and development. In addition, and the SEC opened an investigation into Illumina in August 2023. The investors further referenced a verified complaint that alleged Illumina's directors were conflicted since they were "poisoned by their personal stake" in the Grail merger. On Nov. 12, Grail and Illumina moved to axe the suit, arguing that it was nothing more than "hindsight-fueled criticisms" of Illumina's business decisions. Illumina maintained that nobody was "more disappointed" than it over the failed merger. Illumina argued that the investors failed to plead loss causation through a "laundry list of alleged corrective disclosures" and didn't show a link between the fraud and their losses by tracing the losses back to the very facts the defendants purportedly lied about. But investors opposed dismissal, arguing that the Ninth Circuit held in Mineworkers' Pension Scheme v. First Solar Inc. that there is an "infinite variety of causation theories" and that loss causation is pled "'even if the market was unaware at the time that fraud' resulted in the stock decline." On Friday, Judge Lopez sided with the defendants' arguments, pointing out that the investors do not specify which misrepresentations the disclosures apparently rectified, "leaving it to defendants and this court to guesstimate the connections." "This is inappropriate; 'precisely the kind of connect-the-dots-exercise that should not be required of courts and defense counsel,'" the order said, echoing Illumina's dismissal argument. "Indeed, such 'failure to plead with particularity and distinguish among the various misstatements and revelations that allegedly caused that decrease' in the market is grounds for dismissal." Judge Lopez pointed out that the investors must lean on a fraud-on-the-market theory to show loss causation, which means they must link their losses back to the things the defendants allegedly lied about, with adequate particularity. "Here, that means making some attempt to actually link each of the nine corrective disclosures to each defendant's prior misstatement on that topic instead of forcing the court — and more importantly Defendants — to speculate how the jigsaw puzzle connects in plaintiffs' mind," the order said. John Rizio-Hamilton of Bernstein Litowitz Berger & Grossmann LLP, co-lead counsel for the proposed class and lead plaintiffs, said the plaintiffs' team had no comment on the order. Representatives for the Lumina defendants declined to comment. The investors are represented by John Rizio-Hamilton, Jonathan D. Uslaner, Michael D. Blatchley, Alec Coquin, Michael Mathai and Emily A. Tu of Bernstein Litowitz Berger & Grossmann LLP. Grail Inc. and its co-defendants are represented by Colleen C. Smith and Alexander C.K. Wyman of Latham & Watkins LLP. Illumina Inc. and its co-defendants are represented by Koji F. Fukumura, Heather M. Speers and Brian M. French of Cooley LLP. The case is In re Illumina Inc. Securities Litigation, case number 3:23-cv-02082, in the U.S. District Court for the Southern District of California.

Sep 26

4 min

Sidley represented LuminArx Capital Management (“LuminArx”) in its equity financing with AMD of Vultr (“Vultr”), the world’s largest privately held cloud infrastructure company, now valued at US$3.5 billion. Vultr will use the funds to support accelerated global expansion in AI infrastructure and cloud computing. LuminArx is a global alternative investment manager focused on Special Situations investing with an eye toward providing innovative, flexible, and strategic capital solutions. The team was led by Tim Chandler (Private Equity and M&A) and Samantha Seley (Energy and Infrastructure), and included Rebekah J. Maloney, Ashley S. Rogers, and Kelly Katherine Ball (all Private Equity and M&A); Daniel Allison, Khoa Nguyen, Quan Lu, Emily Eng, and Caroline Speck (all Energy and Infrastructure); Angela Richards (Tax); Scott Goldstein (Insurance); William Long, Colleen Brown, Sasha Hondagneu-Messner, Ash Nagdev, Matthias Bruynseraede, and Anila Rayani (all Privacy and Cybersecurity); Marian Fielding and Eric Winwood (both Employee Benefits and Executive Compensation); Whitney Beber (Commercial Litigation and Disputes); Leslie Shubert (White Collar Defense and Investigations ); Paul Kariyawasam, Rachelle Soderstrom, and Dusan Clark (all Technology and Life Sciences Transactions); Cathryn Le Regulski and Sara Salmonson (both Labor, Employment and Immigration); Heather Palmer (Environmental); James Mendenhall, Sven De Knop, Alessandra Moroni, and trainee associate Laura Verbeken (all Global Arbitration, Trade and Advocacy); Patrick Harrison and Bethany Wise (both Antitrust and Competition); and Marc Korman (Transportation).~~Sidley represented LuminArx Capital Management (“LuminArx”) in its equity financing with AMD of Vultr (“Vultr”), the world’s largest privately held cloud infrastructure company, now valued at US$3.5 billion. Vultr will use the funds to support accelerated global expansion in AI infrastructure and cloud computing. LuminArx is a global alternative investment manager focused on Special Situations investing with an eye toward providing innovative, flexible, and strategic capital solutions. The team was led by Tim Chandler (Private Equity and M&A) and Samantha Seley (Energy and Infrastructure), and included Rebekah J. Maloney, Ashley S. Rogers, and Kelly Katherine Ball (all Private Equity and M&A); Daniel Allison, Khoa Nguyen, Quan Lu, Emily Eng, and Caroline Speck (all Energy and Infrastructure); Angela Richards (Tax); Scott Goldstein (Insurance); William Long, Colleen Brown, Sasha Hondagneu-Messner, Ash Nagdev, Matthias Bruynseraede, and Anila Rayani (all Privacy and Cybersecurity); Marian Fielding and Eric Winwood (both Employee Benefits and Executive Compensation); Whitney Beber (Commercial Litigation and Disputes); Leslie Shubert (White Collar Defense and Investigations ); Paul Kariyawasam, Rachelle Soderstrom, and Dusan Clark (all Technology and Life Sciences Transactions); Cathryn Le Regulski and Sara Salmonson (both Labor, Employment and Immigration); Heather Palmer (Environmental); James Mendenhall, Sven De Knop, Alessandra Moroni, and trainee associate Laura Verbeken (all Global Arbitration, Trade and Advocacy); Patrick Harrison and Bethany Wise (both Antitrust and Competition); and Marc Korman (Transportation).

Dec 18

2 min