Joshua E. Stephens

Simpson Thacher advised Blackstone in connection with its investment (through funds managed by its private equity strategy for individual investors) in Air Control Concepts (“AIR”), previously known as Hobbs & Associates. AIR partners with and supports leading commercial HVAC equipment manufacturers and is headquartered in Norfolk, Virginia. Blackstone invested alongside existing investors, funds affiliated with Madison Dearborn Partners and AIR’s management team.~~The Simpson Thacher team included: Anthony Vernace, William Allen, Theresa Scharff, Simon Teich and Sichen Zhang (M&A); Jonathan Goldstein and Zev Klein (Tax); Gregory Grogan, Joshua Stephens and Mtume Sangiewa (ECEB); Brian Gluck (Credit); Lori Lesser, Bobbie Burrows and Chandler Gerard-Reimer (Intellectual Property); and Krista McManus (Real Estate).

Jul 15

1 min

The Firm is representing Laborie Medical Technologies, Inc., a Patricia Industries portfolio company, in connection with its definitive agreement to acquire Urotronic, Inc. The transaction consists of an upfront cash payment of $255 million and up to an additional $345 million in potential commercial and reimbursement milestone payments. The transaction is expected to be completed during the fourth quarter 2023.~~In conjunction with the Urotronic acquisition, Laborie will also make a $5 million strategic equity investment into GIE Medical, Inc., a clinical stage company spun out of Urotronicm which is developing drug-coated balloon technology for treatment of strictures within the gastrointestinal tract which could, like Optilume urethral strictures, offer a highly differentiated and innovative solution for treatment of these conditions.~~Urotronic, headquartered in Plymouth, Minnesota, is a medical device company currently conducting clinical trials to support global commercialization of their products. The Optilume® drug-coated balloon technology provides a minimally invasive treatment option for men suffering from urinary tract conditions like urethral strictures and benign prostatic hyperplasia. The drug-coated balloon technology creates a paradigm change from the methods currently used by urologists to treat these conditions.~~Headquartered in Portsmouth, New Hampshire, Laborie is a global medical technology company focused on Urology, Urogynecology, Gastroenterology, Obstetrics, Gynecology & Neonatal Health. Laborie manufactures and delivers high-quality, high-impact diagnostic and therapeutic products that help clinicians and hospitals preserve and restore patient dignity.~~Patricia Industries is a long-term owner that invests in companies and works to develop each company to its full potential. Patricia Industries is a part of the industrial holding company Investor AB, whose main owner is the Wallenberg Foundations.~~The Simpson Thacher team includes Michael T. Holick and Daniel Lee (M&A); Sean Dougherty and Rachel Lerman (Capital Markets); Sophie Staples and Andrew Mandelbaum (Tax); Jeannine McSweeney and Joshua Stephens (ECEB); Vanessa Burrows and Nawa Lodin (Healthcare); Alysha Sekhon (Intellectual Property); Krista McManus (Real Estate); Timothy Mulvihill (Environmental); and Steven DeLott (Insurance).

Jun 9

1 min

The U.S. Supreme Court on Monday granted the government's request to participate in oral arguments in a case addressing whether internet service providers can be held liable for their customers' infringing activity online. In a bulk list of orders, the justices granted a motion the government made in September asking for 10 minutes of time at oral arguments in the case between ISP Cox Communications and a group of music labels. In its motion, the government said it had a substantial interest in protecting intellectual property and "ensuring the broad availability of critical communications services like the internet." The government on Sept. 5 filed an amicus brief in the case supporting Cox's appeal and seeking the reversal of the Fourth Circuit's decision that upheld a Virginia federal jury's finding that the internet service provider was liable for contributory infringement. Solicitor General D. John Sauer said the circuit court's interpretation of contributory copyright infringement was too broad and not in line with the high court's precedent. He also said it isn't enough for a party to just know about an infringing use to make it liable. The music labels, which include Sony Music Entertainment, Capitol Records LLC and Universal Music Corp., sued Cox on allegations of contributory and vicarious copyright infringement, and a jury said Cox was liable for both types of infringement and its conduct was willful. On appeal, the Fourth Circuit affirmed the contributory infringement verdict but reversed the vicarious liability finding and remanded the case for a recalculation of damages. The music labels asked the Supreme Court to address whether the Fourth Circuit was right to vacate the $1 billion jury award, but the justices denied that request the same day they agreed to take up Cox's appeal. Cox said in a brief to the justices in August that leaving the jury verdict in place could force it to sever internet connections, and the publishers responded in October that the case is not about disconnecting "innocent grandmothers or hospitals" from the internet and asked the justices to leave the contributory infringement finding in place. In a brief filed Friday, Cox said that the music labels have "deluged the nation's ISPs with automated notices" of user infringement for years and that once an ISP receives two notices for one internet account, it has to terminate that account or be considered a willful contributory infringer. "That theory prevailed below. Though plaintiffs now try to distance themselves from this two-notices-and-terminate rule, it is what they must defend," Cox said. "Their defense fails as a matter of law on every level, no matter how much invective plaintiffs hurl at Cox, how many times they quote internal emails, or how often they invoke the jury." Cox said the labels were insisting that the case was about habitual copyright offenders and that Cox was an "egregious" outlier in the amount of infringement it allows, but it said the record tells a different story. The labels have suggested that the two-notices-and-terminate rule would not trigger mass internet evictions but can't deny that courts have applied this rule "uniformly across 57,000 homes and businesses," Cox said. The group has not contested that Cox's anti-infringement program suspended over 67,000 internet accounts during the claim period, the brief said, and if it is now able to show that program was a failure, then "no ISP is safe." Providing generalized internet connection does not amount to contributory infringement, Cox said, since that type of infringement requires it to take affirmative action with the intent of assisting direct infringers. A representative for Cox did not immediately respond to requests for comment, nor did counsel for the music labels or a representative for the government. Cox is represented by E. Joshua Rosenkranz, Christopher J. Cariello, Alexandra Bursak, Gavin McGimpsey, Edward Williams, Abigail Colella and Kamilyn Y. Choi of Orrick Herrington & Sutcliffe LLP and Roman Martinez, Sarang V. Damle and Brent T.F. Murphy of Latham & Watkins LLP. The music publishers are represented by Paul D. Clement of Clement & Murphy PLLC, Matthew J. Oppenheim, Scott A. Zebrak and Jeffrey M. Gould of Oppenheim & Zebrak LLP and Catherine E. Stetson, Jo-Ann Tamila Sagar and Michael J. West of Hogan Lovells. The government is represented by U.S. Solicitor General D. John Sauer. The case is Cox Communications Inc. et al. v. Sony Music Entertainment et al., case number 24-171, in the Supreme Court of the United States.

Nov 10

3 min

Simpson Thacher represented TPG Rise Climate in connection with its acquisition of MIRATECH Corp., a global market leader in aftermarket emissions and noise reduction technology for stationary industrial engines. The transaction closed on August 20, 2024. Financial terms of the transaction were not disclosed.~~Founded in 1992 and headquartered in Tulsa, Oklahoma, MIRATECH’s core mission is to improve the environment by providing engineered solutions that reduce air and noise pollution. Their product and service expertise lies in significantly reducing or eliminating pollutants such as Carbon Monoxide, Oxides of Nitrogen, Hydrocarbons, Particulate Matter, VOCs, Hazardous Air Pollutants (HAPs), Air Toxics, and various other pollutants from the environment.~~TPG Rise Climate is the dedicated climate investing strategy of TPG’s $18 billion global impact investing platform TPG Rise.~~The Simpson Thacher team includes Katherine Krause, Anthony Vernace, Robert Hausen, David Kim, Michael Lazris and Dashia Kwok (M&A); Jeannine McSweeney, Joshua Stephens and Warsame Elmi (Executive Compensation and Employee Benefits); Russell Light and Matthew Lester (Tax); Lori Lesser (Intellectual Property); Steven DeLott (Insurance); Krista McManus (Real Estate); Abram Ellis (Regulatory); and Michael Isby (Environmental).

Apr 9

1 min

The Ninth Circuit on Monday affirmed the dismissal of claims that investors in Bloom Energy Corp. filed against PriceWaterhouseCoopers, saying that as the renewable energy company's outside accountant, PwC couldn't be held strictly liable for financial statements simply because it certified them. In a published opinion, U.S. Circuit Judge Milan D. Smith Jr. wrote on behalf of a three-judge panel that Section 11 of the Securities Exchange Act does not impose strict liability on accountants for a client's financial statements or information in a registration statement, regardless of whether the accountant prepared or certified them. And under U.S. Supreme Court precedent in Omnicare Inc. v. Laborers District Council Construction Industry Pension Fund, an independent accountant is also protected from liability for opinions it made about the documents "as long as the opinion was sincerely held," Judge Smith wrote. Judge Smith wrote that PwC is not liable in this case as a certifier of Bloom Energy's financial statements because Section 11 "does not require that PwC, by certifying the financial statements, guarantee that the documents provided by Bloom Energy were free from error." An audit opinion PwC made on Bloom Energy financial statements also "did not make any material misstatements of fact or omissions but was rather a subject of opinion" based on a "subjective judgment," Judge Smith wrote. Bloom Energy designs, manufactures and sells fuel cell servers that convert natural gas or biogas into electricity, according to the Ninth Circuit opinion. The Ninth Circuit's ruling stems from a proposed class action that current and former Bloom Energy stockholders filed in 2019 against the renewable energy company, several of its officers and directors and underwriters of its 2018 initial public offering. According to the latest version of the suit, filed in April 2020, Bloom Energy made "materially false and misleading statements" that artificially inflated its stock price, including by misleading investors about construction delays that were "plaguing its business," misrepresenting the life cycle of its fuel cells and misrepresenting its energy savers' efficiency and pollution outputs. The investors alleged that the misrepresentations and omissions allowed Bloom Energy to report decreased liabilities and increased revenue in financial statements included in its registration statement and those that were published afterward. They said Bloom Energy was able to go public at a higher price due to "greater interest in its IPO, and to continue to inflate its stock price until the truth became known through revelations of third parties and ultimately defendants' admission on Feb. 12, 2020, that Bloom Energy's financial statements dating back to 2016 were misstated." Bloom Energy's stock price declined from its IPO price of $15 per share to a 52-week low of $2.44 per share as a result of the misconduct, the investors alleged. Meanwhile, PwC, which the investors said helped Bloom Energy prepare its financial statements for the IPO, was "strictly liable" to investors for actionable statements and omissions in Bloom Energy's registration statement, the investors asserted. The investors settled their claims with all defendants except PwC after a California federal judge partially dismissed claims against the Bloom Energy parties and all claims against PwC. In May 2024, the U.S. District Court for the Northern District of California entered final judgment and tossed all claims against PwC, prompting the investors' appeal to the Ninth Circuit. Among the investors' arguments on appeal was that the lower court's decision to dismiss violated the "explicit language" of the Securities Act, was contrary to U.S. Supreme Court precedent and undermined the "entire purpose of the regulatory and liability regime minted by Congress." They argued that PwC was liable for false statements in Bloom Energy's 2017 pre-IPO financial statements concerning revenue, net loss and net loss per share because PwC had certified them in the registration statement. The investors, on appeal, challenged three line items referenced in Bloom Energy's registration statement that related to whether managed services agreements in the case should be classified as operating or capital leases, according to the Ninth Circuit. But the Ninth Circuit agreed with the lower court's finding that the line items were opinions that were not actionable. It said that because investors failed to show that Bloom Energy's opinions were based on untrue statements or information that the company did not believe, the investors "cannot demonstrate that PwC certified untrue facts or information." Judge Smith said the investors thus "failed to establish liability for PwC's opinion." "The record demonstrates that the classification of [managed service agreements] was a judgment call, and the registration statement thoroughly explained how it reached the classification," Judge Smith wrote. "PwC was reasonable under the circumstances to certify Bloom Energy's classification based on the evidence at that time." U.S. Circuit Judges Milan D. Smith Jr. and N. Randy Smith and U.S. District Judge Douglas L. Rayes of the District of Arizona, sitting by designation, sat on the panel for the Ninth Circuit. A PwC spokesperson told Law360 on Monday that the company is "pleased with the court's thoughtful and comprehensive rejection of the plaintiffs' radical attempt to expand auditor liability under Section 11." "As the court correctly held, auditors are responsible only for their statements, not for the line items in an issuer's financial statements," the spokesperson said. "The court rightly ruled that the proposed unprecedented expansion advocated by plaintiffs was inconsistent with the statute, Supreme Court precedent and the role that auditors play in the securities offering process." Counsel for the investors did not immediately respond to a request for comment. The investors are represented by Nicholas I. Porritt and Adam M. Apton of Levi & Korsinsky LLP, and by Reed R. Kathrein, Lucas Gilmore and Kevin K. Green of Hagens Berman Sobol Shapiro LLP. PwC is represented by E. Joshua Rosenkranz, Eliza Lehner, Jodie C. Liu and Edward H. Williams II of Orrick Herrington & Sutcliffe LLP, and by Lisa Bugni of King & Spalding LLP. The case is James Everett Hunt et al. v. PricewaterhouseCoopers LLP et al., case number 24-3568, in the U.S. Court of Appeals for the Ninth Circuit.

Nov 10

5 min