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Slack Technologies v. Pirani

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Supreme Court of the United States
Slack Technologies v. Pirani
Term: 2022
Important Dates
Argued: April 17, 2023
Decided: June 1, 2023
Outcome
vacated and remanded
Vote
9-0
Majority
Chief Justice John Roberts • Clarence Thomas • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh • Amy Coney Barrett • Ketanji Brown Jackson

Slack Technologies v. Pirani is a case that was decided by the Supreme Court of the United States on June 1, 2023, during the court's October 2022-2023 term. The case was argued before the Supreme Court of the United States on April 17, 2023. In a unanimous opinion, the Court vacated and remanded the judgment of the United States Court of Appeals for the 9th Circuit, holding that, for lawsuits under Section 11(a) of the Securities Act of 1933, plaintiffs are required to prove that their shares were registered under a misleading statement. Justice Neil Gorsuch delivered the opinion of the court.[1]

HIGHLIGHTS
  • The issue: The case concerned Sections 11 and 12(a)(2) of the Securities Act of 1933 in relation to whether their requirement for plaintiffs to prove that they bought shares registered under the registration statement they claim is misleading. Click here to learn more about the case's background.
  • The questions presented: "Whether Sections 11 and 12(a)(2) of the Securities Act of 1933 require plaintiffs to plead and prove that they bought shares registered under the registration statement they claim is misleading."[2]
  • The outcome: In a unanimous opinion, the Court vacated and remanded the judgment of the United States Court of Appeals for the 9th Circuit, holding that, for lawsuits under Section 11(a) of the Securities Act of 1933, plaintiffs are required to prove that their shares were registered under a misleading statement. Justice Neil Gorsuch delivered the opinion of the court.[1]


    • The case came on a writ of certiorari to the United States Court of Appeals for the 9th Circuit. To review the lower court's opinion, click here.

    Timeline

    The following timeline details key events in this case:

    • June 1, 2023: The U.S. Supreme Court vacated and remanded the decision of the United States Court of Appeals for the 9th Circuit.
    • April 17, 2023: The U.S. Supreme Court heard oral argument.
    • December 13, 2022: The U.S. Supreme Court agreed to hear the case.
    • August 31, 2022: Slack Technologies, Llc (F/K/A Slack Technologies, Inc.) et al., appealed to the U.S. Supreme Court.
    • September 20, 2021: The U.S. Court of Appeals for the 9th Circuit affirmed the district court's partial denial of Slack's motion to dismiss Pirani’s class action lawsuit against them, and concluded that there is statutory standing under Sections 11 and 15, and Section 12(a)(2) in how it parallels with Section 11.

    Background

    One of the ways that large companies can list their stock for the first time on a public exchange is through an initial public offering (IPO). In an IPO, an initial period is implemented where only registered shares are sold. This period is not mandatory by law. Another avenue that companies can take to sell shares is through direct listings. In a direct listing, there is no initial period and both unregistered and registered shares can be sold.[3][4]

    On June 20, 2019, Slack went public through direct listings, and Fiyyaz Piriani purchased 250,000 shares in the company. In the next few months, Slack’s share price dropped due to a number of service disruptions. On September 19, 2029, Piriani brought a class action lawsuit against Slack to the United States District Court for the Northern District of California. Piriani alleges that Slack's registration statement was misleading because it did not inform shareholders of the generous terms of their service agreements, which state that Slack would provide service credits to customers when service disruptions occurred.[3][5]

    Slack moved to dismiss the lawsuit, challenging Piriani’s statutory standing because he cannot confirm if his shares were registered under the alleged misleading registration statement. The district court issued a partial denial of Slack’s motion to dismiss and held that in cases involving direct listings, plaintiffs are not required to prove that their shares were registered under the allegedly misleading registration statement. The United States Court of Appeals for the Ninth Circuit affirmed this ruling.[3][4]

    Questions presented

    The petitioner presented the following questions to the court:[2]

    Questions presented:
    “ Whether Sections 11 and 12(a)(2) of the Securities Act of 1933 require plaintiffs to plead and prove that they bought shares registered under the registration statement they claim is misleading.

    [6]

    		”

    Oral argument

    Audio

    Audio of oral argument:[7]



    Transcript

    Transcript of oral argument:[8]

    Outcome

    In a 9-0 opinion, the court vacated and remanded the judgment of the United States Court of Appeals for the 9th Circuit, holding that, for lawsuits under Section 11(a) of the Securities Act of 1933, plaintiffs are required to prove that their shares were registered under a misleading statement. Justice Neil Gorsuch delivered the opinion of the court.[1]

    Opinion

    In the court's majority opinion, Justice Neil Gorsuch wrote:[1]

    “

    Naturally, Congress remains free to revise the securities laws at any time, whether to address the rise of direct listings or any other development. Our only function lies in discerning and applying the law as we find it. And because we think the better reading of the particular provision before us requires a plaintiff to plead and prove that he purchased shares traceable to the allegedly defective registration statement, we vacate the Ninth Circuit’s judgment holding otherwise. Whether Mr. Pirani’s pleadings can satisfy §11(a) as properly construed, we leave for that court to decide in the first instance on remand.[6]

    		”
    —Justice Neil Gorsuch

    Text of the opinion

    Read the full opinion here.

    October term 2022-2023

    See also: Supreme Court cases, October term 2022-2023

    The Supreme Court began hearing cases for the term on October 3, 2022. The court's yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions in mid-June.[9]


    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 U.S. Supreme Court, "Slack Technologies, LLC, Fka Slack Technologies, Inc., et al. V. Pirani –Certiorari to the United States Court of Appeals for the Ninth Circuit," June 1, 2023
    2. ↑ 2.0 2.1 U.S. Supreme Court, "22-200 SLACK TECHNOLOGIES, LLC V. PIRANI: QUESTION PRESENTED," December 13, 2022
    3. ↑ 3.0 3.1 3.2 U.S. Supreme Court, "'Slack Technologies, LLC (F/K/A Slack Technologies, Inc.) et al. v. Fiyyaz Pirani on Petition for a Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit," August 31, 2022
    4. ↑ 4.0 4.1 Casetext, "Pirani v. Slack Techs.," September 20, 2021
    5. ↑ Scotusblog, "Justices grant review in two criminal cases and a securities lawsuit against Slack," December 13, 2022
    6. ↑ 6.0 6.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    7. ↑ Supreme Court of the United States, "Oral Argument - Audio," argued April 17, 2023
    8. ↑ Supreme Court of the United States, "Oral Argument - Transcript," argued April 17, 2023
    9. ↑ SupremeCourt.gov, "The Supreme Court at Work: The Term and Caseload," accessed January 24, 2022
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