Deborah Birnbach, a partner in Goodwin’s Securities Litigation + White Collar Defense Group and a member of the firm’s Executive Committee, concentrates in the areas of securities litigation, including class action defense; SEC, regulatory and internal investigations; M&A-related litigation; stockholder disputes; fiduciary duty claims; proxy contests; founder and partnership disputes; and private equity litigation surrounding private financings. Her securities and shareholder litigation practice is national in scope and involves representing investment managers, issuers and their directors and officers in securities and corporate governance matters across the country. In addition to engaging in active litigation, Ms. Birnbach counsels clients and their boards in managing and avoiding litigation risk, including through arbitration, mediation and other alternative dispute resolution methods. Ms. Birnbach’s clients include public and private healthcare and life sciences companies, technology companies, and financial services companies, their boards and officers, and private equity firms and their partners. Ms. Birnbach has conducted numerous internal corporate investigations for audit committees and other special board committees into financial accounting and corporate governance-related matters, including whistleblower matters under Sarbanes-Oxley and Dodd-Frank, and relating to financial accounting for alleged backdating of stock option grants for the audit committee of the board of a Fortune 500 technology company. Ms. Birnbach’s securities and shareholder litigation matters have involved allegations of insider trading, misleading disclosures, insufficient deal consideration, improper revenue recognition and other alleged accounting irregularities, self-dealing and breach of fiduciary duty, among other issues. She has also represented clients in FINRA inquiries and in regulatory proceedings brought by the SEC, the DOL and other regulators relating to possible accounting irregularities, the accuracy and completeness of corporate disclosures to investors and securities trading by corporate officers and directors, among other matters. Her recent matters for institutional asset management clients and other fiduciaries have been related to subprime events and the credit market dislocation. Ms. Birnbach’s representative experience includes:
With colleagues in the M&A group, Ms. Birnbach works with integrated deal teams on M&A transactions, representing targets, acquirers and their financial advisers. Recently, a team of Goodwin lawyers represented investment bank Centerview Partners in connection with Qualcomm Incorporated (NASDAQ: QCOM) and NXP Semiconductors N.V.’s (NASDAQ: NXPI) announced $37 billion definitive agreement under which Qualcomm will acquire NXP, a leader in high-performance, mixed-signal semiconductor electronics. Centerview served as financial adviser to the Qualcomm Board.
Trulia/Zillow Merger Litigation (2016): Represented Trulia, and its board of directors, in class action lawsuits in Superior Court for San Francisco County, California, and the Delaware Court of Chancery challenging the $3.5 billion all-stock merger with Zillow Inc. Deal closed on time after negotiation of favorable settlement. Successfully obtained dismissal of litigation after a highly publicized settlement approval process, and obtained a ground-breaking ruling in 2016 from the Delaware Court of Chancery severely limiting pre-merger disclosure challenges and settlements based on immaterial disclosures.
Teva/Auspex Pharmaceuticals, Inc. Merger Litigation (2015): Representing Teva in merger litigation in Court of Chancery in Delaware, brought by stockholders of Auspex in connection with Teva’s acquisition of Auspex. Plaintiffs dropped their request for an injunction and the transaction closed on time on May 5, 2015.
Life Sciences Public Company (2015): Represented public life sciences client in connection with threatened class action merger litigation by stockholder in connection with acquisition of client by global pharmaceutical company in a $1 billion strategic transaction. Convinced stockholder to drop its threatened claims before filing and transaction closed on time.
Onyx Pharmaceuticals, Inc. Merger Litigation (2013): Representing board of directors of Onyx in connection with shareholder class action litigation in Superior Court for San Mateo County, California and Delaware Court of Chancery, challenging Onyx’s $10.4 billion merger with Amgen. Successfully defeated plaintiffs’ efforts to disrupt tender offer and transaction closed on time.
Courier Corporation Merger Litigation (2015): Represented board of directors of Courier Corporation in connection with shareholder class action breach of fiduciary duty litigation challenging acquisition of Courier. Plaintiffs voluntarily dismissed the complaint with no settlement.
Mac-Gray Merger Litigation (2014): Represented Mac-Gray and its board of directors in breach of fiduciary duty class action challenging acquisition of Mac-Gray by CSC ServiceWorks in January 2014. The case was settled favorably and the transaction closed on time.
Eloqua Merger Litigation (2013): Represented Eloqua, Inc., a provider of on-demand revenue performance management software and its board of directors in connection with shareholder class actions filed in the Eastern District of Virginia and in the Delaware Court of Chancery challenging Eloqua’s $930 million sale to Oracle Corporation. After initial discussions and negotiations with plaintiffs’ counsel, obtained voluntary dismissal of the litigation, and the transaction closed on time.
athenahealth Merger Litigation (2013): Represented athenahealth, Inc. in its acquisition of Epocrates, Inc. and litigation brought by Epocrates’ shareholders challenging the $293 million transaction in Superior Court for San Mateo County, California, including allegations that athenahealth aided and abetted the Epocrates board’s alleged breaches of fiduciary duty. Obtained a favorable settlement and the transaction closed on time.
ZOLL Merger Litigation (2013): Represented ZOLL Medical Corporation and its board of directors in connection with shareholder litigation challenging Asahi Kasei’s $2.2 billion acquisition of ZOLL in Massachusetts state court. The matter was settled favorably, and the transaction closed on time.
Veramark Merger Litigation (2013): Represented Veramark Technologies, Inc. and its board of directors and obtained voluntary dismissal from plaintiffs in class actions filed in New York Supreme Court and the Court of Chancery in Delaware challenging the sale of Veramark to subsidiaries of Clearlake Capital Partners. The tender offer and transaction closed on time.
Ariba Merger Litigation (2012): Represented Ariba and its board of directors and obtained voluntary dismissal from plaintiffs of six putative class actions challenging Ariba/SAP $4.3 billion merger in the Superior Court, Santa Clara County, California and in the Court of Chancery in Delaware. All breach of fiduciary duty and aiding and abetting claims dismissed and transaction closed on time.
Phase Forward Merger Litigation (2011): Won affirmance by Massachusetts Appeals Court of dismissal of class action challenging Phase Forward’s merger with Oracle Corporation. The Appeals Court affirmed dismissal of breach of fiduciary duty claims against Phase Forward’s directors under Revlon and for alleged omissions from the proxy disclosures. Previously defeated plaintiffs’ preliminary injunction motion in Massachusetts Superior Court. The Appeals Court also affirmed dismissal of aiding and abetting claims against the entity defendants.
Leeds Equity Partners (Nobel Learning Merger Litigation) (2011): Represented Leeds Equity Partners in connection with its acquisition of Nobel Learning Communities, Inc. in litigation brought by shareholders of Nobel Learning in the Court of Common Pleas in Philadelphia, Pennsylvania. Plaintiffs sought to enjoin Leeds’ $150 million acquisition of Nobel Learning and alleged that Leeds aided and abetted in breaches of fiduciary duty by the Nobel Learning directors. Achieved a favorable settlement and the transaction closed on time.
Securities Class Action Cases
Zafgen Securities Class Action (2017): Won affirmance by the U.S. Court of Appeals for the First Circuit of dismissal with prejudice of securities class action litigation against Zafgen and its CEO concerning allegations of securities fraud in connection with clinical trial disclosures.
Imprivata Securities Class Action (2017): Won dismissal with prejudice for health care SaaS company, its CEO and CFO, of securities fraud class action in the U.S. District Court for the District of Massachusetts. Plaintiffs alleged false and misleading statements and omissions under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 in connection with missing quarterly revenue guidance.
Zafgen Securities Class Action (2016): Won dismissal with prejudice of securities class action litigation under Section 10(b) and Rule 10b-5 against life sciences company and its CEO arising out of adverse events in clinical trial for lead product candidate in the U.S. District Court for the District of Massachusetts.
Esperion Therapeutics Securities Class Action (2016): Won dismissal with prejudice of securities class action under Section 10(b) and Rule 10b-5 against clinical stage company focused on developing non-statin LDL-C lowering therapies and its CEO. In the U.S. District Court of the Eastern District of Michigan, plaintiffs alleged false and misleading statements in connection with the FDA approval process for the company’s lead product candidate.
Ampio Securities Class Action (2016): Won dismissal of securities class action litigation against Ampio, a life sciences company, and certain of its executives brought under Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and Section 11 of the Securities Act of 1933 in the U.S. District Court for the Central District of California. Plaintiffs alleged false and misleading statements and omissions in connection with conduct of the clinical trial for Ampion, the Company’s drug candidate.
Epocrates Securities Class Action (2016): Won dismissal of First and Second Amended Complaints of Section 10(b) and Rule 10b-5 claims in shareholder class action against Epocrates, a health care IT company, and its CEO and CFO in the U.S. District Court for the Northern District of California. Obtained favorable settlement funded entirely by insurance after Third Amended Complaint survived dismissal.
Metabolix Securities Class Action (2013): Won complete dismissal with prejudice of Section 10(b) and Rule 10b-5 claims in a shareholder class action against Metabolix, its CEO and CFO in the U.S. District Court for the District of Massachusetts. Plaintiffs alleged misrepresentations and omissions in connection with certain milestones in its biopolymer plastic manufacturing business.
The Princeton Review Securities Class Action Litigation (2012): Won dismissal with prejudice of securities class action litigation brought under Section 11, 12(a)(2) and 15 of the Securities Act of 1933 against this educational services company, certain of its current and former officers and directors and its underwriter in the U.S. District Court for the District of Massachusetts. This class action concerned a secondary offering of equity securities and challenged the company’s disclosures concerning its turnaround efforts and the trends and uncertainties in its business at the time of the offering.
MELA Sciences Securities Class Action Litigation (2012): Won dismissal of securities fraud class action asserting violations of Section 10(b) and Rule 10b-5 under the Securities Exchange Act of 1934 against MELA Sciences and three of MELA’s officers and directors in the U.S. District Court for the Southern District of New York. The allegations concerned alleged false and misleading statements prior to MELA obtaining FDA approval for its Melafind device, designed to assist in the detection of melanoma.
athenahealth, Inc. Securities Class Action Litigation (2011): Won complete dismissal of a putative class action alleging securities fraud and related claims against this software as a service (SaaS) company and certain current and former senior executives arising out of a revenue restatement. The complaint alleged misstatements in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and sought damages for a class period of over two years.
NeuroMetrix, Inc. Securities Class Action Litigation (2011): Won affirmance by the U.S. Court of Appeals for the First Circuit of dismissal with prejudice of a putative class action alleging securities fraud and related claims against this medical device company and certain of its current and former officers. The suit alleged that various statements made by the company relating to reimbursement for its product were false or misleading in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The U.S. District Court for the District of Massachusetts granted our motion to dismiss the case in its entirety and with prejudice. Also achieved a favorable settlement of a related shareholder derivative action that involved no payment of money by defendants.
Inverness Medical Innovations, Inc. (now Alere, Inc.) Securities Class Action Litigation (2009): Won dismissal with prejudice of securities class action litigation brought under Section 11 of the Securities Act of 1933 against this leading medical diagnostic products company and its board of directors and senior management. This class action concerned a $737 million secondary offering of equity securities and challenged the company’s disclosures concerning the costs associated with its integration of acquired companies. Plaintiffs dropped their appeal of the case and no settlement monies were paid.
Millennium Global Investments, Ltd. (2009): Won dismissal of a securities fraud action involving allegations that various statements made by this hedge fund and other defendants relating to one of its funds were false or misleading violation of Section 10(b) of the Securities Exchange Act of 1934 and state law. The court granted our motion to dismiss the complaint, dismissing all six of plaintiff’s state law claims with prejudice and dismissing the securities fraud claim with leave to amend. Favorably settled subsequent class action litigation in 2014 arising out of same fund.
Arbinet-thexchange, Inc. Securities Litigation (2007): Obtained dismissal with prejudice of securities class action litigation filed in federal district court in New Jersey under Section 11 of the Securities Act of 1933 relating to the initial public offering of the world’s leading electronic market for the trading of telecommunications capacity. Successfully argued to the court, among other things, that plaintiffs’ allegations were inconsistent with and contradicted by the company’s public disclosures. The court agreed, and threw the case out. Plaintiffs chose not to appeal and dropped the case. No settlement monies were paid.
Metabolix Derivative Action (2014): Won complete dismissal with prejudice of breach of fiduciary duty case in Massachusetts Business Litigation court against current and former directors for, among other reasons, plaintiffs’ failure to plead that making a demand on the board would have been futile.
J.L. Hammett Derivative Litigation (2010, 2013): Won summary judgment for defendants in Massachusetts Superior Court on breach of fiduciary duty claims concerning alleged excessive compensation in connection with sale transaction. The Massachusetts Court of Appeals affirmed the summary judgment ruling in 2013.
SEC Enforcement Actions
SEC Investigation Concerning Revenue Reserves (2017): Representation of technology company regarding accounting issues for various reserves. Resolved favorably with SEC declining to bring any enforcement action.
SEC Investigation Concerning Missed Expectations and Trading Issues (2016): Representation of HCIT company in connection with potential insider trading issues preceding disappointing results. Resolved favorably with no SEC action.
SEC Investigation Concerning Revenue Disclosures (2016): Representation of technology company in connection with investigation concerning disclosures about deferred revenue and corresponding disclosures. Resolved favorably for client with no SEC action.
SEC Investigation Concerning Fiduciary Duty Advisers Act Issues (2015): Representation of private equity fund registered investment adviser concerning fiduciary duty issues in connection with allocation of expenses between adviser and funds, and disclosures to investors. Resolved favorably for client with no SEC action.
SEC Investigation Concerning Revenue Recognition Issues (2014): Representation of software client concerning revenue recognition issues. Resolved favorably for client with no SEC action.
SEC Investigation Concerning Advisers Act Issues (2013): Representation of registered investment adviser concerning supervision of investment management employee. Resolved favorably for client with no SEC action.
SEC Investigation Concerning Revenue Restatement (2009): Represented international company in SEC formal investigation concerning revenue recognition practices in relation to recently acquired subsidiary. Resolved favorably for client with no SEC action.
SEC Investigation Concerning Whistleblower Complaint (2008) Representation of global communications components manufacturer in SEC investigation into whistleblower claims of purported accounting irregularities concerning expense reserves. Resolved favorably for client with no SEC action.
SEC Investigation Concerning Earnings Guidance (2008) Representation of global technology company in formal SEC investigation into adjustment of earnings guidance surrounding shift in business trends. Resolved favorably for client with no SEC action.
Proxy Contest Litigation
Relmada Therapeutics (2016): Won temporary restraining order and preliminary injunction in the U.S. District Court for the District of Nevada against activist stockholder seeking board seats. The court enjoined activist from soliciting proxies using false and misleading statements in violation of Section 14(a) of the Securities Exchange Act of 1934. Relmada’s nominees defeated the activist’s efforts in the proxy contest following the injunction we obtained in favor of the Company.
EverBank Icelandic Króna CD Class Action (2012): Won partial summary judgment for defendant bank in a class action in the U.S. District Court for the Northern District of California on contract claims brought on behalf of purchasers of CDs denominated in Icelandic króna. The claims concerned the bank’s closure of those CDs and conversion of the proceeds to U.S. dollars in response to the Icelandic banking crisis in Q4 2008. Settled remainder of case favorably.
CombinatoRx, Incorporated Contract Litigation (2009): Brought an action on behalf of CombinatoRx, a biopharmaceutical company focused on developing new medicines built from synergistic combinations of approved drugs, asserting claims against a contract manufacturer for fraudulent inducement, breach of contract and other claims arising out of the manufacture and distribution of one of CombinatoRx’s product candidates. Obtained a $3.7 million settlement for CombinatoRx.
Ms. Birnbach is chair of the board of trustees of Discovering Justice, a nonprofit organization that is a pioneer in civic and justice education. She has been an officer, a member of the council and co-chair of the Litigation Section and of the Business Litigation Committee of the Boston Bar Association. She has served on the Joint Bar Committee on Judicial Nominations, which reviews, evaluates and makes recommendations on the qualifications of individuals under consideration for judicial appointments in Massachusetts, and on the Merit Selection Committee, which reviews and makes recommendations on the qualifications of candidates for judicial appointments in the U.S. Bankruptcy Court in the District of Massachusetts.