On March 1, 2011, Judge Richard Seeborg of the U.S. District Court for the Northern District of California granted defendants’ motions and dismissed all claims in the securities class action litigation including claims relating to the paired April 29, 2009 public offerings of SunPower Corporation’s Class A Common Stock shares and 4.75% Senior Convertible Debentures due 2014. The order is Plichta v. SunPower Corp., Lead Case No. C 90-5473 RS (N.D. Cal. Mar. 1, 2011).

Shearman & Sterling represented the seven underwriter defendants, including Credit Suisse as the lead underwriter for the Class A Common Stock offering and Deutsche Bank as the lead underwriter for the convertible debenture offering. In dismissing the Section 11 claim, the court determined that plaintiffs had not alleged tracing (and failed to explain how they hoped to prove tracing) as to the Class A shares, and also determined that the one plaintiff who had purchased in the convertible debenture offering failed to allege statutory damages even though the plaintiff had sold the debentures at a loss.

This outcome is noteworthy in that it the first decision in the Ninth Circuit (and perhaps only the second decision in the country) to hold that a plaintiff has no cognizable Section 11 damages when a security is sold above the offering price even though the plaintiff suffered an actual financial loss.

The San Francisco-based team included partner Stephen D. Hibbard, and associates Sean Strauss and Jared Sams, and legal assistant Karen Becker.