Labaton Keller Sucharow LLP won an important appellate victory on behalf of its client Public Employees Retirement Association of New Mexico (PERA) in a long-running securities fraud class action against several former officers and directors of California utility company PG&E.  The United States Court of Appeals for the Ninth Circuit vacated an order that had stayed proceedings in the action for over a year.

The action arises from alleged false and misleading statements and omissions about PG&E’s safety and compliance practices leading up to wildfires caused by PG&E equipment that devastated Northern California in 2017 and 2018.  The District Court presiding over the action stayed the action pending the resolution of PG&E’s ongoing bankruptcy proceedings.    

On appeal, Labaton partner Carol Villegas successfully argued that the stay was not only lengthy but also impermissibly indefinite under Ninth Circuit precedent.  The Ninth Circuit agreed, reasoning that “its end date is triggered by the occurrence of an external event that is not limited in time.” The Ninth Circuit therefore remanded the action and directed the District Court to consider the prejudice that plaintiffs would suffer because of the stay.