Karen Pieslak Pohlmann

Karen represents issuers, their directors and officers, and underwriters in suits asserting claims under the federal securities laws, derivative suits and challenges to mergers and acquisitions. She has a strong track record of obtaining victories on motions to dismiss as well as favorable results at mediations. In addition, Karen has worked on briefs that successfully defeated plaintiffs’ motion for class certification in a securities fraud suit. Her cases have involved issues ranging from restatements, lowered guidance, adverse decisions by the FDA, changes in business strategy, executive compensation, alleged violations of FCA/FCPA, and challenges to the price and process in a merger or acquisition. She has also worked extensively with experts on damages and causation issues.

Her trial experience includes nonjury appraisal trials in the Delaware Court of Chancery, a Pennsylvania state court appraisal action, a federal nonjury trial involving the interpretation of a contract between a sales representative and a manufacturer, a nonjury trial in the Delaware Court of Chancery concerning the sale of a $39 million telecommunications business, and a five-week federal jury trial on lender liability claims, as well as the trial of a contested termination of parental rights motion. She has conducted direct and cross examinations of fact and expert witnesses.

Karen has been recognized for her pro bono work. Since the early 1990s, she has represented abused and neglected children in the Philadelphia Family Court and in criminal cases as a child advocate and regularly appears in Family Court.

After graduation from law school, Karen served as a law clerk for Judge Donald Van Artsdalen of the US District Court for the Eastern District of Pennsylvania.

Appellate Victories

• In In re Zimmer Biomet Holdings Inc. Derivative Litigation (Del. 2022), the Delaware Supreme Court affirmed the Chancery Court (Del. Ch. 2021) dismissal of derivative claims against Zimmer Biomet Holdings, Inc. and certain current and former officers and directors for failure to plead demand futility. The Supreme Court affirmed the Chancery Court opinion that: accepted our argument that plaintiffs failed to plead facts showing directors knew about regulatory compliance issues at one location and that these issues would negatively affect company’s financial performance; agreed with our position that complaint lacked facts showing that either material nonpublic information had been shared with private equity funds or directors knew funds had access to material nonpublic information; and further agreed with our points that facts pled in complaint contradicted any effort to plead failure of oversight and that fact federal court had denied motion to dismiss securities claim did not support plaintiffs’ argument that directors acted with requisite state of mind.
• In Cochran v. The Penn Mutual Life Insurance Company (11th Cir. 2022), N.D. Ga. 2020), the Eleventh Circuit affirmed the district court’s (N.D. Ga. 2020) dismissal of class action allegations against The Penn Mutual Life Insurance Co. and its brokerage subsidiary, Hornor, Townsend & Kent LLC (HTK). The complaint challenged as an alleged breach of fiduciary duty HTK’s marketing of tax-deferred annuities issued by Penn Mutual. The Court of Appeals found that the district court correctly accepted our argument that these class claims are precluded by the Securities Litigation Uniform Standards Act because the breach of fiduciary duty claim required a misrepresentation. The Eleventh Circuit stated that the complaint should be evaluated based on its “gravamen” or “essence,” not the words it used. The Court of Appeals noted that plaintiff did not challenge the district court ruling granting the motion to compel arbitration before the Financial Industry Regulatory Authority on the plaintiff’s individual claims. 
• In Spirrizzi v. Zyla Life Sciences (3d Cir, 2020), the Third Circuit affirmed the district court’s  dismissal of a putative class action alleging violations of the federal securities laws for failure to predict how the FDA would act in approving a drug. In re Egalet Corporation Securities Litigation, (E.D. Pa. 2018). In a sweeping 58 page opinion, the district court ruled in favor of defendants on virtually all issues ranging from the protection afforded by the safe harbor for forward-looking statements to the type of facts necessary to plead that defendants acted with the requisite state of mind. 
• In Retail Wholesale & Department Store Union Local 338 Retirement Fund v. Hewlett-Packard Co. (9th Cir. 2017), the Ninth Circuit affirmed the district court’s dismissal of securities fraud claims based on the company’s ethics code and statements relating to it, ruling that there had been no affirmative misrepresentation because the statements were not objectively verifiable, that any alleged misrepresentation was not material and that there was no duty to disclose any supposedly omitted facts “[b]ecause the affirmative statements did not create the impression of full compliance.” News coverage of this opinion is linked to this bio.
• In Doshi and City of Livonia Emps. Ret. Sys. v. General Cable Corp. (6th Cir. 2016), the Sixth Circuit Court of Appeals affirmed the district court’s dismissal of a putative class action alleging violations of the federal securities laws based on two restatements, finding that plaintiff had not adequately pled scienter.
• In MICROS Systems (Md. Ct. Spec. Appeals 2016, cert. denied Md. Court of Appeals 2017), the Court of Special Appeals affirmed the decision by the Circuit Court dismissing a challenge to a merger after the Circuit Court had denied a motion for expedited discovery. 
• In Plumbers and Pipefitters Local Union 719 Pension Fund v. Zimmer Holdings, Inc. (7th Cir. 2012), the Seventh Circuit Court of Appeals affirmed the district court’s dismissal of a putative class action case alleging violations of the federal securities laws based on a purported product flaw and FDA Form 483 observations.
• In LeMenestrel v. Warden (Pa. Super. 2008), the Pennsylvania Superior Court affirmed the dismissal of derivative claims after an evidentiary hearing in an opinion defining the proper scope for attorney lawyer involvement in an investigation by a special litigation committee and adopting the definition of “disinterested” and “independent” under Pennsylvania law.

Delaware Trials

• BCIM Strategic Value Master Fund, LP v. HFF, Inc. (Del. Ch. 2021) Karen was a member of the trial team in a virtual appraisal trial in 2021 concerning the fair value of HFF, Inc. which was acquired by JLL. The Court of Chancery found that the fair value of HFF at closing was $46.59 per share, which was less than 2% more than the deal price at closing and far less than the $56.49 sought by petitioners.  
• Verizon Partners Master Fund Ltd. and Verition Multi-Strategy Master Fund Ltd. v. Aruba Networks, Inc. (Del 2019), Karen conducted the cross-examination of the petitioner’s valuation expert as well as working on other aspects of the appraisal trial. On appeal, the Delaware Supreme Court found that the fair value of Aruba Networks, Inc.—a company that had been acquired by Hewlett-Packard Company for $2.8 billion—was HP’s $19.10 per share valuation of Aruba prior to the deal, which was significantly less than the deal price of $24.67 per share and far less than the $32.57 per share sought by the petitioners.  

Motions To Dismiss Granted By Trial Courts

• In re Micro Focus PLC Securities Litigation (San Mateo Superior Court, CA 2021): The San Mateo County Superior Court sustained a demurrer filed on behalf of Hewlett Packard Enterprise Co, and John Schultz raising a unique defense to putative claims for violations of the federal Securities Act of 1933. The Superior Court agreed that the complaint did not allege that Mr. Schultz did not consent to be named in the Registration Statement as a person to become a director of Micro Focus. Plaintiffs filed a Second Amended Complaint that, among other things, included allegations about consent. After Morgan Lewis filed another demurrer on behalf of Mr. Schultz and HPE raising this issue, plaintiffs requested to voluntarily dismiss their claims against Mr. Schultz and HPE, which the Superior Court ordered.
• In Allegheny County Employees’ Retirement System v. Energy Transfer, L.P., (E.D. Pa. 2021), the district court granted in part the motion to dismiss this putative class action alleging that issues relating to the construction of a pipeline resulted in violations of the federal securities laws. The district court agreed that plaintiffs had failed to plead facts showing that certain challenged statements were actionable or knowingly false when made. The district court also dismissed claims against two individual defendants.
• In Costanzo v. DXC Technology (N.D. Cal. 2020 and 2021), the district court three times granted motions to dismiss a putative class action alleging violations of Sections 11 and 15 of the Securities Act of 1933 arising from the prospectus and registration statement issued in connection with the merger of Computer Sciences Corp. and the Enterprise Services division of HPE to form DXC Technology Co. We represented HPE and four of its officers named as defendants. The district court’s decision held that the allegations of the complaint, even if taken as true for purposes of the motion, did not support the plaintiffs' claim that the registration statement included false or misleading statements, and further found that certain alleged misstatements were forward-looking and protected by the safe harbor provision of the Private Securities Litigation Reform Act of 1995, and that other alleged misstatements were nonactionable puffery or statements of opinion. After giving plaintiffs leave to amend after the first two dismissals, the third ruling was with prejudice.
• In Micro Focus International plc Securities Litigation (S.D.N.Y. 2020), the district court dismissed Securities Act claims against all defendants including John Schultz, who we represent and who served on the board of Micro Focus. These claims arose from a spin off of assets of HPE. The case was appealed; a limited remand has been issued for the district court to rule upon a motion for preliminary approval of a settlement.
• In Kanter v. Reed (Cal. Super. Ct. 2020), the California Superior Court, Los Angeles County sustained a demurrer arguing that a derivative lawsuit arising from the Aliso Canyon gas leak lacked merit because plaintiffs failed to adequately plead demand futility. The court held that plaintiffs did not allege the extreme facts needed to plead demand futility since the Board had established a system to monitor safety, even if the system had not prevented the leak. This case is now on appeal.
• In In re: LendingClub Corp. Derivative Litigation (Del. Ch. 2019) we represented the former CFO in a dismissal of a derivative suit against the directors and officers of LendingClub Corp. based on alleged misrepresentations and omissions that had been the subject of a federal securities lawsuit. Even though the federal lawsuit had survived a motion to dismiss, the Court concluded that demand futility had not been pled because the complaint failed to plead facts showing that the board acted in "bad faith" or was likely liable for claims or incapable of evaluating claims against the CFO.
• In McElrath v. Kalanick (Del. Ch. 2019), we prevailed on behalf of our client, the former GC of Uber Technologies, in a derivative action alleging breach of fiduciary duty and corporate waste arising from Uber’s acquisition of startup Ottomotto LLC. The Court of Chancery of the State of Delaware dismissed the suit on demand futility grounds, and the plaintiff has appealed that ruling to the Delaware Supreme Court and omitted our client as a party against whom an appeal was taken.
• In Doshi v. General Cable Corporation et al. (E. D. Ky 2019), the district court dismissed with prejudice a securities class action arising out of a 2016 non-prosecution agreement between the client and the DOJ for another matter. This is the second time we have obtained the dismissal of a securities class action against this client.
• In Antczak v. TD Ameritrade Clearing, Inc. et al. (E.D. Pa. 2018), the district court dismissed as precluded by the Securities Litigation Uniform Standards Act a putative class action alleging violations of the federal securities laws and state laws arising from losses an investor suffered when her financial advisor made investment decisions based on the advice of a registered independent investment advisor, not any TD Ameritrade Defendant.
• In Plumley v. Sempra Energy (S.D. Cal. 2017), the district court dismissed putative class action claims alleging violations of the federal securities laws arising from the natural gas leak at the Alison Canyon natural gas facility. The court examined both pre-leak and post-leak statements and found that plaintiff failed to plead facts showing that the challenged statements were false or that defendants acted with scienter. The court allowed plaintiff 21 days in which to file an amended complaint addressing the deficiencies that it identified.
• In Fischman v. Reed, (S.D. Cal 2017), the district court dismissed for failure to show demand futility the derivative claims filed by plaintiff, purporting to sue on behalf of Sempra and SoCal Gas, who alleged failure of oversight by the companies’ officers and directors to prevent the natural gas leak at the Aliso Canyon natural gas facility. The court required that plaintiff filed a motion for leave before filing any amended complaint.
• In Hussey v. Ruckus Wireless, Inc. (N.D. Cal. 2017), the district court granted with prejudice a motion to dismiss Section 14 claims finding that plaintiff had abandoned its Section 14(d)(7) claims and failed to state a Section 14(e) claim because scienter is required and was not pled, nor was falsity adequately pled. Media coverage of this decision is linked to this bio.
• In BioClinica (Del. Ch. 2013), the court denied a motion for expedited discovery in a challenge to a merger and ultimately granted the motion to dismiss.
• In Cockle v. Coustas (Marshall Islands 2013), the High Court of the Republic of the Marshall Islands granted the motion to dismiss the derivative suit based on claims relating to payment of management fees and terms of a private financing.
• In Zucker v. Andreessen (Del. Ch. 2012), the Delaware Court of Chancery granted the motion to dismiss derivative claims, based on the severance package awarded to the company’s former CEO.
• In Saginaw Police & Fire Pension Fund v. Hewlett-Packard Company (N.D. Cal. 2012), the district court granted the motion to dismiss derivative claims based on the board’s alleged failure to prevent FCA and FCPA violations. Plaintiff appealed to the Ninth Circuit but dismissed its appeal days before oral argument was scheduled.
• In Gammel v. Hewlett-Packard Company (C.D. Cal. 2012), the district court granted the motion to dismiss a putative securities fraud class action based on the company’s announcement that it was discontinuing development of an operating system and associated products. In 2013, the district court granted in part the motion to dismiss a further amended complaint, cutting the putative class period to a few weeks running from June to August 2011. The case later settled.
• In Egan v. TradingScreen, Inc. (S.D.N.Y. 2011), the district court dismissed federal securities claims challenging management of a private company.
• In Solomon-Shrawder v. CardioNet, Inc. (E.D. Pa. 2010), the district court granted the motion to dismiss a putative class action alleging violations of the federal securities laws based on the company’s alleged response to an analyst report.
• In In re GPC Biotech AG Sec. Litig. (S.D.N.Y. 2009), the district court granted a motion to dismiss a putative class action alleging violations of the federal securities laws based on the FDA’s decision not to approve a NDA.
• In In re NutriSystem, Inc. Sec. Litig. (E.D. Pa. 2009), the district court dismissed a putative class action alleging violations of the federal securities laws based on purportedly false and misleading statements about the company’s financial health in the face of competition from an anti-obesity drug.
• In In re NutriSystem Derivative Litig. (E.D. Pa. 2009), the district court granted the motion to dismiss a derivative suit based on alleged securities law violations.
• In Frohman v. Health Benefits Direct Corp., (N.Y. Sup. Ct. 2009), the New York state court dismissed claims challenging private investments in public companies.

Denial of Injunction

• In Ehrlich v. Arconic Inc. (C.C.P. Phila. Cty. 2017), Karen served as co-counsel and in five days filed a motion to reconsider an order granting sweeping expedited discovery (which was granted), an opposition to an emergency motion for preliminary injunction and preliminary objections to the complaint. After a hearing on the emergency preliminary injunction motion, the court denied the request to issue a preliminary injunction that challenged the board’s actions during a proxy fight. The court found that plaintiff failed to prove either irreparable harm or that greater injury would result from refusing the injunction than granting it.

Other Case-Dispositive Motions Granted by Trial Courts

• In In re YRC Corp. Sec. Litig. (D. Kan. 2016), a putative class action alleging violations of the federal securities laws, the district court denied plaintiffs’ motion for class certification on adequacy grounds, ruling that both the proposed class representative and counsel were not adequate. Plaintiffs voluntarily dismissed the case.
• In Hays v. Dvorak, (Del. Ch. 2015), the Delaware Chancery Court granted a motion to stay a derivative case because the derivative suit relied on an adverse ruling in a patent trial, which ruling was on appeal. After the Federal Circuit vacated the bulk of the damages awarded in the patent trial, the Chancery Court approved the parties’ stipulation dismissing the case without prejudice.