Laura Hughes McNally

In federal court, Laura has argued multiple motions to dismiss putative class actions alleging violations of the federal securities laws. These dismissals were upheld on appeal and involved issues of first impression. In the Delaware Court of Chancery, Laura recently argued a motion to dismiss a derivative suit against a multinational corporation and certain of its current and former officers and directors, which opinion was affirmed by the Delaware Supreme Court. On the appellate level, Laura has argued cases before both federal and state courts of appeal and in the Delaware Supreme Court.

Laura has trial experience in both federal court and the Delaware Court of Chancery. Most recently, she was one of the lead trial attorneys in a Delaware Chancery Court appraisal trial and conducted direct and cross-examinations of expert and key fact witnesses (including the CEO of an international publicly traded company). Previously, Laura was a key leader of the Morgan Lewis team in another appraisal case in the Delaware Court of Chancery as well as in a federal jury trial.

Laura has also represented companies, executives, and related individuals in SEC investigations into insider trading, conflicts of interest, and accounting issues.

Laura has a master’s degree in economics with a specialization in law and finance. She uses her economics background to analyze damages and causation issues and works closely with economic experts.

Laura dedicates significant time to her pro bono work, focusing on prisoner civil rights cases in conjunction with the US District Court for the Eastern District of Pennsylvania’s Prisoner Civil Rights Panel. She has secured favorable summary judgment decisions in multiple cases. She also dedicates time to representing asylum seekers. Laura is also an advocate for and mentor to working parents.

Prior to joining Morgan Lewis, Laura worked at the SEC Division of Enforcement.

Results may vary depending on your particular facts and legal circumstances.

Appellate Victories

• Pi Data v. HPE (5th Cir.): Argued for the affirmance of a dismissal with prejudice of a $50M claim for breach of fiduciary duty, negligence and negligent misrepresentation brought by a downstream partner of HPE’s Indian subsidiary in connection with HPE’s alleged failure to investigate the plaintiff’s claims against a different downstream partner. The Fifth Circuit affirmed the decision of Judge Lee Rosenthal of the US District Court for the Southern District of Texas, rejecting the plaintiff’s novel theory that HPE as the parent-entity owed it a duty to investigate and take action in a third-party dispute involving neither HPE nor HPE India
• Brown v. Building Engines (2d. Cir.): Secured the Second Circuit’a affirmance of the district court’s order granting our motion to dismiss an earnout dispute based on the plain language of a merger agreement between the plaintiff-appellant’s company, LogCheck, and Building Engines.
• Jones Lang LaSalle, Inc. v. 1441L (D.C. Cir.). United States Court of Appeals for the District of Columbia Circuit vacated the district court’s grant of summary judgment to 1441 L. The district court had found that JLL failed to meet the disclosure requirements for dual representation when it represented both parties to lease a property in Washington, D.C. In reaching this conclusion, the district court found that the D.C. Brokerage Act set forth strict requirements for the format of the necessary disclosure for dual representation. The circuit court agreed with our argument that the D.C. Brokerage Act’s formatting specifications go to whether the broker can gain a presumption of written consent; but that “even without the benefit of that presumption, a broker can still demonstrate that it obtained the requisite written consent.”
• In re Zimmer Biomet Holdings Inc. Derivative Litigation (Del.): Argued before Delaware Supreme Court and Chancery Court the motion to dismiss derivative claims against Zimmer Biomet Holdings, Inc. and certain current and former officers and directors; Supreme Court affirmed Chancery Court opinion that: accepted 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 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 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.
• Cochran v. Penn Mut. Life Ins. (11th Cir.): Argued motion to dismiss class action allegations against The Penn Mutual Life Insurance Co. and its brokerage subsidiary, Hornor, Townsend & Kent LLC (HTK) before the district court (N.D. Ga. 2020) and before the 11th Circuit; the complaint challenged as an alleged breach of fiduciary duty HTK’s marketing of tax-deferred annuities issued by Penn Mutual; the Eleventh Circuit affirmed the district court’s dismissal the district court accepted our argument that these class claims were precluded by the Securities Litigation Uniform Standards Act; the Eleventh Circuit stated that the complaint should be evaluated based on its “gravamen” or “essence,” not the words it used and noted that plaintiff did not challenge the district court ruling granting our motion to compel arbitration before the Financial Industry Regulatory Authority on the plaintiff’s individual claims
• Rite Aid Headquarters Corporation v. Brines Refrigeration Heating & Cooling (Pa. Super. 2022) Argued appeal of denial of motion to stay case suing contractor for failure to pay sales tax; court agreed that trial court correctly found that case did not have to be stayed to await ruling from Pennsylvania tax authorities
• Spirrizzi v. Zyla Life Sciences (3d Cir.): The US Court of Appeals for the Third Circuit affirmed the district court’s grant of a motion to dismiss that Laura argued, urging dismissal of a putative class action alleging violations of the federal securities laws for failure to predict how the US Food and Drug Administration (FDA) would act in approving a drug, In re Egalet Corp. Sec. Litig. in a sweeping 58-page opinion, the district court agreed with arguments in the brief, of which Laura was a key drafter, and 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
• Retail Wholesale & Dep’t Store Union Local 338 Ret. Fund v. Hewlett-Packard Co. (9th Cir.): The US Court of Appeals for the Ninth Circuit affirmed the district court’s grant of a motion to dismiss that Laura argued, urging dismissal of securities fraud claims based on the company’s ethics code and statements relating to it; the Ninth Circuit ruled 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”; Laura was also a key drafter of the underlying briefing
• Doshi & City of Livonia Emps. Ret. Sys. v. General Cable Corp. (6th Cir.): The US Court of Appeals for the Sixth Circuit affirmed the district court’s dismissal of a putative class action alleging violations of the federal securities laws based on two restatements, finding that the plaintiff had not adequately pled scienter

Motions to Dismiss Granted by Trial Courts

• In Leonard Goldschmidt, Individually and on Behalf of All Similarly Situated Individuals v. John Poyhonen, et al., (Del. Ch.) Obtained dismissal of all claims against the financial advisor to a company engaged in a public sales process that was alleged to have aided and abetted certain of the selling company’s directors and officers breach of fiduciary duties. Following oral argument conducted by Laura, the Vice Chancellor ruled from the bench, adopting our arguments and dismissing the complaint.In re Micro Focus PLC Securities Litigation (San Mateo Superior Court, CA): 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
• Allegheny Cnty. Emps.’ Ret. Sys. v. Energy Transfer, L.P. (E.D. Pa.): Argued the motion to dismiss this putative class action that was granted in part; the plaintiffs contended that issues relating to the construction of a pipeline resulted in violations of the federal securities laws; the district court agreed that the plaintiffs had failed to plead facts showing that certain challenged statements were actionable or knowingly false when made, and also dismissed claims against two individual defendants Costanzo v. DXC Tech. (N.D. Cal.): 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, including former CEO Meg Whitman; 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
• Antczak v. TD Ameritrade Clearing, Inc. et al. (E.D. Pa.): The district court dismissed 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
• Plumley v. Sempra Energy (S.D. Cal.): The district court dismissed putative class action claims alleging violations of the federal securities laws arising from the natural gas leak at the Aliso Canyon natural gas facility; the court examined both pre-leak and post-leak statements and found that the plaintiff failed to plead facts showing that the challenged statements were false or that the defendants acted with scienter; the court allowed the plaintiff 21 days to file an amended complaint addressing the deficiencies that it identified
• Fischman v. Reed (S.D. Cal): The district court dismissed for failure to show demand futility the derivative claims filed by the 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 the plaintiff file a motion for leave before filing any amended complaint
• Cockle v. Coustas (Marshall Islands): The High Court of the Republic of the Marshall Islands granted our motion to dismiss the derivative suit against a Greek shipping company, based on claims relating to payment of management fees and terms of a private financing
• Zucker v. Andreessen (Del. Ch.): The Delaware Court of Chancery granted our motion to dismiss derivative claims, based on the severance package awarded to HP’s former CEO
• Saginaw Police & Fire Pension Fund v. Hewlett-Packard Co. (N.D. Cal.): The district court granted our motion to dismiss derivative claims, based on the board’s alleged failure to prevent False Claims Act (FCA) and Foreign Corrupt Practices Act (FCPA) violations; the plaintiff appealed to the Ninth Circuit but dismissed its appeal days before oral argument was scheduled
• Gammel v. Hewlett-Packard Co. (C.D. Cal.): The district court granted our motion to dismiss this putative securities fraud class action based on HP's announcement that it was discontinuing webOS development; in 2013, the district court granted in part our motion to dismiss a further amended complaint, cutting the putative class period to a few weeks running from June to August 2011

Denial of Injunction

• Ehrlich v. Arconic Inc. (C.C.P. Phila. Cty.): 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 and found that the plaintiff failed to prove either irreparable harm or that greater injury would result from refusing the injunction than granting it; preliminary objections are pending

Recent Motion to Compel Arbitration

• Estate of Sharon Groth v. E*TRADE Sec. LLC, et al. (M.D. Pa.): Moved to compel to arbitration an individual action alleging federal securities violations

Trials

• Deane v. Maginn (Del. Ch.): Conducted cross examination of valuation expert in defense of breach of fiduciary duty claim against individual who allegedly misappropriated opportunity to invest in warrant for technology company
• BCIM Strategic Value Master Fund, LP v. HFF, Inc. (Del. Ch.): Lead trial counsel in a virtual appraisal trial in 2021 concerning the fair value of HFF, Inc.; conducted the cross-examination of the opposing side’s valuation witness as well as direct examinations of numerous fact witnesses, including the CEO of the acquiring company; 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): Conducted the direct examination of the industry expert in an appraisal case; 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
• Hyman v. City of Philadelphia, et al. (E.D. Pa.): Led the trial team in a multiday prisoner civil rights federal jury trial, conducted direct and cross-examinations of expert and fact witnesses, argued evidentiary motions, and delivered the closing argument, securing favorable jury victory