Deborah Birnbach, a partner in Goodwin Procter’s Litigation Group, concentrates in the areas of securities litigation, including class action defense; SEC, regulatory and internal investigations; ERISA litigation; stockholder disputes; fiduciary duty claims; founder and partnership disputes; and private equity litigation surrounding private financings. She also represents clients in M&A-related litigation, unfair competition disputes, license agreement disputes and privacy and data security litigation.
WORK FOR CLIENTS
Ms. Birnbach’s clients include public and private financial services companies, technology companies, healthcare and life science companies, their boards and officers, and private equity firms and their partners. As one of the founding partners of the firm’s Privacy & Data Security Practice, she also counsels clients in privacy and data security regulation and compliance, including electronic intrusions and/or data security breaches, data privacy and data security policies governing personal information, investigations by regulators and litigation relating to privacy and data security. In addition to engaging in active litigation for clients, Ms. Birnbach also counsels clients and their boards in managing and avoiding litigation risk, including through arbitration, mediation and other alternative dispute resolution methods.
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 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. Her securities and shareholder litigation practice is national in scope, representing investment managers, issuers and their directors and officers in securities and corporate governance matters across the country. Ms. Birnbach has also represented numerous 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. Recent matters for institutional asset management clients and other fiduciaries have been related to subprime events and the credit market dislocation.
Recent representative matters include:
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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. The Appeals Court also affirmed dismissal of aiding and abetting claims against the entity defendants.
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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 Act of 1934, and sought damages for a class period of over two years.
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NeuroMetrix, Inc. Securities Class Action Litigation (2011): Won affirmance by the United States Court of Appeals for the 1st 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 Act of 1934. The United States District Court for the District of Massachusetts granted our motion to dismiss the case in its entirety and with prejudice. We also achieved a favorable settlement of a related shareholder derivative action that involved no payment of money by our client.
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Phase Forward Incorporated Class Action Merger Litigation (2010): Won complete dismissal of a putative class action alleging breaches of fiduciary duty in connection with the acquisition of Phase Forward by Oracle Corporation. Defeated plaintiffs’ preliminary injunction motion seeking to enjoin the transaction in Massachusetts Superior Court, clearing the way for the transaction to close.
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J.L. Hammett Derivative Litigation (2010): Won summary judgment for defendants in Massachusetts Superior Court on breach of fiduciary duty claims concerning alleged excessive compensation in connection with sale transaction.
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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.
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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 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.
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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.
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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.
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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.
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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.
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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.
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Lycos, Inc. Securities Litigation (2003): Very favorably settled this securities class action litigation against web portal Lycos, Inc. (which arose out of Lycos’ announcement of a proposed multibillion-dollar merger with USA Networks) for a tiny fraction of the potential damages had plaintiffs prevailed on their claims. The settlement was funded entirely by insurance.
PROFESSIONAL ACTIVITIES
Ms. Birnbach 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 United States Bankruptcy Court in the District of Massachusetts.
MEDIA
Ms. Birnbach is the author of a chapter in The Law of Investment Management (Oxford University Press 2009). She has published numerous articles, a chapter in the book Data Security and Privacy Law, Combating Cyberthreats (West Group) and serves as a faculty member on continuing legal education programs.
BAR AND COURT ADMISSIONS
Ms. Birnbach is admitted to practice in New York; Massachusetts; U.S. District Court, Southern and Eastern Districts of New York; U.S. District Court, District of Massachusetts; U.S. District Court, District of Colorado; and U.S. Court of Appeals for the First and Ninth Circuits.
RECOGNITION
Ms. Birnbach was recognized in 2009 by Boston magazine as one of the Top 50 Women Lawyers in Massachusetts, and for eight consecutive years has been selected a “Massachusetts Super Lawyer” in Securities Litigation by the same publication.