Less than a week after Alphabet Securities, Google’s holding company, asked to stay the Ninth Circuit’s mandate redirecting a fraud case to the trial court for discovery, the appellate tribunal granted its request to pause the proceedings.
The case concerns whether Alphabet Inc. should have disclosed an already-remediated security vulnerability in official filings. The judges who authored the June opinion in favor of plaintiff Rhode Island granted Alphabet Inc.’s request last Friday, giving the tech giant until October 28 to file its petition for a writ of certiorari, noting that denial thereof would instantly lift the stay.
Specifically, the defendant is appealing the ruling that it improperly failed to disclose information about a Google+ software bug in two 2018 Securities and Exchange Commission filings. Last week, Alphabet argued that the case poses important questions of law and has substantial implications for every publicly traded company. In addition, it argued that litigating without first knowing the outcome of its certiorari petition might cause it to incur needless expense.
Rhode Island opposed, contending that a petition for certiorari would be both frivolous and simply another delay tactic. The state asserted that the petition reaches only one of the plaintiff’s three securities fraud claims, and that the lone claim it addresses relies on “rank revisionism” with the “same telling hyperbole.” The mischaracterization of the Ninth Circuit’s holdings is unfair, as the Ninth Circuit decision followed binding precedent and established no new rules, the appellant argued.
The panel’s half-page ruling staying the mandate did not offer reasoning behind its decision. “Should the Supreme Court grant certiorari, the mandate will be stayed pending its disposition of the case,” the order said.