Calif. Judge Rules Cyan Loophole 'Not Illegal' Under State Law

Law360 (September 4, 2020, 6:29 PM EDT) -- A California state judge has ruled that under her state's law, it is not illegal for corporations to use a provision in their governing documents to sidestep a U.S. Supreme Court decision that allows certain securities claims to play out in state court.

Judge Marie Weiner in a Sept. 1 ruling declined jurisdiction over securities claims against Restoration Robotics Inc. after finding the medical technology company's use of a so-called federal forum provision, which bars investors from taking claims under the Securities Act of 1933 to state court, hasn't been shown to be "unjust or unreasonable."

The judge acknowledged that such...

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