Roth v. Deutsche Telekom AG

Background

Plaintiff Andrew E. Roth, nominal defendant T-Mobile US, Inc., and defendants Deutsche Telekom AG and Deutsche Telekom Holding B.V. jointly requested a stay of the action. The parties agreed that the defendants would accept service of the summons and complaint effective as of the date of the joint letter motion.

The complaint is based on the theory that stock sales by statutory insiders can be matched with an issuer’s repurchase of its own stock under Section 16(b) of the Securities Exchange Act of 1934. The parties identified two related appeals pending in the Second Circuit: the appeal in a prior related proceeding, No. 24-2464, and the appeal in another related proceeding, No. 24-2761. According to the joint letter, the appeals raise whether an issuer’s share repurchases can be attributed to its controlling stockholders for Section 16(b) purposes and whether a controlling stockholder has an indirect financial interest in the issuer’s repurchases under Securities and Exchange Commission Rule 16a-1(a)(2).

Oral argument in both appeals occurred on March 6, 2025, and the Second Circuit had taken the matters under advisement. The parties asked to stay this action until the appeals were finally resolved, including any appeal of the Second Circuit’s decisions to the Supreme Court. They stated that the stay would conserve judicial resources, would not prejudice any party or nonparty, and would not interfere with existing court deadlines.

Ruling

Judge John G. Koeltl granted the joint request for a stay. During the stay, the defendants were not required to answer, move to dismiss, or otherwise respond to the complaint. The parties proposed submitting a schedule for those responses within 30 days after the later final disposition of the two appeals.