ANDREW ROTH V. FORIS VENTURES, LLC, ET AL, No. 22-16632 (9th Cir. 2023)
Annotate this Case
Amyris is a publicly traded biotechnology company that operates out of California. John Doerr is a member of the Amyris board of directors. Doerr and his wife, Ann Doerr, are also trustees of Vallejo Ventures Trust (Vallejo), which is a member of Foris Ventures, LLC (Foris). Doerr indirectly owns all membership interests in Foris. Foris and Amyris entered into several transactions involving Amyris stock, warrants, and debt between April 2019 and January 2020. The Amyris board of directors approved each of those transactions. The following year, Andrew Roth, an Amyris shareholder, filed a derivative lawsuit on behalf of Amyris against the Doerrs, Foris, and Vallejo, alleging that those transactions violated Section 16(b) and seeking disgorgement of profits. Defendants moved to dismiss. The district court denied the motion. The district court subsequently granted a certificate of interlocutory appealability on the sole issue of whether Rule 16b-3 requires a board of directors to explicitly approve transactions for the purpose of exempting them under the Rule.
The NInth Circuit affirmed in part and reversed in part the district court’s order denying defendants’ motion to dismiss. The panel held that the district court erred by imposing a purpose-specific approval requirement. However, the district court did not err in finding that the Amyris board was aware that defendant John Doerr had an indirect pecuniary interest in the challenged transactions when it approved them. The panel left it for the district court on remand to address whether defendant Foris Ventures, LLC, a beneficial owner of Amyris, was a director by deputation and thus eligible for the Rule 16b-3(d)(1) exemption.
Court Description: Securities Law The panel affirmed in part and reversed in part the district court’s order denying defendants’ motion to dismiss a derivative action brought by a shareholder of Amyris, Inc., under § 16(b) of the Securities Exchange Act of 1934, which imposes liability for sales and purchases of securities between an issuer of securities and a beneficial owner, director, or officer of that issuer that occur within six months of each other and realize a profit.
Securities and Exchange Rule 16b-3(d)(1) exempts from liability under § 16(b) transactions between an issuer and a director where the issuer’s board approves the transaction. Agreeing with the Second Circuit, the panel held that Rule 16b-3(d)(1) does not require the board of directors to approve a transaction for the specific purpose of exempting it from liability.
The panel held that the district court erred by imposing a purpose-specific approval requirement. However, the district court did not err in finding that the Amyris board was aware that defendant John Doerr had an indirect pecuniary interest in the challenged transactions when it approved them. The panel left it for the district court on remand to address whether defendant Foris Ventures, LLC, a beneficial owner of Amyris, was a director by deputation and thus eligible for the Rule 16b-3(d)(1) exemption.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.