In the case of Emulex Corp. v. Varjabedian, the U.S Supreme Court was asked to determine whether a claim under Section 14(e) of the Securities Exchange Act requires proof of scienter or if negligence is sufficient for liability. The Ninth Circuit had ruled that mere negligence was enough, creating a split among federal appeals courts on this issue as other circuits required proof of intent (scienter). However, in April 2019, the Supreme Court dismissed its grant of certiorari as "improvidently granted". This meant they decided not to hear arguments and make a decision on this particular point after all. As such, no definitive ruling was made by the Supreme Court regarding whether claims under Section 14(e) require proof of scienter or if negligence suffices.

The dissenting opinion in the case of Emulex Corp. v. Varjabedian argued that the Ninth Circuit Court had erred in its interpretation of Section 14(e) of the Securities Exchange Act, which prohibits fraudulent, deceptive or manipulative acts in connection with any tender offer. The dissenters believed that this section requires proof of scienter - a wrongful state of mind - rather than mere negligence as determined by the lower court. They contended that every other circuit to consider this issue has required proof of scienter and thus, it was inappropriate for the Supreme Court to decline review on such an important question affecting securities law and corporate transactions nationwide.