del1In a January 22, 2016 Delaware Court of Chancery decision that likely will prove to be significant because of the light it sheds on the future of disclosure-only settlements in merger objection lawsuits in Delaware, Chancellor Andre Bouchard rejected the proposed settlement in the litigation arising out of Zillow’s acquisition of Trulia, saying that because the “none of the supplemental disclosures were material or even helpful to Trulia’s stockholder,” the proposed settlement “does not afford them meaningful consideration to warrant providing a claim release.”

 

In reaching these conclusions, Bouchard reviewed the dynamics that have led to the “proliferation of disclosure settlements” and the problems these kinds of settlements present. Bouchard also offered his perspective on the ways that remedial disclosure assertions in deal litigation could optimally be litigated. At a minimum, Bouchard’s opinion represents a warning to the plaintiffs’ bar that to the extent they continue to pursue disclosure settlements, they can “expect that the Court will be increasingly vigilant in scrutinizing the ‘give’ and the ‘get’ of such settlements to ensure that they are genuinely fair and reasonable to the absent class members.” Chancellor Bouchard’s January 22, 2016 opinion in the Trulia case can be found here. Continue Reading Delaware Chancellor Rejects Disclosure-Only Settlement, Signals What’s Next for Merger Objection Suits

soccerLong-time readers know that I am a huge fan of European soccer. When I have the time, there is just about nothing else that I would rather do than watch a match in one of the top leagues. Part of the reason I enjoy it so much is that the games just flow. The clock starts and play continues, without timeouts or interruptions. Quite a contrast to American football, in which eleven minutes of action are crammed into three hours of watch time. I also like the European clubs’ rivalries, their fans’ enthusiasm, and the sudden bursts of sheer athletic brilliance that frequently result in goals.

 

And I also like the players’ names. I know that the players are not chosen for their names, but for some reason the game attracts so many players with names that are distinctive, musical, or audacious. It starts with players like Robert Snodgrass, the Scot who now plays for Hull City in the English Championship League, and Lee Cattermole, who plays for Sunderland in the Premier League. These players’ are among those whose names I find that I can’t hear without involuntarily repeating them. Here’s what I sound like watching either of these player’s teams play: “Snodgrass!” “Cattermole!” Continue Reading The Game of Names

supremesAfter the Supreme Court issued its decision last week in Campbell-Ewald Co. v. Gomez (here), in at least some quarters the story about the decision spread under the heading that the Court had issued an important Telephone Consumer Protection Act ruling. The case in which the Court issued its decision does indeed involve a TCPA damages claim. However, the Court’s analysis did not address the plaintiff’s TCPA claim as such. The Court’s ruling – which addressed the issue of whether or not an unaccepted offer of judgment moots a class action plaintiff’s claim – is nevertheless important.

 

As discussed below, the Court’s ruling in the Campbell-Ewald case sets the stage for further litigation on the question of whether, by taking a different approach than the defendant did here, class action defendants might yet be able to moot a class action suit by “picking off” the named plaintiff’s claim. The Court’s decision in the Campbell-Ewald case may also prefigure the Court’s consideration of standing issues in the Spokeo case, another case that raises basic justiciability issues and that remains pending on the Court’s docket for this term.   Continue Reading Why the Supreme Court’s Recent Class Action Decision is Important and What May Be Coming Next

cornerstone reserach pdfNot only were securities class action lawsuit filings in 2015 at their highest levels since 2008, but the likelihood that a U.S.-listed company would get hit with a securities suit was at the highest level at any time since the PSLRA was enacted, according to the latest annual report from Cornerstone Research. Cornerstone Research’s report, issued in conjunction with the Stanford Law School Securities Class Action Clearinghouse and entitled “Securities Class Action Filings: 2015 Year in Review,” can be found here. Cornerstone Research’s January 26, 2016 press release about the report can be found here. My own analysis of the 2015 securities class action lawsuit filings can be found here. Continue Reading Cornerstone Research: U.S.-Listed Companies’ Securities Suit Susceptibility at Record High Levels in 2015

NERA1Securities class action lawsuit filings in 2015 were at their highest level since 2008, according to the latest annual report from NERA Economic Consulting. The report also states that not only as the number of lawsuits filed increased in 2015, but the rate of lawsuit filings relative to the number of publicly traded companies has also increased compared to historic levels as well. The report entitled “Recent Trends in Securities Class Action Litigation: 2015 Full-Year Review,” can be found here. NERA’s January 25, 2016 press release describing the report can be found here. My own analysis of the 2015 securities class action filings can be found here.  Continue Reading NERA Report: 2015 Securities Class Action Filings at Highest Level Since 2008

gavelnewSince merger objection litigation became one of the most distinctive phenomena on the corporate and securities landscape, it has been both chronicled and measured in a series of annual papers by Matthew Cain, now an SEC economist, and Steven Davidoff Solomon, a law professor at the U.C. Berkeley. In their latest update, “Takeover Litigation in 2015” (here), published last week, the authors confirm that while merger objection litigation continued to be filed at significant levels last year, the litigation levels declined compared to recent years. Of particular note, starting in the Fall 2015, after Delaware Vice Chancellor Laster rejected the disclosure only settlement in the Aruba/H-P merger lawsuit, the filings of the merger objection lawsuits showed a decline that was “sharp and significant” and that the authors expect will continue in the new year. Continue Reading Big Changes in the Merger Objection Litigation Marketplace

plusOn Thursday, January 21, 2016, I will be participating as the speaker in a Professional Liability Underwriting Society (PLUS) webinar to discuss this past year’s top stories in the world of directors and officers’ liability and insurance. The webinar will be based on my recent blog post, The Top Ten D&O Stories of 2015. This webinar, which is free for both PLUS members and non-members,  is a lead-in for the 2016 PLUS D&O Symposium, to be held February 3-4, 2016, in New York. The webinar will begin at 11 am EST and last one hour. Information about the webinar, including registration instructions, can be found here. Continue Reading PLUS Webinar This Thursday: “The Top Ten D&O Stories of 2015”

merckIn my recent review of the past year’s top D&O stories, I noted the current trend toward increased numbers of securities class action lawsuits involving smaller companies, and also towards smaller securities suit settlements. In the midst of this era of generally smaller cases and settlements has now come a huge settlement reminiscent of earlier time – perhaps because it involves a lawsuit that is itself a vestige of another era. On January 15, 2016, Merck announced that it had reached an $830 million settlement of the long-running Vioxx-related securities class action lawsuit. This case, whose extended procedural history included a trip all the way to the U.S. Supreme Court to address statute of limitations issues, has been pending since November 2003. The proposed settlement is subject to court approval. Merck’s January 15, 2016 press release about the settlement can be found here. Continue Reading Merck Agrees to Settle Long-Running Vioxx-Related Securities Class Action Lawsuit for $830 Million

oregonsealAs readers of this blog will recall, Delaware’s courts have held that under Delaware law bylaws designating Delaware’s courts as the exclusive forum for corporate and shareholder disputes are facially valid. Last summer, Delaware’s legislature adopted a statutory provision adding the permissibility of forum selection bylaws to the Delaware Corporations Code. In response to these judicial and legislative developments, many Delaware corporations have adopted forum selection bylaws. But whether these new bylaw provisions will have their intended effects will depend in part on what the courts in other jurisdictions do. If an action in another jurisdiction is permitted to go forward notwithstanding the bylaw specifying Delaware’s courts as the designated forum, the bylaw’s purpose would be frustrated. A recent decision from the Oregon’s highest court suggests that this potentially frustrating outcome is less likely. Continue Reading Oregon Supreme Court Holds Delaware Corporation’s Forum Selection Bylaw Valid and Enforceable

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John Reed Stark
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David Fontaine

In this day and age, the members of the boards of directors of most companies understand that cybersecurity issues are both important and should be a board-level priority. But while these issues and responsibilities are now well-recognized, many boards still struggle to translate these issues into action. In the following guest post from John Reed Stark, President, John Reed Stark Consulting LLC, and David R. Fontaine, President, Corporate Risk Holdings[1] take a look at these challenges and propose that in addressing their cybersecurity-related responsibilities boards should draw upon the same governance procedures they have longed used for with respect to financial accounting and reporting. The authors suggest well-advised boards will take this approach in light of the very real, difficult to control and ever increasing enterprise threat that cyber-attack represent for their organizations. Continue Reading Guest Post: Boards of Directors and Cybersecurity: Applying Lessons Learned From 70 Years of Financial Reporting Oversight