Research Handbook on Representative Shareholder Litigation

553 Pages·2018·6.277 MB·English

by  Sean Griffith, Jessica Erickson, David H Webber, Verity Winship

RESEARCH HANDBOOK ON REPRESENTATIVE
SHAREHOLDER LITIGATION
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RESEARCH HANDBOOKS IN CORPORATE LAW AND GOVERNANCE
Series Editor: Randall S. Thomas, John S. Beasley II Professor of Law and Business, Vanderbilt
University Law School, USA
Elgar Research Handbooks are original reference works designed to provide a broad overview
of research in a given field while at the same time creating a forum for more challenging,
critical examination of complex and often under-explored issues within that field. Chapters by
international teams of contributors are specially commissioned by editors who carefully balance
breadth and depth. Often widely cited, individual chapters present expert scholarly analysis and
offer a vital reference point for advanced research. Taken as a whole they achieve a wide-ranging
picture of the state-of-the-art.
Making a major scholarly contribution to the field of corporate law and governance, the
volumes in this series explore topics of current concern from a range of jurisdictions and
perspectives, offering a comprehensive analysis that will inform researchers, practitioners and
students alike. The Research Handbooks cover the fundamental aspects of corporate law, such as
insolvency governance structures, as well as hot button areas such as executive compensation,
insider trading, and directors’ duties. The Handbooks, each edited by leading scholars in
their respective fields, offer far-reaching examinations of current issues in corporate law and
governance that are unrivalled in their blend of critical, substantive analysis, and in their synthesis
of contemporary research.
Each Handbook stands alone as an invaluable source of reference for all scholars of corporate
law, as well as for practicing lawyers who wish to engage with the discussion of ideas within the
field. Whether used as an information resource on key topics or as a platform for advanced study,
volumes in this series will become definitive scholarly reference works in the field.
Titles in this series include:
Research Handbook on Shareholder Power
Edited by Jennifer G. Hill and Randall S. Thomas
Research Handbook on Partnerships, LLCs and Alternative Forms of Business Organizations
Edited by Robert W. Hillman and Mark J. Loewenstein
Research Handbook on Mergers and Acquisitions
Edited by Claire A. Hill and Steven Davidoff Solomon
Research Handbook on the History of Corporate and Company Law
Edited by Harwell Wells
Research Handbook on Corporate Crime and Financial Misdealing
Edited by Jennifer Arlen
Research Handbook on Fiduciary Law
Edited by Gordon Smith and Andrew Gold
Research Handbook on the Regulation of Mutual Funds
Edited by William A. Birdthistle and John Morley
Research Handbook on Representative Shareholder Litigation
Edited by Sean Griffith, Jessica Erickson, David H. Webber and Verity Winship
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Research Handbook on
Representative Shareholder
Litigation
Edited by
Sean Griffith
T.J. Maloney Chair and Professor of Law, Fordham University School of
Law, USA
Jessica Erickson
Professor of Law and Associate Dean for Faculty Development, University
of Richmond School of Law, USA
David H. Webber
Professor of Law, Boston University School of Law, USA
Verity Winship
Professor of Law, University of Illinois College of Law, USA
RESEARCH HANDBOOKS IN CORPORATE LAW AND GOVERNANCE
Cheltenham, UK • Northampton, MA, USA
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© The Editors and Contributing Authors Severally 2018
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or
transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or
otherwise without the prior permission of the publisher.
Published by
Edward Elgar Publishing Limited
The Lypiatts
15 Lansdown Road
Cheltenham
Glos GL50 2JA
UK
Edward Elgar Publishing, Inc.
William Pratt House
9 Dewey Court
Northampton
Massachusetts 01060
USA
A catalogue record for this book
is available from the British Library
Library of Congress Control Number: 2018945844
This book is available electronically in the
Law subject collection
DOI 10.4337/9781786435347
ISBN 978 1 78643 533 0 (cased)
ISBN 978 1 78643 534 7 (eBook)
Typeset by Servis Filmsetting Ltd, Stockport, Cheshire
2
0
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Contents
List of contributors viii
Introduction 1
PART I SECURITIES CLASS ACTIONS
1 The development of securities litigation as a lawmaking partnership 12
Jill E. Fisch
2 Securities class actions and severe frauds 29
James J. Park
3 The shifting raison d’être of the Rule 10b-5 private right of action 39
Amanda Marie Rose
PART II SHAREHOLDER DERIVATIVE SUITS
4 The (un)changing derivative suit 58
Jessica Erickson
5 Claim character and class conflict in securities litigation 80
Richard A. Booth
6 Illegality and the business judgment rule 98
Charles R. Korsmo
PART III MERGER LITIGATION
Section A Managing Multijurisdictional Litigation
7 Fighting frivolous litigation in a multijurisdictional world 110
Adam Badawi
8 Addressing the “baseless” shareholder suit: mechanisms and consequences 121
James D. Cox
9 Who collects the deal tax, where, and what Delaware can do about it 140
Sean J. Griffith and Anthony Rickey
10 Forum shopping in the bargain aisle: Wal-Mart and the role of adequacy of
representation in shareholder litigation 156
Lawrence A. Hamermesh and Jacob J. Fedechko
11 Limiting litigation through corporate governance documents 176
Ann M. Lipton
v
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vi Research handbook on representative shareholder litigation
Section B Judicial Perspectives on Shareholder Litigation
12 Disclosure settlements in the state courts post-Trulia: practical
considerations 191
James L. Gale
13 Changing attitudes: the stark results of thirty years of evolution in Delaware
M&A litigation 202
J. Travis Laster
14 Appraisal rights in complete tender offers in Israel: a look into Israeli case
law 229
Ruth Ronnen
Section C Appraisal Actions
15 Recent developments in stockholder appraisal 243
Charles R. Korsmo and Minor Myers
16 Appraisal as representative litigation 254
Minor Myers
PART IV LITIGANTS AND LAW FIRMS
Section A Plaintiffs and Law Firms
17 Lead plaintiffs and their lawyers: mission accomplished, or more to be done? 271
Stephen J. Choi and A.C. Pritchard
18 The mimic-the-market method of regulating common fund fee awards: a
status report on securities fraud class actions 287
Charles Silver
19 What do we know about law firm quality in M&A litigation? 304
Steven Davidoff Solomon and Randall S. Thomas
Section B Officers and Directors
20 Jurisdiction over directors and officers in Delaware 316
Eric A. Chiappinelli
21 Stockholder litigation, fiduciary duties, and the officer dilemma 330
Megan Wischmeier Shaner
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Contents vii
PART V COMPARATIVE AND INTERNATIONAL SHAREHOLDER
LITIGATION
Section A The Globalization of Shareholder Litigation
22 The globalization of entrepreneurial litigation: law, culture, and incentives 351
John C. Coffee, Jr.
23 The Teva case: a tale of a race to the bottom in global securities regulation 372
Sharon Hannes and Ehud Kamar
Section B Comparative Shareholder Litigation
24 A transatlantic perspective on shareholder litigation in public takeovers 415
Dan Awrey and Blanaid Clarke
25 Private ordering of shareholder litigation in the EU and the US 439
Matteo Gargantini and Verity Winship
26 Mapping types of shareholder lawsuits across jurisdictions 459
Martin Gelter
27 Securities class actions in Canada: ten years later 482
Poonam Puri
Section C Other Modes of Enforcement
28 CSRC enforcement of securities laws: preliminary empirical findings 513
Chao Xi
Index 529
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Contributors
Dan Awrey is Professor of Financial Regulation and Fellow of Linacre College, University
of Oxford.
Adam Badawi is Professor of Law at UC Berkeley School of Law.
Richard A. Booth is Professor of Law and Martin G. McGuinn Chair in Business Law at
Villanova University Charles Widger School of Law.
Eric A. Chiappinelli is Frank McDonald Endowed Professor of Law at Texas Tech
University School of Law.
Stephen J. Choi is Murray and Kathleen Bring Professor of Law and the Co-Director of
the Pollack Center for Law & Business at New York University School of Law.
Blanaid Clarke holds the McCann FitzGerald Chair in Corporate Law at Trinity College
Dublin.
John C. Coffee, Jr. is Adolf A. Berle Professor of Law and Director of the Center on
Corporate Governance at Columbia Law School.
James D. Cox is Brainerd Currie Professor of Law at Duke Law School.
Jessica Erickson is Professor of Law and Associate Dean for Faculty Development at the
University of Richmond School of Law.
Jacob J. Fedechko is a former law clerk in the Delaware Court of Chancery and is now a
litigation associate in Wilmington, Delaware.
Jill E. Fisch is Perry Golkin Professor of Law and Co-Director of the Institute for Law
and Economics at the University of Pennsylvania Law School.
James L. Gale is Senior Business Court Judge for Complex Business Cases assigned to
the North Carolina Business Court.
Matteo Gargantini is Assistant to the Commissioner at the Commissione Nazionale per
le Società e la Borsa (“CONSOB”).
Martin Gelter is Professor of Law at Fordham University School of Law.
Sean J. Griffith holds the T.J. Maloney Chair in Business Law and directs the Fordham
Corporate Law Center at Fordham University School of Law.
Lawrence A. Hamermesh is Executive Director, Institute for Law & Economics at the
University of Pennsylvania Law School, as well as Professor Emeritus and the former
Ruby R. Vale Professor of Corporate and Business Law at Widener University Delaware
Law School.
viii
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Contributors ix
Sharon Hannes is Professor of Law and Dean of the Buchmann Faculty of Law at Tel
Aviv University.
Ehud Kamar is Professor of Law at the Buchmann Faculty of Law at Tel Aviv University.
He serves as the Director of the Tel Aviv University Batya and Isachar Fischer Center for
Corporate Governance and Capital Markets Regulation.
Charles R. Korsmo is Professor of Law at Case Western Reserve University School of Law.
J. Travis Laster is Vice Chancellor on the Delaware Court of Chancery.
Ann M. Lipton is Michael Fleishman Associate Professor in Corporate Law &
Entrepreneurship at Tulane University Law School.
Minor Myers is Professor of Law at Brooklyn Law School.
James J. Park is Professor of Law at UCLA School of Law.
A.C. Pritchard is Frances and George Skestos Professor of Law at the University of
Michigan Law School.
Poonam Puri is Professor of Law at Osgoode Hall Law School, York University.
Anthony Rickey is the founder of Margrave Law LLC.
Judge Ruth Ronnen is in the Economic Division of the Tel Aviv District Court.
Amanda Marie Rose is Professor of Law at Vanderbilt Law School and Professor of
Management at the Owen Graduate School of Business, Vanderbilt University.
Megan Wischmeier Shaner is Professor of Law at the University of Oklahoma College
of Law.
Charles Silver holds the Roy W. and Eugenia C. McDonald Endowed Chair in Civil
Procedure at the School of Law at the University of Texas at Austin. He is also Professor
of Government and Co-Director of the Center on Lawyers, Civil Justice, and the Media.
Steven Davidoff Solomon is Professor of Law at UC Berkeley School of Law and Faculty
Director of the Berkeley Center for Law and Business.
Randall S. Thomas holds the John S. Beasley II Chair in Law and Business, and directs
the Law & Business Program at Vanderbilt Law School. He also serves as a Professor of
Management at the Owen Graduate School of Management, Vanderbilt University.
David H. Webber is Professor of Law at Boston University School of Law.
Verity Winship is Professor of Law at the University of Illinois College of Law.
Chao Xi is Professor and Vice Chancellor’s Outstanding Fellow of the Faculty of Law at
the Chinese University of Hong Kong.
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