Securities class actions in state court

University of Cincinnati Law Review

Volumn 80, Issue 2, 2011, Pages 349-388

  Johnson, Jennifer J ^a  

^a LEWIS AND CLARK LAW SCHOOL   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84867209600     PISSN: 00096881     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (134)

1. National Securities Market Improvement Act of 1996, Pub. L. No. 104-290, 110 Stat. 3416
2. Jennifer J. Johnson, Private Placements: A Regulatory Black Hole, 35 Del. J. CORP. L. 151 (2010)
3. Securities Litigation Uniform Standards Act of 1998, Pub. L. No. 105-353, 112 Stat. 3227
4. Private Securities Litigation Reform Act of 1995, Pub.L. No. 104-67, 109 Stat. 737
5. Class Action Fairness Act of 2005, Pub. L. No. 109-2, 119 Stat. 4
6. 28 U.S.C. § 1332(d)(2) (2006).
7. Securities Exchange Act of 1934 § 10(b), 15 U.S.C. § 78j (2006)
8. 17C.F.R. §240.10b-5 (2010).
9. Kardon v. Nat'l Gypsum Co., 69 F. Supp. 512, 513-14
10. Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 730 (1975).
11. Merrill Lynch v. Dabit, 547 U.S. 71, 79
12. Ins. of N.Y. v. Bankers Life & Cas. Co., 404 U.S. 6 (1971))
13. Ernst & Ernst v. Hochfelder, 425 U.S. 185,196 (1976).
14. 544 U.S. 336,341 (2005).
15. TSC Indus, v. Northway, Inc., 426 U.S. 438,449 (1976).
16. Ernst & Ernst, 425 U.S. at 193.
17. Blue Chip Stamps, 421 U.S. at 730-55
18. Basic Inc. v. Levmson, 485 U.S. 224, 241-50 (1988)
19. Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc. 552 U.S. 148, 159-66 (2008)
20. Jennifer J. Johnson & Edward Brunet, Critiquing Arbitration of Shareholder Claims, 36 SEC. REG. L. J. 181, 183-85 (2008)
21. Merritt B. Fox, Civil Liability and Mandatory Disclosure, 109 COLUM. L. REV. 237,281 (2009)
22. Amanda M. Rose, Reforming Securities Litigation Reform: Restructuring the Relationship Between Public and Private Enforcement of Rule 10b-5, 108 COLUM. L. REV. 1301, 1314 (2008)
23. Donald C. Langevoort, On Leaving Corporate Executives "Naked, Homeless and Without Wheels ": Corporate Fraud, Equitable Remedies, and the Debate Over Entity Versus Individual Liability, 42 WAKE FOREST L. REV. 627 (2007)
24. Janet Cooper Alexander, Rethinking Damages in Securities Class Actions, 48 Stan. L. Rev. 1487, 1504 (1996)
25. Jennifer Arlen & William Carney, Vicarious Liability for Fraud on Securities Markets: Theories and Evidence, 1992 U. ILL. L. REV. 691
26. Joel Seligman, The Merits Do Matter, 108 Harv. L. Rev. 438 (1994)
27. PSLRA, Pub. L. No. 104-67,109 Stat. 737
28. 15 U.S.C. § 78-u4(b)(3)(B) (2006)
29. Merrill Lynch v. Dabit, 547 U.S. 71, 82 (2006)
30. S. REP. No. 105-182, at 3-4 (1998)).
31. SLUSA, Pub. L. No. 105-353, 112 Stat. 3227
32. Dabit, 547 U.S. at 82.
33. 15 U.S.C. §78bb(f)(2)
34. Proctor v. Vishay Intertech. Inc., 584 F.3d 1208 (9th Cir. 2009)
35. Kircher v. Putman Funds Trust, 547 U.S. 633 (2006).
36. Anderson v. Merrill Lynch Pierce Fenner & Smith, Inc. 521 F.3d 1278
37. Siepel v. Bank of Am., N.A., 526 F.3d 1122 (8th Cir. 2008).
38. 547 U.S. 71 (2006).
39. 28 U.S.C. § 1332(d)(9)(A).
40. 28 U.S.C. § 1332(d)(9)(B).
41. 28 U.S.C. § 1332(d)(9)(C).
42. 28 U.S.C. § 1332(d)(4)(B)
43. Lao v. Wickes Furniture Co., 455 F. Supp. 2d 1045, 1050
44. Securities Act of 1933 § 11,15 U.S.C. § 77k (2006).
45. Securities Act of 1933 Act § 12(a)(2), 15 U.S.C. § 771(a)(2) (2006)
46. 1933 Act § 11, 15 U.S.C. § 77k (2006).
47. Securities Act of 1933 Act § 22,15 U.S.C. § 77v (2006).
48. Securities Act of 1933 Act § 16(b), 15 U.S.C. § 77p(c) (2006).
49. Federal Courts adopting this view include: Unschuld v. Tri-S Sec. Corp., No. 06 Civ. 2931-JEC, 2007 WL 2729011 (N.D. Ga. Sept. 14, 2007)
50. Irra v. Lazard Ltd., No. 05 CV 3388RJDRML, 2006 WL 2375472 (E.D.N.Y. Aug. 15, 2006)
51. Pipefitters Local 522 & 633 Pension Trust Fund v. Salem Commc'ns Corp., No. CV 05-2730-RGK, 2005 U.S. Dist. LEXIS 14202 (CD. Cal. June 28, 2005)
52. In re Tyco Int'l, Ltd., 322 F. Supp. 2d 116 (D.N.H. 2004)
53. Nauheim v. Interpublic Grp. of Co., No. 02-C9211,2003 WL 1888843 (N.D. 111. Apr. 16,2003)
54. Haw. Structural Ironworkers Pension Trust Fund v. Calpine Corp., No. 03-cv-0714-BTM (JFS), 2003 WL 23509312 (S.D. Cal. Aug. 27, 2003)
55. In re Waste Mgmt, Inc. Sec. Litig., 194 F. Supp. 2d 590 (S.D. Tex. 2002)
56. Contra Rubin v. Pixelplus Co., Ltd., No. 06-CV-2964(ERK), 2007 WL 778485 (E.D.N.Y. Mar. 13, 2007)
57. Pinto v. Vonage Holdings Corp., No. 07-0062 (FLW), 2007 WL 1381746
58. Rovner v. Vonage Holdings Corp., No. 07-178 (FLW), 2007 WL 446658
59. Lowinger v. Johnston, No. 3:05-CV-316-H, 2005 WL 2592229
60. In re King Pharms., Inc., 230 F.R.D. 503, 505 (E.D. Tenn. 2004)
61. Kulinski v. Am. Elec. Power Co., Inc., No. Civ.A.C-2-03-412, 2003 WL 24032299 (S.D. Ohio Sept 19, 2003)
62. Brody v. Homestore, Inc., 240 F. Supp. 2d 1122 (CD. Cal. 2003)
63. Alkow v. TXU Corp., Nos. 3:02CV2738K, 3:02 CV 2739 K, 2003 WL 21056750
64. Knox v. Agria Corp., 613 F. Supp. 2d 419 (S.D.N.Y. 2009).
65. Courts adopting this view include: Rubin, No. 06-CV-2964(ERK)
66. Pinto, No. 07-0062 (FLW), 2007 WL 1381746 (D.N.J. May 7, 2007)
67. Rovner, No. 07-178 (FLW), 2007 WL 446658 (D.N.J. Feb. 7, 2007)
68. Lowinger, No. 3:05-CV-316-H, 2005 WL 2592229 (W.D.N.C. Oct. 13, 2005)
69. In re King Pharmaceuticals., Inc., 230 F.R.D. 503, 505 (E.D. Tenn. 2004)
70. Kulinski, No. Civ.A.C-2-03-412, 2003 WL 24032299 (S.D. Ohio Sept. 19, 2003)
71. Brody, 240 F. Supp. 2d 1122 (CD. Cal. 2003)
72. Alkow, Nos. 3:02CV2738K, 3:02 CV 2739 K, 2003 WL 21056750 (N.D. Tex. May 8, 2003) (same).
73. 28 U.S.C. § 1447(d)
74. Kircher v. Putnam Trust Funds, 547 U.S. 633, 640 (2006).
75. 28 U.S.C. § 1332(d)(9)(A) (2006).
76. 15 U.S.C. § 77p(d)(4)
77. Luther v. Countrywide Home Loans Servicing LP, 533 F.3d 1031 (9th Cir. 2008)
78. Katz v. Gerardi, 552 F.3d 558, 561-62 (7th Cir. 2009).
79. Pauline T. Kim et al., How Should We Study District Court Decision-Making?, 29 WASH. U. J.L. & POL'Y 83, 103 (2009)
80. U.S. Supreme Court. Merrill Lynch v. Dabit, 547 U.S. 71, 81-82 (2006)
81. High-tech companies located in Silicon Valley led the lobbying effort. Leslie Eaton, The Silicon Valley Gang
82. An Influential Industry With Lots of Money Is Getting Its Way on Capitol Hill, N.Y.TIMES, June 11, 1998, at D1
83. Michael Perino, Fraud and Federalism: Preempting Private State Securities Causes of Action, 50 STAN L. REV. 273 (1998)
84. The federal filing data is provided courtesy of Luke Green at SCAS.
85. 15 U.S.C. § 78n(a), (e) (2006).
86. H.R. REP. No. 105-803, at 13-14 & n.2 (1998)
87. 15U.S.C. §77p(d)(l)(2006).
88. Huang v. Reyes, No. C 07-5950 CRB, 2008 WL 648519 (N.D. Cal. 2008)
89. Gibson v. PS Grp. Holdings, Inc., Fed. Sec. L. Rep. 90,921 (S.D. Cal. 2000)
90. Davis v. Mich. Dep't of Treasury, 489 U.S. 803, 808 n.3 (1989)
91. Jennifer J. Johnson, Secondary Liability for Securities Fraud: Gatekeepers in State Court, 36 DEL. J. CORP. L. 463 (2011)
92. Dura Pharm., Inc. v. Broudo, 544 U.S. 336 (2005)
93. Or. Rev. Stat. § 59.137 (2010)
94. Lee v. Carter-Reed Co., L.L.C., No. A-4598-07T1, 2009
95. Garcia v. Medved Chevrolet, Inc., No. 09CA1465, 2009 WL 3765481, at 10
96. Malone v. Brincat, 722 A.2d 5, 13 (Del. Super. Ct. 1998)
97. 15U.S.C. § 77z-l (2006).
98. UNIF. TRANSFER OF LITIG. Act § 201, 14 U.L.A. 677 (1991)
99. Rosen v. Wind River Sys., No. 4674-VCP, 2009 WL 1856460, at 5
100. In re Topps Co. S'holder Litig., 924 A.2d 951 (Del. Ch. 2007)
101. In re Topps Co., Inc. S'holders Litig., No. 600715/07, 2007 WL 5018882 (N.Y. Sup. Ct. June 8, 2007)
102. Tonnemacher v. Touche Ross & Co., 920 P.2d 5, 8 (Ariz. Ct. App. 1996).
103. COMPLEX LITIGATION: STATUTORY RECOMMENDATIONS AND ANALYSIS (1994)
104. Edward H. Cooper, Interstate Consolidation: A Comparison of the ALI Project with the Uniform Transfer of Litigation Act, 54 LA. L. REV. 897, 905-06 (1994)
105. 28 U.S.C. § 2283 (2006).
106. Writs Act, 28 U.S.C. § 1651(a)
107. Compare Newby v. Enron Corp., 302 F.3d 295, 303 (5th Cir. 2002)
108. Ted Mirvis, Anywhere But Chancery: Ted Mirvis Sounds an Alarm and Suggests Some Solutions, 7 M&A J. 17 (May 2007)
109. Mark Lebovitch, Jerry Silk & Jeremy Friedman, Making Order Out of Chaos: A Proposal to Improve Organization and Coordination in Multi-Jurisdictional Merger-Related Litigation (Dec. 31, 2010)
110. In re Allion Healthcare Inc. S'holders Litig., No. 5022-CC, slip op. at 9-10
111. In re Compellent Techs., Inc. S'holders Litig., No. 6084-VCL, slip op. at 26
112. In re Revlon, Inc. S'holders Litig., 990 A.2d 940, 945-46 (Del. Ch. 2010)
113. Transcript of Status Conference, Scully v. Nighthawk Radiology Holdings, Inc., No. 5890-VCL
114. Allion Healthcare Inc. S'holders Litig., No. 5022-CC, slip op. at 10
115. Reynolds v. Beneficial Nat'l Bank, 288 F.3d 277, 282 .
116. In re Mobile Commc'ns Corp. of Am. Consol. Litig., Fed. Sec. L. Rep. P 96, 558, 1991 WL 1392, at 11
117. De Angelis v. Salton/Maxim Housewares, Inc., 641 A.2d 834, 838 (Del. Ch. 1993)
118. Brief of Special Counsel, Scully v. Nighthawk Radiology Holdings, Inc., No. 5890-VCL (Del. Ch. Mar. 11,2011)
119. 28 U.S.C. § 1711(2)(a)(lH4) (2006)
120. In re Revlon S'holders Litig., 990 A.2d 940, 956-64 (Del. Ch. 2010)
121. King v. VeriFone Holdings, Inc., 994 A. 2d 354, 357 (Del. Ch. 2010)
122. In re Cox Commc'n S'holders Litig., 879 A.2d 604 (Del. Ch. 2005)
123. TCW Tech. Ltd. P'ship v. Intermedia Commc'ns, Inc.
124. Brief of Special Counsel, Scully v. Nighthawk Radiology Holdings, Inc., No. 5890-VCL, slip op. at 28
125. http://www.bloomberg.com/news/2011-01-20/merger-claims-drive-rise-in- securities-class-actions-study-says.html.
126. In re Revlon, Inc. S'holders Litig., 990 A.2d 940, 945-64 (Del. Ch. 2010)
127. Marcel Kahan & Edward Rock, Symbioitc Federalism and the Structure of Corporate Law, 58 VAND. L. Rev. 1573 (2005)
128. Leo E. Strine, Delaware's Corporate-Law System: Is Corporate America Buying An Exquisite Jewel Or A Diamond In The Rough? A Response To Kahan & Kamar's Price Discrimination In The Market For Corporate Law, 86 CORNELL L. REV. 1257, 1273-74 (2001)
129. In re ICX Techs., Inc. S'holder Litig., No. 5769-VCL, at 4 (Del. Ch. Feb. 2, 2011)
130. In re Burger King Holdings, Inc. S'holders Litig., No. 5808-VCL, at 10 (Del. Ch. Jan. 19, 2011)
131. http://ssrn.com/abstract-id=1699464
132. http://ssrn.com/abstract=1690561
133. http://www.lw.corn/upload/pubContent/jxlf7pub3510-1.pdf
134. Galaviz v. Berg, 763 F. Supp. 2d 1170 (N.D. Cat. Jan. 3,2011).