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http://ssrn.com/abstract=2200499
 
 

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Putting Stockholders First, Not the First-Filed Complaint


Leo E. Strine Jr.


Government of the State of Delaware - Supreme Court of Delaware; Harvard Law School; University of Pennsylvania Law School

Lawrence A. Hamermesh


Widener University School of Law

Matthew Jennejohn


J. Reuben Clark Law School, BYU

January 10, 2013

Business Lawyer, Vol. 69, 2013
Harvard John M. Olin Center for Law, Economics, and Business Discussion Paper No. 740
Widener Law School Legal Studies Research Paper No. 13-25

Abstract:     
The prevalence of settlements in class and derivative litigation challenging mergers and acquisitions in which the only payment is to plaintiffs’ attorneys suggests potential systemic dysfunction arising from the increased frequency of parallel litigation in multiple state courts. After examining possible explanations for that dysfunction, and the historical development of doctrines limiting parallel state court litigation — the doctrine of forum non conveniens and the “first-filed” doctrine — this article suggests that those doctrines should be revised to better address shareholder class and derivative litigation. Revisions to the doctrine of forum non conveniens should continue the historical trend, deemphasizing fortuitous and increasingly irrelevant geographic considerations, and should place greater emphasis on voluntary choice of law and the development of precedential guidance by the courts of the state responsible for supplying the chosen law. The “first-filed” rule should be replaced in shareholder representative litigation by meaningful consideration of affected parties’ interests and judicial efficiency.

Number of Pages in PDF File: 105

Keywords: class actions, derivative suits, forum non conveniens, first-filed rule, multi-forum litigation, internal affairs doctrine, choice of law, choice of forum, state of incorporation

JEL Classification: G3, G38, K2, K22

working papers series


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Date posted: January 17, 2013 ; Last revised: January 15, 2014

Suggested Citation

Strine , Leo E. and Hamermesh, Lawrence A. and Jennejohn, Matthew, Putting Stockholders First, Not the First-Filed Complaint (January 10, 2013). Business Lawyer, Vol. 69, 2013; Harvard John M. Olin Center for Law, Economics, and Business Discussion Paper No. 740; Widener Law School Legal Studies Research Paper No. 13-25. Available at SSRN: http://ssrn.com/abstract=2200499 or http://dx.doi.org/10.2139/ssrn.2200499

Contact Information

Leo E. Strine Jr.
Government of the State of Delaware - Supreme Court of Delaware ( email )
820 N. French Street
P.O. Box 1997
Wilmington, DE 19801
United States
Harvard Law School ( email )
1563 Massachusetts Ave
Cambridge, MA 02138
United States
University of Pennsylvania Law School ( email )
3501 Sansom Street
Philadelphia, PA 19104
United States
Lawrence A. Hamermesh (Contact Author)
Widener University School of Law ( email )
PO Box 7474
Wilmington, DE 19803
United States
302-477-2132 (Phone)
302-477-2257 (Fax)
Matthew Jennejohn
J. Reuben Clark Law School, BYU ( email )
430 JRCB
Brigham Young University
Provo, UT 84602
United States
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