A Great Game: The Dynamics of State Competition and Litigation

Cain, Matthew D.; Davidoff Solomon, Steven

doi:10.2139/ssrn.1984758

A Great Game: The Dynamics of State Competition and Litigation

Iowa Law Review, Vol. 100, No. 165, 2015

37 Pages Posted: 13 Jan 2012 Last revised: 30 Mar 2015

See all articles by Matthew D. Cain

Steven Davidoff Solomon

University of California, Berkeley - School of Law; University of California, Berkeley - Berkeley Center for Law, Business and the Economy; European Corporate Governance Institute (ECGI)

Date Written: January 1, 2015

Abstract

We provide a multi-dimensional picture of jurisdictional competition for corporate litigation by examining merger litigation in a hand-collected sample of 1,117 takeovers from 2005-2011. We find that entrepreneurial plaintiffs’ attorneys drive this competition by bringing suits in jurisdictions which have previously awarded more favorable judgments and higher fees and by avoiding unfavorable jurisdictions. States with an apparent interest in attracting corporate litigation respond in-kind by adjusting judgments and awards to re-attract litigation. These states award higher attorneys’ fees and dismiss fewer cases when attorneys have been migrating to other jurisdictions. Our findings illuminate the dynamics and existence of jurisdictional competition for corporate litigation.

Keywords: Merger Litigation, Takeovers, Jurisdictional Competition, Delaware, Plaintiffs' Attorneys, Shareholder Class Actions

Suggested Citation: Suggested Citation

Cain, Matthew D. and Davidoff Solomon, Steven, A Great Game: The Dynamics of State Competition and Litigation (January 1, 2015). Iowa Law Review, Vol. 100, No. 165, 2015, Available at SSRN: https://ssrn.com/abstract=1984758 or http://dx.doi.org/10.2139/ssrn.1984758