Global Settlements: Promise and Peril

36 Pages Posted: 10 Apr 2019

See all articles by John C. Coffee

John C. Coffee

Columbia Law School; European Corporate Governance Institute (ECGI); American Academy of Arts & Sciences

Date Written: April 9, 2019

Abstract

In 2010, Morrison v. National Australia Bank Ltd. destabilized the world of securities litigation by denying those who purchased their securities outside the U.S. the ability to sue in the U.S. (as they had previously often done). Nature, however abhors a vacuum, and practitioners and other jurisdictions began to seek ways to regain access to U.S. courts. Several techniques have emerged: (1) expanding settlement classes so that they are broader than litigation classes and treating the location of the transaction as strictly a merits issue that defendants could waive; (2) adopting U.S. law as applicable to securities issued abroad by crosslisted companies (as Israel has done); (3) use of the Netherland’s WCAM statute to effect a global resolution of a settlement class; and (4) coordination between the courts in both jurisdictions in the case of a cross-listed stock. On the horizon is still a more ambitious technique: use of supplemental jurisdiction to permit a class of foreign claimants to be combined with a class of U.S. claimants. Early decisions have divided on this technique. This article suggests guidelines for courts to follow in whether to allow foreign claimants in securities actions to re-enter the U.S.

Keywords: Canadian securities litigation, class action, comity, extraterritorial, Israeli securities litigation, Morrison, Netherlands class action, Petrobras, plaintiff’s attorneys, securities fraud, securities litigation, settlement class, supplemental jurisdiction, WCAM

JEL Classification: G14, G15, G18, G28, G30, G38, K22, K41, K42

Suggested Citation

Coffee, John C., Global Settlements: Promise and Peril (April 9, 2019). Columbia Law and Economics Working Paper No. 604. Available at SSRN: https://ssrn.com/abstract=3369199 or http://dx.doi.org/10.2139/ssrn.3369199

John C. Coffee (Contact Author)

Columbia Law School ( email )

435 West 116th Street
New York, NY 10025
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212-854-2833 (Phone)
212-854-7946 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

American Academy of Arts & Sciences

136 Irving Street
Cambridge, MA 02138
United States

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