Law Commons^™

A Blended Approach To Reducing The Costs Of Shareholder Litigation, Valian A. Afshar

Michigan Law Review

Multiforum litigation and federal securities law class actions impose heavy costs on corporations and their shareholders without producing proportionate benefits. Both are largely the result of the agency problem between shareholders and their attorneys, driven more by the attorneys’ interests in generating fees than by the interests of their clients. In response to each of these problems, commentators have recommended a number of solutions. Chief among them are forum selection and mandatory arbitration provisions in a corporation’s charter or bylaws. This Note recommends that corporations unilaterally adopt both forum selection and mandatory arbitration bylaws to address shareholder lawsuits under state …

Securities Class Actions And Bankrupt Companies, James J. Park

Michigan Law Review

Securities class actions are often criticized as wasteful strike suits that target temporary fluctuations in the stock prices of otherwise healthy companies. The securities class actions brought by investors of Enron and WorldCom, companies that fell into bankruptcy in the wake of fraud, resulted in the recovery of billions of dollars in permanent shareholder losses and provide a powerful counterexample to this critique. An issuer's bankruptcy may affect how judges and parties perceive securities class actions and their merits, yet little is known about the subset of cases where the company is bankrupt. This is the first extensive empirical study …

Personal Jurisdiction Over Aliens In Patent Infringement Actions: A Uniform Approach Toward The Situs Of The Tort, David Wille

Michigan Law Review

This Note examines current approaches to the question of personal jurisdiction over alien patent infringers. Part I describes personal jurisdiction requirements in the context of patent infringement suits against aliens. The leading case addressing these requirements has been interpreted differently by several courts, thus resulting in conflicting outcomes. Part II explains the current controversy over the locus of the tort of patent infringement. The three different modes of reasoning currently used by courts to determine the locus of the tort would allow immunity from suit for the alien in at least two hypothetical cases. This Part concludes that in order …

Misuse Of The Antitrust Laws: The Competitor Plaintiff, Edward A. Snyder, Thomas E. Kauper

Michigan Law Review

In this article we ask (1) under what circumstances are competitor suits meritorious, and (2) do existing rules, such as those requiring proof of market power or other so-called filters and the requirement that plaintiffs suffer "antitrust injury," afford a reasonable prospect of eliminating anticompetitive misuses of the remedy by competitor plaintiffs? We evaluate a sample of seventy-four cases in which plaintiffs sued their rivals to learn how competitor plaintiffs use the private antitrust remedy. And because many of these cases allege anticompetitive exclusionary practices, we consider how recent theories of exclusionary practices may be used to support competitor claims. …

Federal Venue Under Section1392(A): The Problem Of The Multidistrict Defendant, Brent E. Johnson

Michigan Law Review

This Note argues that a broad construction of section 1392(a) which would allow Aunt Bea to bring suit in the Southern District of California where Mayberry alone resides is preferable to a narrow construction which would restrict Bea to the Northern District where both defendants reside. Part I of this Note maintains that the language of section 1392(a) is ambiguous and does not indicate the clear intent of Congress, despite assertions to the contrary by proponents of both the broad and narrow constructions of the statute. Part II demonstrates that a superficially relevant Supreme Court decision tending to support the …

Target Litigation, Michael Rosenzweig

Michigan Law Review

In Part I, I explore the motives of litigious target managers. I briefly examine the takeover defense literature and empirical evidence regarding the frequency of target litigation, both of which indicate that target managers usually sue bidders in order to defeat unwanted takeover attempts. I also suggest that judicial reactions to target lawsuits largely confirm this hypothesis.

I then discuss, in Part II, target management's conflict of interest in control contests and the particular strategic considerations that lead target managers to sue hostile bidders. I argue that target litigation is peculiarly likely to be frivolous and, based on a study …

Antitrust Suits By Targets Of Tender Offers, Frank H. Easterbrook, Daniel R. Fischel

Michigan Law Review

We explore in this Article the basis and consequences of the target's suit under the antitrust laws. We approach the question from the perspective of federal antitrust law and state corporation law.

We argue in Part I that the target is a singularly poor "private attorney general" because it is a beneficiary, not a victim, of any violation. An antitrust suit thus must be understood as an attempt by managers to defend their own positions, not as an attempt to vindicate the public interest. In the jargon of antitrust, the target is not a victim of "antitrust injury" and therefore …

Limiting The Plaintiff Class: Rule 10b-5 And The Federal Securities Code, Michigan Law Review

Michigan Law Review

The Penn Central litigation, involving a large, publicly held corporation, illustrates the need to examine the reach of the federal antifraud provisions. This Note discusses the problem of defining the plaintiff class when the number of past and present shareholders who are potential plaintiffs is very great. Attention will center on the methods courts have used to limit the class of investors compensable under rule 10b-5. Also, the effect that enactment of present drafts of the American Law lnstitute's proposed Federal Securities Code would have on the composition of the plaintiff class in analogous actions will be discussed. Finally, the …

Res Judicata In The Derivative Action: Adequacy Of Representation And The Inadequate Plaintiff, Michigan Law Review

Michigan Law Review

It is the purpose of this Note to examine the adequacy of representation in a derivative suit and to consider the appropriateness of applying res judicata to foreclose the corporate cause of action. Discussion will focus on the following areas: (1) the problem of the inadequate plaintiff; (2) the efficacy of judicially created devices designed to ensure the adequacy of representation; and, (3) the feasibility of partially exempting the derivative cause of action from the operation of res judicata.