Law Commons^™

Lying And Getting Caught: An Empirical Study Of The Effect Of Securities Class Action Settlements On Targeted Firms, Lin (Lynn) Bai, James D. Cox, Randall S. Thomas

Faculty Articles and Other Publications

Private suits have long been championed as a necessary mechanism not only to compensate investors for harms they suffer from financial frauds but also to enhance the deterrence of wrongdoing. But many critics have claimed that there is a hidden dark side to the successful prosecution of a securities class action. In this paper, we shed light on these issues by examining whether the revelation of earlier misstatements, the initiation of private suit, and the payment of a substantial settlement, weaken the defendant firm so that the firm is permanently worse off as a consequence of the settlement.

We find …

Do Differences In Pleadings Standards Cause Forum Shopping In Securities Class Actions?: Doctrinal And Empirical Analyses, James D. Cox, Randall S. Thomas, Lin (Lynn) Bai

Faculty Articles and Other Publications

Federal appellate courts have promulgated divergent legal standards for pleading fraud in securities fraud class actions after the Private Securities Litigation Reform Act (PSLRA). Recently, the Supreme Court of the United States issued a decision in Tellabs, Inc. v. Makor Issues & Rights, Ltd. that could have resolved these differences, but did not do so. This Paper provides two significant contributions. We first show that Tellabs avoids deciding the hard issues that confront courts and litigants daily in the wake of the PSLRA's heightened pleading standard. As a consequence, the opinion keeps very much alive the circuits' disparate interpretations of …

Promoting, Prescribing, And Pushing Pills: Understanding The Lessons Of Antipsychotic Drug Litigation, Douglas Mossman Md, Jill L. Steinberg

Faculty Articles and Other Publications

Ineffectiveness of prescription drugs, hidden drug hazards, and advertising violations have led to several drug recalls and numerous lawsuits against pharmaceutical companies in recent years. These suits have involved several varieties of medications, but psychoactive medications have figured especially prominently. A recent $1.4 billion settlement by Eli Lilly & Company related to improper promotion of its top-selling drug olanzapine included the largest individual corporate criminal fine in U.S. history.

Improper promotion is far from the sole reason why olanzapine and other “second-generation” antipsychotic (SGA) drugs have become so successful. Rather, the widespread adoption of SGAs represents a collective judgment error …

Overcoming The Obstacles Of Garrett: An As Applied Saving Construction For The Ada's Title Ii, S. Elizabeth Malloy, Timothy J. Cahill

Faculty Articles and Other Publications

Recent Supreme Court cases regarding Congress's abrogation authority have seriously impaired Congress's ability to demonstrate a valid exercise of its Section 5 power under the Fourteenth Amendment to subject nonconsenting states to suit for money damages in federal court. During its 2003 term, the Supreme Court has again granted certiorari to a case involving the proper scope of Congress's section 5 power, Lane v. Tennessee. Lane involves a suit for money damages under Title II of the ADA based on the alleged failure of the State of Tennessee to make its courthouses accessible. Many commentators suggest that the Supreme Court …

Whose Federalism, S. Elizabeth Malloy

Faculty Articles and Other Publications

This Article examines briefly the Seminole Tribe and City of Boerne decisions. Part II then focuses on the ADA and the reasons why Congress made it applicable to government conduct as well as private conduct. Finally, Part III examines the argument, based on the new federalism, that the ADA should not apply to state entities. It does not appear that the Court's new federalism has had a liberty-enhancing effect for some of the most vulnerable persons in our society. The Court's revitalized federalism jurisprudence has led to questions about the continuing validity of many of our civil rights statutes as …

Fraud On The Market: A Criticism Of Dispensing With Reliance Requirements In Certain Open Market Transactions, Barbara Black

Faculty Articles and Other Publications

The still-developing fraud on the market theory is the primary method by which securitiesf raudp laintiffs have attempted either to relax or eliminate the troubling reliance and causation requirements. Professor Black examines this emerging theory and suggests that the traditional common-lawfraud concepts that focus on reliance and causation still have validity and continue, even in this context, to offer appropriate
limitations on liability. The Article analyzes cases that have reduced or ignored this reliance element and explains why the legal concepts from which the fraud on the market theory evolved demand stricter adherence to reliance in certain markets but not …

Is Stock A Security? A Criticism Of The Sale Of Business Doctrine In Securities Fraud Litigation, Barbara Black

Faculty Articles and Other Publications

This Article criticizes the use of the sale of business doctrine in securities fraud litigation. The Article first discusses the Supreme Court's efforts at defining a security, from its early investment contract analysis in SEC v. W.J. Howey Co., to Forman and other recent opinions. Part II analyzes the leading federal cases on the sale of business doctrine and examines problems in applying the doctrine. Next, part III examines alternative bases, within established Rule 10b-S jurisprudence, for dismissing the claims of purchasers of stock in close corporations. Finally, the Article asserts that, because the sale of business doctrine is inconsistent …