Archive for June, 2007

What when where: f-cubed, competitiveness

Tuesday, June 26th, 2007

The American Bar Association earlier this month hosted a webcast, entitled Class Actions in a Global Economy: Investor Claims Against Non-U.S. Issuers. Munger, Tolles & Olson LLP’s James C. Rutten moderated the panel, consisting of Lynda J. Grant (Labaton Sucharow & Rudoff LLP) and Richard A. Martin (Heller Ehrman LLP) among others. The 75 minute recording may be purchased through the ABA Web Store from today.

The US Chamber of Commerce’s Institute for Legal Reform and National Chamber Foundation jointly host a half-day forum on 1 August in Washington, DC under the heading Lawsuits and Global Competitiveness: Is the U.S. Litigation System a Beacon or Barrier to Foreign Investment? (event details, or view the live webcast)

In re GSK, after Paxil comes Avandia

Tuesday, June 26th, 2007

Drugs have landed GlaxoSmithKline Plc (LSE, NYSE: GSK) in the docket, again. Two years ago it was securities fraud claims surrounding Paxil - in the UK marketed under the name Seroxat - two weeks ago it was the drug Avandia. See the 2005 action’s press release and the 2007 action’s complaint (07 Civ. 5574, SDNY).

Plaintiffs’ Counsel: Scott + Scott LLC (2005) and Kaplan Fox & Kilsheimer LLP (2007)

The current status of the earlier action, In re GlaxoSmithKline Sec. Litig. (05 Civ. 3751, SDNY) filed in May 2005, is that the second amended complaint was dismissed in October 2006: “Plaintiff has failed to state a primary violation of the securities laws under section 10(b). Without a primary violation, there can be no secondary, or derivative, violation under Section 20(a). Accordingly, Plaintiff’s Section 20(a) claim is also dismissed.” (cited in In re NTL Sec. Litig.) An appeal had been filed with the US Court of Appeals for the Second Circuit. (Also see GSK’s 2006 Annual Report, p.163 (165 of 192).)

After having read the complaint in the current action (filed 11 June), for more information see the following GSK communications:

  • press release in response to New England Journal of Medicine editorials (5 June)
  • press release regarding data from RECORD study in relation to Avandia (5 June)
  • statement of Moncef Slaoui, PhD, GSK Chairman Research & Development in testimony before the House Committee on Oversight and Government Reform (6 June)

A GSK spokesperson has, in line with its policy not to comment on individual lawsuits, submitted the following in response to a request for comment concerning the current action:

We will vigorously defend our medicine. GSK has acted responsibly, transparently and with the best interest of patients in mind. Any fair examination of the company’s record will show that GSK has been transparent in its efforts to thoroughly study the safety and effectiveness of Avandia, and to widely communicate that information to governments, regulatory authorities, scientific peers, physicians and others in a variety of ways.

The proposed Class Period is the period between 27 October 2005 and 21 May 2007, inclusive. The deadline to apply for Lead Plaintiff status is 10 August 2007.

Wrapping it up, 20 June 2007

Wednesday, June 20th, 2007

What follows here is a wrap up of a few recent articles and posts, including on the UK Companies Act 2006, the ‘f-cubed’ class and national Enrons.

Alan Karter of Simmons & Simmons comments in the FT’s blog Alphaville on the Companies Act 2006 and the statutory directors duties and derivative action:

The worry is that the new shareholder derivative action is so clear that people are bound to want to take advantage of it. There’s a huge temptation to use the stick because it’s there and because it’s new. It remains to be seen whether this combination (of statutory general duties of directors and shareholder derivative action) will be used […] Most business people regard litigation as a tool of last resort in the UK. It will be interesting to see if litigation around these issues starts to be used in the UK as a tool more in the American style.

Edwin Coe LLP seems to be clearer and more decisive on what effect the Act, which comes into force in October this year, will have on directors duties and derivative actions in particular:

The Act undoubtedly heralds significant changes but these changes do not in any way match shareholders’ rights in the US and it is highly unlikely that we will see any substantial growth in shareholder litigation as a result of the new provisions. (source)

WV&Z agrees with Edwin Coe on this point. Some things change and some things don’t. It’s the things that don’t - the ‘loser pays’ principle is one, the lack of availability of the contingency fee arrangement is another - that make it all in the end remain the same as it was. (Also see this previous post.)

Two interesting articles on foreigners in the US, by John C. Coffee Jr and Quinn Emanuel Urquhart Oliver & Hedges LLP, entitled ‘Foreign Issuers Fear Global Class Actions’ and ‘Foreign Plaintiffs and Class Members in U.S. Class Actions’ respectively.

Two notes on the Coffee article: he refers to a ’series of recent reports’ on capital markets competitiveness, one of which is by the (not therein expressly named) so-called Paulson Committee: Prof Coffee served as a consultant to the committee; Prof Coffee was retained by Royal Dutch Shell Plc to provide “the court with a brief memorandum outlining the extraterritorial reach of the United States’s federal securities laws” (but not to “address the merits of the dispute between the parties in the U.S. litigation”). (declaration, an annex to the court petition) In re Royal Dutch/Shell Transport Sec. Litig. and the Shell Settlement is one of the examples given.

Schiffrin Barroway Topaz & Kessler LLP has struck up its third alliance, with Isreali firm Man-Barak Advocates & Solicitors (press release, and see SLW) which already had an alliance with City firm McFaddens LLP, and it welcomes economist Peter Kraneveld in an advisory role, as does State Street Global Advisors. (source)

And finally, each country its own Enron, via Best in Class (and Lies Damn Lies).

What when where: Legal Week’s Litigation Forum 2007 takes place in London on 19 September. The two panel sessions of most interest here are ‘Class action: friend or foe?’ which pits Cohen Milstein Hausfeld & Toll PLLC’s Rob Murray of the firm’s London office against, among others, Andrew L. Sandler of Skadden Arps Slate Meagher & Flom LLP, and ‘Litigation funding models’ which includes representatives from IM Litigation Funding and NERA Economic Consulting. (programme and registration form)

In re Vivendi Universal SA: SEC, class cert

Sunday, June 10th, 2007

Though it actually warrants far larger exposure (and scrutiny) than given here now, for now just two notes on proceedings involving Vivendi Universal SA, as it then was (Vivendi SA; Euronext: VIV), namely on the SEC settlement and the class certification in the securities action.

The deadline to file your claim to share in the $51 million SEC settlement is in two days, Tuesday 12 June. See the Vivendi SEC Settlement website for the notice, proof of claim form and more information and to file your claim online. (Note that the eleven countries on the home page of the site seem to indicate language only. The eligibility criteria do not include requirements of citizenship or exchange of purchase.)

Ross Dixon & Bell LLP’s D&O Liability alert of 28 March has a review of the class certification, the court having certified the class as purchasers of the United States, France, England and the Netherlands. “Recognition in England, Your Honour? Is that England the constituent country, or England and Wales together which share the same legal system under English law? Your Honour, are all citizens of the United Kingdom of Great Britain and Northern Ireland, the sovereign state, included?” (In re Vivendi Universal SA Securities Litigation, No. 02-5571 (SDNY))

With thanks to Eric J. Belfi of Labaton Sucharow & Rudoff LLP for his submission of the class certification decision at the time and an update this week, earlier this week the review of the decision has been denied and so the class as certified remains. Also see the US Chamber of Commerce’s amicus brief, in which its affiliate the National Chamber Litigation Center argues that “there should be a virtual certainty of preclusive effect before a class including foreign members should ever be certified”.

What’s more: Steve W. Berman of Hagens Berman Sobol Shapiro LLP and James Quinney of Herbert Smith LLP give the only presentation on class actions at the International Litigation and Fraud conference in London, 26 and 27 June. Key note speaker is Mr Justice Langley of the Royal Courts of Justice. (programme with registration form or book online)

Debating derivative actions in Legal Week

Sunday, June 3rd, 2007

This week’s Legal Week - its monthly Global edition - contains an article of mine, Werner R. Kranenburg’s Debating derivatives, on US derivative actions against non-US corporations. What follows here are sources used, including two previous WV&Z posts which in turn include links to certain court documents, acknowledgements and annotations to the article.

A selection of the sources I have used, listing mainly the papers:

I wish to gratefully acknowledge Brian P. Murray of Murray Frank & Sailer LLP, Adam Savett of Securities Litigation Watch and Stefan Winheller of Winheller Rechtsanwälte for their respective contributions of material. Any errors or omissions are of course my own and you are kindly invited to contact me with any feedback.

And finally some notes and updates: In the final paragraph of the article I state that the two plaintiffs in the BP action are American Depository Receipt holders; it would have been more accurate to have stated that the two filing plaintiffs are ADR holders. As discussed in a previous post on the action (as above), they were later joined by the London Pension Fund Authority, a UK shareholder. The defence argued the ADR and standing issue in its notice of removal of the action to Alaska district court (here, p.7).

The latest news in the case is that both the motion to dismiss and the motion for reconsideration of the motion to dismiss were denied, on the 17th and 30th of May respectively.

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