Lead Plaintiff Research Articles

Aggregation, Auctions, and Other Developments in the Selection of Lead Counsel under the PSLRA

JILL E. FISCH [*] I INTRODUCTION The Private Securities Litigation Reform Act of 1995 (the PSLRA) [1] reflects an innovative congressional effort to refine securities fraud class actions. In adopting the PSLRA, Congress recognized that although the class action is a valuable tool for increasing plaintiff access to the legal system, its structure presents opportunities for abuse. In particular, collective action problems and small claimant stakes limit plaintiff participation in litigation decisions. Decisions are made by entrepreneurial lawyers who effectively control the litigation. Plaintiffs' lawyers have a substantial interest in the litigation--frequently a larger interest than any individual class member. Lawyer control of class actions coupled with the potential divergence between the interests of the lawyers and those of the class creates a risk that litigation decisions will not reflect the best interests of the plaintiff class or society as a whole. Although the entrepreneurial lawyer is central to the functioning of the class action, structural problems raise concerns of litigation malfunction. Courts have been unsuccessful in addressing these problems despite their efforts to oversee litigation decisions and their broad control over the conduct of class actions and the award of attorneys' fees. Accordingly, Congress responded by adopting a mechanism in the PSLRA for the appointment of a statutory lead plaintiff. [2] The statute reflects the expectation that the lead plaintiff, presumptively the investor with the largest financial interest in the litigation, will oversee the conduct of the case and monitor the decisions of class counsel. [3] This enhanced client monitoring has the potential to reduce agency costs and improve litigation decisions. Litigation under the PSLRA has tested the efficacy of the lead plaintiff provision, introducing a number of promising developments. Institutional investors have demonstrated an increasing willingness to seek appointment as lead plaintiff and to play an active role in litigation. In some cases, the participation of institutional investors seems to be having the effects intended by Congress, including active negotiation of fee agreements and quality resolution of lawsuits. In the recent Cendant case, for example, three public pension funds, acting as a lead plaintiff group, oversaw litigation that culminated in the largest securities fraud settlement in history. [4] Substantial uncertainty remains, however, about the operation of the lead plaintiff provision and the appropriate method for selecting lead counsel. Plaintiffs' firms have developed a variety of techniques to secure lead counsel appointments. Some firms assemble large groups of investors to act as lead plaintiff; other firms are developing ongoing relationships with institutional investors who are likely to be repeat players in securities fraud litigation. Courts have varied in their analyses as to how the lead plaintiff should be selected. Decisional uncertainty, coupled with the high stakes involved in the selection of lead counsel, has led to significant collateral litigation. [5] This litigation may deter some investors from seeking lead plaintiff status. The issues raised in the battle over selection of lead plaintiff have also caused some courts to claim for themselves the task of selecting lead counsel. Several courts have gone so far as to auction off the lead counsel position. [6] This article focuses on two of the most problematic developments under the lead plaintiff provision: (1) the use of aggregation to unite large numbers of unrelated investors into a lead plaintiff group; and (2) the appointment of lead counsel through sealed bid auctions conducted by the courts. Both developments weaken the relationship between the statutory lead plaintiff and class counsel. As a result, they reduce the ability of the lead plaintiff to monitor the litigation, potentially frustrating the objectives of the PSLRA. …

Juror judgments in civil cases: Effects of plaintiff's requests and plaintiff's identity on punitive damage awards.

Two experiments were conducted to study the manner in which civil jurors assess punitive damage awards. Jury-eligible citizens were shown a videotaped summary of an environmental damage lawsuit and told that the defendant had already paid compensatory damages. They were asked to judge liability for punitive damages and, if damages were to be assessed, to assign a dollar award. Three independent variables were manipulated in the case materials: the dollar amounts that were explicitly requested by the plaintiffs in their closing arguments to the jury, the geographical location of the defendant corporation, and the location of the lead plaintiff. Consistent with prior findings of anchor effects on judgments, we found that the plaintiffs requested award values had a dramatic effect on awards: the higher the request, the higher the awards. We also found that local plaintiffs were awarded more than were geographically remote plaintiffs, while the location of the defendant company did not have reliable effects on the awards. The implications of these results for procedures in civil trials and for theories of juror decision making are discussed.

Conflict and Aggregation: Appointing Institutional Investors as Sole Lead Plaintiffs under the PSLRA

Suppose that a corporation's stock price falls after management reveals unexpected problems with a new product. Investors who bought stock before the announcement only to see the value of their investments collapse file numerous lawsuits on behalf of the class of investors.' The court then consolidates these actions into a single case. The next step is to select lead plaintiffs to conduct the litigation; this selection2 is governed by the recently enacted Private Securities Litigation Reform Act of 1995 (PSLRA).3 The PSLRA establishes a rebuttable presumption that the moving plaintiff who satisfies Federal Rule of Civil Procedure 23 and has the largest financial interest should be appointed lead plaintiff.4 In addition, the Act's legislative history

95/04568 Reflections on 100 years

Reflections: 25 years on, is a body of artworks by Gail Mabo reflecting on her artistic development. For Gail Mabo, 2017 marks the twenty-fifth anniversary of two significant events. On 3 June 1992, the High Court of Australia upheld the land rights claim led by her father, Eddie Koiki Mabo. The significance of these events is enhanced by occurring 50 years after the 1967 referendum that succeeded in removing from the constitution two references discriminating against indigenous Australians. Gail’s exhibition of new works and earlier pieces are a reflection of the changes witnessed over this passage of time in a broader sense, but also of her own personal growth as an artist. The Eddie Koiki Mabo Library Art Exhibition is held on the anniversary of the naming of the University Library on the Townsville Campus after Eddie Koiki Mabo (b. June 29, 1936 - d. January 21, 1992). Eddie Koiki Mabo was a Torres Strait Islander man from Murray Island (traditional name, Mer) and a long-time resident of Townsville. He is well-known as a land rights activist and was the lead plaintiff in what has become known as the Mabo Cases I and II. In 1982, he and several other Mer Islanders - Sam Passi, David Passi, Celuia Mapo Salee and James Rice - started a legal action that lasted 10 years. On June 3, 1992, a decision was handed down in the High Court of Australia in favour of the plaintiffs. This overturned the concept of terra nullius (no man’s land) that underpinned the Crown’s claim to own all the land of Australia. Sadly, Mr Mabo passed away five months before the decision was made. Eddie Koiki Mabo was one of the most important historical figures to have spent time at the University. Employed at JCU as a groundsman, he was also a student, guest lecturer, and colleague and friend of JCU staff and students. Several catalyzing moments that led to the Mabo cases are acknowledged to have occurred at the University. These include conversations with his friends, the historians Henry Reynolds and Noel Loos; and a 1981 conference where he delivered a speech that sparked the interest of lawyers (Butt, Eagleson & Lane, 2001; Loos & Mabo, 2013; Screen Australia Digital Learning, 2008; Sharp, 1996). In 2008, JCU Vice-Chancellor, Sandra Harding noted that the naming of the library will “forever commemorate the link between the man who changed the land laws in Australia and James Cook University.” The Art Exhibition: An exhibition of the artworks of Gail Mabo, his daughter, was held on the first anniversary of the naming of the Eddie Koiki Mabo Library. Library and Information Services staff endeavour to hold an annual Indigenous art exhibition in commemoration from May 21st for three weeks to coincide with National Sorry Day (May 26), National Reconciliation Week (May 27 to June 3), and Mabo Day (June 3). The event enables Library and Information Services staff, students and visitors the opportunity to participate in the JCU Reconciliation Action Plan in a broad public manner. As a vibrant celebration, the exhibition enlivens our public space and generates conversation not only about the art but also the building name, the man behind it, the importance of Aboriginal and Torres Strait Islander peoples, and to recognise and value cultural diversity as an asset which enriches the life of the university community. On May 21, 2008, JCU launched its Reconciliation Statement and, to give effect to the University’s commitment to reconciliation, the University named the University Library on the Townsville Campus after Eddie Koiki Mabo. The Hon Jenny Macklin MP, Minister for Families, Housing, Community Services and Indigenous Affairs unveiled the commemorative plaque that bestows his name on the library where he spent many productive hours reading, studying and researching law and land rights.

Shell, Hoechst Celanese face $7 billion lawsuit

An Alabama state judge has certified a national class-action lawsuit against Hoechst Celanese and Shell Chemical for at least $7 billion in damages, past and potential, from breaks or leaks in polybutylene plumbing systems. A Hoechst Celanese attorney says the company will appeal in the Alabama Supreme Court the ruling of Judge Eddie Hardaway of Greene County State Circuit Court in Eutaw. Shell says it is also considering an appeal. Shell has supplied polybutylene resins to water pipe manufacturers, and Hoechst Celanese has provided acetal resins to manufacturers of pipe fittings. Lead plaintiff attorney Roe Frazer of Langston, Frazer, Sweet & Freese in Jackson, Miss., charges that plumbing made from resins supplied by the two firms has burst in thousands of homes, costing homeowners millions of dollars in repairs. Moreover, he tells C&EN, as pipes age, the potential rises for pipe failure and water damage. He notes that the majority of polybutylene plumbing systems were ...