Yesterday, the Delaware Supreme Court released its decision in the Dell fee award appeal.  It’s available here.  The Dell case presents a question for blockbuster shareholder litigation–when the damages numbers in dispute grow particularly large, should courts apply a declining percentage when setting the attorneys’ fees?  (Disclosure, I joined an amicus brief on this issue at the trial level.)  The Dell plaintiffs secured a billion dollars in settlement.  Delaware’s Chancery Court opted to give the lawyers $267 million in fees.  

Ultimately, funds holding about 24% of the class objected to the fee award.  This is how the Delaware Supreme court stated their argument:

Pentwater argued that awarding a percentage of the settlement sought without considering the size of the settlement was unfair to the class. They contended that, in this case, the proposed fee was disproportionate to the value of the settlement. The objectors urged the court to apply a declining percentage to the fee award, which is similar to the approach used by federal courts in large federal securities law settlements. The declining percentage method reduces the percentage of the fee awarded to counsel as the size of the recovery increases. According to Pentwater, fee awards “are meant

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Wendy Gerwick Couture has posted a thoughtful article entitled, Nevadaware Divergence in Corporate Law.  It’s available here.  She presents some new perspectives on Nevada corporate law and emphasizes that Nevada has adopted a different policy balance than Delaware. She does this through three thorough sections analyzing exculpation, appraisal, and freeze-out mergers under both Nevada and Delaware law.  

This detailed focus gives some real insights.  She recognizes that many of the claims about Nevada exculpating for breaches of the duty of loyalty are overstated.  Nevada exculpates for breach of fiduciary duty under a single standard.  To the extent that any breach of the duty of loyalty involves any intentional misconduct, it would not be exculpated under Nevada law. It’s a much narrower category–unintentional breaches of the duty of loyalty–that may be exculpated under Nevada law.

She also recognizes that burden of proof differences in exculpation may shift outcomes.  Delaware places the burden of proof on a party seeking exculpation.  Nevada places the burden of proof on the party aiming to impose monetary liability.  This difference undoubtedly shifts litigation costs for many disputes.

If you’re interested in TripAdvisor case or other comparative corporate law issues, her work helps bring real…

And now another Texas District Court has stayed the Department of Labor’s Fiduciary Rule.  You can find the opinion here.  This followed closely on the heels of the first decision.  Both apply the 5th Circuit’s prior precedent from its case striking down its prior attempt at issuing a fiduciary rule in the space.

In an opinion released earlier today, Judge Kernodle of the Eastern District of Texas has stayed the rule from going into effect.  

Although I have not had time to sit and digest it at length, Chevron‘s demise plays a significant role.  Consider this passage:

In reviewing agency action under the APA, “[c]ourts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority” and should “set aside any [] action inconsistent with the law as they interpret it.” Loper Bright, 144 S. Ct. at 2261, 2273; see also Chamber, 885 F.3d at 369 (“A regulator’s authority is constrained by the authority that Congress delegated it by statute.”). A court should no longer defer to an agency’s interpretation of a statute but should decide for itself “whether the law means what the agency says.” Loper Bright, 144 S. Ct. at 2261 (overruling Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984)).

The Court thus owes no deference to DOL’s interpretation of ERISA, but rather “begins with the text” of the statute—as all courts do. E.g., Ross v. Blake, 578 U.S. 632, 638 (2016); United States v. Lauderdale Cnty., 914 F.3d 960,

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Andrew Jennings recently created a free tool to generate email alerts for SEC EDGAR filings.  It’s available here.  It’s a nifty website that doesn’t require any login or registration.  You just set up an alert and it’ll send you an email to confirm and manage the alert.  You can even let other people subscribe to your alert if you’re working with a team.

This is pretty useful if you’re tracking a sector and want to get filings sent to you or if you want to monitor all filings of a particular type–say cybersecurity incident 8-Ks.  The alert tool is probably highly useful for in-house counsel to keep tabs on other companies in their sector.

The Supreme Court’s Jarkesy decision is out.  Unsurprisingly, it hands the SEC yet another loss and rules that it cannot pursue relief for securities fraud claims before its administrative law judges because the Seventh Amendment entitles defendants to a jury trial.

Functionally, this significantly impairs the SEC’s ability to enforce the securities laws and drives much enforcement activity into federal district courts.  One of the benefits to having a specialized ALJ hear securities claims is that the process becomes much swifter for two reasons.  First administrative adjudication is more efficient.  Second, the SEC doesn’t need to explain what securities fraud is to a court used to hearing these claims.  Now, the SEC will have to spend more time and treasure on run-of-the-mill enforcement actions.  As the SEC has limited resources, this will substantially reduce how much they can do.

Much of the opinion revolves around the scope of the “public rights” exception to the Seventh Amendment.  The exception allows administrative tribunals to handle matters that historically could have been resolved by the executive and legislative branches.  The opinion recognizes that the public rights exception at least includes “the collection of revenue; aspects of customs law; immigration law; relations with Indian…

Sarah Haan recently led an effort to file an amicus in support of Maine’s effort to bar foreign governments from using business entities to make political contributions.  A copy of the amicus is available here.   I joined in good company alongside Gina-Gail S. Fletcher, George S. Georgiev, Andrew Jennings, Paul Rose, Faith Stevelman, Ciara Torres-Spelliscy, Anne M. Tucker, Cynthia A. Willliams, and Karen Woody.

Maine’s law set a 5% foreign-government-ownership threshold to bar corporations from political donations.  The District Court saw the 5% threshold as arbitrary.  The brief points out that many laws use a 5% ownership threshold to test for shareholder influence and that shareholders may wield significant influence over corporate policies with a 5% stake.

Although it didn’t make the final brief, this background section provides context:

On February 29, 2024, the U.S. District Court for the District of Maine granted Plaintiffs’ motion for preliminary injunction and enjoined a Maine law, “An Act to Prohibit Campaign Spending by Foreign Governments,” 21-A M.R.S. § 1064 (the “Act”). The Act prohibits any “foreign government-influenced entity” from making, directly or indirectly, a “contribution, expenditure, independent expenditure, electioneering communication or any other donation or disbursement of funds to influence the nomination or…