…in a nonprecedential opinion so don’t get too excited.

San Diego County Employees Retirement Association v. Johnson & Johnson represents the latest iteration of courts trying to figure out what the heck to do about fraud on the market class certification in the wake of the Supreme Court’s desperately confused Goldman Sachs Grp., Inc. v. Ark. Teacher Ret. Sys., 594 U.S. 113 (2021).

Plaintiffs alleged that J&J concealed asbestos in its talc products, resulting in multiple stock price drops as the truth dribbled out.  At class certification, J&J claimed it had rebutted the presumption of reliance by demonstrating that each allegedly corrective disclosure revealed no new information the market, and therefore could not have been responsible for the dissipation of artificial inflation.

I pause here to note that this is, I guess, the framework mandated by Goldman, but – as I have frequently screamed – it is both illogical and inconsistent with Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. 804 (2011) (Halliburton I). Specifically, even if J&J proves beyond a reasonable doubt that its fraudulent statements were never publicly corrected, that does not in any way shed light upon the question…

Yesterday, the Delaware Supreme Court released its opinion in Wong v. Amazon. A copy of the decision is here.

A stockholder sent a letter to Amazon, demanding to inspect books and records under Delaware’s Section 220. The stockholder’s stated purpose was to investigate Amazon’s possible wrongdoing and mismanagement by engaging in anticompetitive activities.

The request kicked of an extended legal battle. A Magistrate conducted a one-day trial that led to a report siding with Amazon that the the stockholder had not alleged a “credible basis” to infer possible wrongdoing by Amazon. The stockholder took exception. A Vice Chancellor also sided with Amazon, but on a different basis–finding that the stockholder’s purposes was overbroad, “facially improper,” and not lucid. The stockholder appealed and the Delaware Supreme Court reversed.

Under Delaware law, investigating corporate wrongdoing is a legitimate purpose, but stockholders must present “some evidence to suggest a credible basis from which a court can infer that mismanagement, waste or wrongdoing may have occurred.” The Supreme Court found that the Vice Chancellor had erred in its interpretation of the scope of the stockholder’s purpose and should have engaged “with the evidence presented by the [stockholder].”

On the evidentiary front, the…

We are writing today to inform you that Glass Lewis has made the difficult decision to initiate legal action against the Attorney General of Texas. In this letter, we explain the reasons why we are pursuing this legal path to protect our business and, by extension, our clients and the proxy voting industry, as a whole.

Over the last several months, Glass Lewis and other proxy advisors have been targeted by a variety of political detractors and corporate executives critical of our business model and the role we play in supporting institutional shareholders in carrying out their proxy voting responsibilities.

In fact, three states attorneys general have opened inquiries into supposed consumer fraud

I speak of Epicentrx, Inc. v. Superior Court, a case that I previously blogged about here.

Delaware entity, doing business in California.  A minority investor sues in California, alleging fraud, breach of fiduciary duty, and breach of contract.  Defendant corporation and controlling stockholder move to dismiss, on the grounds of a Delaware Chancery forum selection clause in both the charter and the bylaws.  Investor argues that California’s constitution confers a jury right that – per California precedent – cannot be contractually waived pre-dispute.  Therefore, investor claims, a forum selection clause that functionally results in a jury waiver (because the Court of Chancery sits without a jury) must also be invalid.  Investor also argues that the charter and bylaws are not binding because the internal affairs doctrine has no application here (fraud claims, for example, are not governed by the internal affairs doctrine), and the forum selection clauses were not freely adopted.

Since this is a topic I’ve written about (and written about and written about), the case had my attention.  In my previous post, I wrote, “one factor that makes constitutive documents noncontractual is that, as Boilermakers Local 154 Retirement Fund v. Chevron Corp., 73 A.3d…

Does everyone remember the summer of 2024, when the hot corporate topic was SB 313 and Delaware’s move to authorize shareholder agreements?  Much less discussed at the time, but still important, was the proposal to permit jilted merger targets to collect lost premium damages.  Delaware amended its corporation law to provide:

Any agreement of merger or consolidation governed by § 251 of this title… may provide: (1) That (i) a party to the agreement that fails to perform its obligations under such agreement in accordance with the terms and conditions of such agreement, … shall be subject, in addition to any other remedies available at law or in equity, to such penalties or consequences as are set forth in the agreement of merger or consolidation (which penalties or consequences may include an obligation to pay to the other party or parties to such agreement an amount representing, or based on the loss of, any premium or other economic entitlement the stockholders of such other party would be entitled to receive pursuant to the terms of such agreement if the merger or consolidation were consummated in accordance with the terms of such agreement)…

In other words, DGCL 261 overrides the…