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Class Action / Shareholder Litigation

Class actions are a relatively recent development in the law, and allow numerous plaintiffs to bring a civil action collectively against one or more defendants. The class action rule allows plaintiffs to join together for efficiency purposes, and often allows plaintiffs with relatively small claims to afford to pursue litigation that might not make sense if each plaintiff had to pursue his or her case, individually.

A “consumer class action,” which follows these principles, is where a group of purchasers of products or services join together to remedy wrongs done to them, often by large corporations. A benchmark for whether a consumer class action may well be worth pursuing is whether the wrongdoer corporation has treated all members of the proposed “class” (i.e., all purchasers) in the same manner and legal injury has resulted from that uniform treatment.

Shareholder litigation has a number of forms. A shareholder can pursue his or her own claims, individually. This most typically happens to a shareholder of a company sought to be taken over by (or merged with) another company, and the shareholder believes the value offered for his or her shares is inadequate, or otherwise believes the proposed takeover process to be flawed or legally wrongful. Furthermore, shareholders have legal rights to the disclosure of all material information in such a proposed corporate transaction, and the failure to make such required material disclosure can be pursued, as well. In addition, the law allows a “derivative” remedy, whereby the shareholder sues on behalf of the company in certain circumstances. Derivative cases typically occur where the company’s directors have failed to protect the company’s legal interests, including cases of systematic management failure, breach of fiduciary duty by the directors, breach of the duty of loyalty by the directors, directors’ conflicting self-interests, and/or directors’ other wrongful conduct.

Examples of representations involving counsel of the firm in the shareholder / class action areas include the following:

As local counsel, plaintiff’s preliminary settlement of the shareholder class action arising out of Alpha Natural Resources, Inc.’s proposed acquisition of Foundation Coal Holdings, Inc., in the case Ascot Associates v. James F. Roberts, et al., Case No. 02-C-09-142316 (Circuit Court for Anne Arundel County).

Lead counsel and counsel for shareholders in numerous cases. Some examples include the federal securities case, Levie v. Sears Roebuck Co., 1:04-cv-07643 (U.S.N.D. Ill), as well as the following successfully settled shareholder cases: Blaz v. Pan Pacific Retail Properties, Inc., Case No. 03-C-06-008085 (Circuit Court, Baltimore County); Rice / Schwartz v. Lafarge North America, Inc., Case Nos. 268974 / 270410-V (Circuit Court, Montgomery County); In Re Mid-Atlantic Realty Trust Shareholders Litig., Case No. 03-C-03-006690 (Circuit Court, Baltimore County).

Appellate responsibilities in the case that would become, Shenker v. Laureate Education, Inc., 411 Md. 317, 983 A.2d 408 (2009), where the Maryland Court of Appeals defined the scope of direct shareholder litigation rights under Maryland law.

Claims of proposed investor class members alleging predatory breaches of fiduciary duty in In re: H & R Block, Inc. Express IRA Marketing Litigation (U.S.W.D. Mo., Case No. 4:06-md-01786-RED).

Successfully appealed a proposed class alleging consumer fraud claims before Maryland’s highest court, in Green v. H & R Block, 355 Md. 488, 735 A.2d 1039 (1999).

Prevailed on appeal in Schmerling v. IWIF, 368 Md. 434, 795 A.2d 715 (2002) on a class action involving the Maryland Wiretapping and Electronic Surveillance Act.