Class Action Gone Bad? – The Beginnings Of The Suit – Segment 2 Of 6
THE BEGINNINGS OF THE SUIT – Segment 2 Of A 6 Part Series
Segment 1 Class Action Gone Bad?
On February 19, 2007 it was announced that Sirius Satellite Radio and XM satellite Radio intended to merge. On March 14, 2007 Greg Brockwell, described in legal filings as a long time shareholder of Sirius, filed suit alleging in part that there was not enough information provided by the company for shareholders to make a fully informed decision as to whether or not to vote to approve the merger. The merger requires shareholder approval, and ultimately, information would be given to shareholders in the form of a proxy. It is this proxy, in part, that shareholders would base their merger vote upon.
The Timeline:
Sirius filed an 8K on February 20, 2007 detailing the February 19th press release that announced the proposed merger. This included information about a conference call to be held on February 20. 2007.
On February 21, 2007, Sirius filed an 8K with the SEC outlining that they were entering into a material agreement with XM satellite Radio.
On February 27, 2007, Sirius announced the operations results from their fourth quarter 2006 operating results. This filing and call was not merger specific, but some merger related information was discussed.
On March 1, 2007 Sirius filed their 10K with the SEC outlining their operational results for the year 2006. Again, this was not merger specific, but there was some merger related information discussed.
On March 13, 2007 Sirius filed an 8K with the SEC outlining that they had filed a Notification and Report Form pursuant to the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended, with respect to the transactions contemplated by the Agreement and Plan of Merger, dated as of February 19, 2007, between Sirius and XM Satellite Radio Holdings Inc. The filing is effective as of March 13, 2007. In this filing Sirius in bold print stated the following:
“INVESTORS AND SECURITY HOLDERS OF SIRIUS AND XM ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.”
On March 14, 2007 Greg Brockwell filed suit and made his allegations against Sirius Satellite Radio. Mr. Brockwell, as a “concerned shareholder” decided, at this point in time, PRIOR TO THE PROXY STATEMENT BEING ISSUED, that he already had enough information to bring forth his suit.
Mr. Brockwell brought his suit in State Court instead of Federal Court. Some may wonder why this matters. Well, Federal laws frown upon plaintiffs that seem to have a habit of bringing forth class action law suits. In point of fact, repeat plaintiffs are often barred from bringing forth any future litigation in federal court over a specified period of time. Having had 13 such suits where Mr. Brockwell is named as a plaintiff (I have been able to verify 13 cases); it is likely that this suit would never have made it to the first step in Federal Court given that Mr. Brockwell already has several class action suits to his credit.
One would imagine that Mr. Brockwell must have a pretty large stake in the company to be so “concerned” to have obtained council and brought a suit only three weeks into the merger process, without having even seen the proxy statement which would not be published until April 23, 2007 (5 weeks later). I have learned on good authority (as this process has continued) that Mr. Brockwell’s stake was/is ______* shares*. Now, to be fair, even one share gives you rights as a shareholder, but consider that at most the ______* share investment of Mr. Brockwell cost him under _______* (unless he bought before the recapitalization) and likely could well have been under _________*.
Does it strike you the reader as odd that such a small stake in a company would generate such grave “concern”? Does it strike the reader as odd that a _____* share investment is enough to gain lead plaintiff status? To be fair, perhaps _______* is a lot of money to Mr. Brockwell. After all, when you live in a ________* home, you likely have a sizable mortgage. Stop back to Sirius Buzz for more with our third segment of this series, The Plaintiff, Mr. Greg Brockwell. In case you missed it, here is the first segment, Class Action Gone Bad?
* We have been informed through a third or perhaps a fourth party that the lead Plaintiff and/or his law firm, Ruf Law, do not want certain information published. Everything in the original story is public information and available to readers who wish to take the time to investigate on their own. In fact, there is public information that we did not publish. Until such time that we obtain additional details, we have decided to redact certain information from the story. We apologize for any inconvienience. We encourage readers to become familiar with as much of the case as possible, and seek advice from legal professionals so that you can make a fully informed decision with respect to this suit.
Position – Long Sirius, Long XM
tyler glad to see this information is coming to pblic view…….
Yea, this ass wipe parisite, should be put in jail and fined so that when he gets out the only place he gets to go to, is a homeless shelter. This kind of shit makes me sick.
Has it been the same law firm each time?
Perhaps all of the shareholders from all of the companies that he has gone after can form a class action lawsuit against him and his law firm. Would that be sweet justice?
I was thinking the same thing Newman. Instead of a class action though, a shit load of seperate ones for different reasons keeping him and the law firm so busy, they wont have the time on their hands, that they must have now, that they need to do this kind of shit to keep them in business.
P.S., Also do it so that at least one, is in at least one of each of the 50 states.
Sounds good to me.
The problem is that you have to find the evidence that links to the smoking gun…
What is that? The paper trail from the Firms to Brockwell? That would definately be a good first step.
I’ve never seen a more inaccurate report in my life. I don’t know anything about this case or this “profession” (its professional) plaintiff. Everything you say could be true but your facts on the law are totally inaccurate. They file these deal cases in state court because that’s where they’re supposed to be in filed. In the company’s state of incorporation, usually Delaware which has never been a plaintiff friendly court.
Class action lawsuits may be brought in federal court if the claim arises under federal law, or if the claim falls under 28 USCA § 1332 (d). Under § 1332 (d) (2) the federal district courts have original jurisdiction over any civil action where the amount in controversy exceeds $5,000,000 and either 1. any member of a class of plaintiffs is a citizen of a State different from any defendant; 2. any member of a class of plaintiffs is a foreign state or a citizen or subect of a foreign state and any defendant is a citizen of a State; or 3. any member of a class of plaintiffs is a citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign state.[2] Nationwide plaintiff classes are possible, but such suits must have a commonality of issues across state lines. This may be difficult if the civil law in the various states have significant differences. Large class actions brought in federal court frequently are consolidated for pre-trial purposes through the device of multidistrict litigation (MDL).[citation needed] It is also possible to bring class action lawsuits under state law, and in some cases the court may extend its jurisdiction to all the members of the class, including out of state (or even internationally) as the key element is the jurisdiction that the court has over the defendant.
Typically, federal courts are thought to be more favorable for defendants, and state courts more favorable for plaintiffs. Many class action cases are filed initially in state court. The defendant will frequently try to remove the case to federal court. The Class Action Fairness Act of 2005[3] increases defendants’ ability to remove state cases to federal court by giving federal courts original jurisdiction for all class actions with damages exceeding $5,000,000, exclusive of interest and costs.[4] It should be noted, however, that the Class Action Fairness Act contains carve-outs for, ‘inter alia’, shareholder class action lawsuits covered by the PSLRA and those concerning internal corporate governance issues (the latter typically being brought as shareholder derivative actions in the state courts of Delaware, the state of incorporation of most large corporations).[5]
The procedure for filing a class action is to file suit with one or several named plaintiffs on behalf of a proposed class. The proposed class must consist of a group of individuals or business entities that have suffered a common injury or injuries. Typically these cases result from an action on the part of a business or a particular product defect or policy that applied to all proposed class members in a uniform manner. After the complaint is filed, the plaintiff must file a motion to have the class certified. In some cases class certification may require additional discovery in order to determine if the proposed class meets the standard for class certification.
Upon the motion to certify the class, the defendants may object to whether the issues are appropriately handled as a class action, to whether the named plaintiffs are sufficiently representative of the class, and to their relationship with the law firm or firms handling the case. The court will also examine the ability of the firm to prosecute the claim for the plaintiffs, and their resources for dealing with class actions.
Due process requires in most cases that notice describing the class action be sent, published, or broadcast to class members. As part of this notice procedure, there may have to be several notices, first a notice giving class members the opportunity to opt out of the class, i.e. if individuals wish to proceed with their own litigation they are entitled to do so, only to the extent that they give timely notice to the class counsel or the court that they are opting out. Second, if there is a settlement proposal, the court will usually direct the class counsel to send a settlement notice to all the members of the certified class, informing them of the details of the proposed settlement.
In federal civil procedure law, which has generally been accepted by most states (through adoption of state civil procedure rules paralleling the federal rules), the class action must have certain definite characteristics: (1) the class must be so large as to make individual suits impractical, (2) there must be legal or factual claims in common (3) the claims or defenses must be typical of the plaintiffs or defendants, and (4) the representative parties must adequately protect the interests of the class. In many cases, the party seeking certification must also show (5) that common issues between the class and the defendants will predominate the proceedings, as opposed to individual fact-specific conflicts between class members and the defendants and (6) that the class action, instead of individual litigation, is a superior vehicle for resolution of the disputes at hand.
CSTY….
Additionally, this suit was filed in New York even though Sirius is incorporated in Deleware. There were numerous venues where this particular class action could have been filed.