Saturday, May 4, 2013

Company Cannot Assert Attorney-Client Privilege Against Its Director, Delaware Court Holds

Plaintiff is a director of the defendant Company, a Delaware corporation, and he owns an entity that was the Company's largest shareholder. The remaining directors of the Company are also defendants. The Board of Directors established a Special Committee to explore strategic alternatives for the Company. Plaintiff was a member of the Special Committee. Later, the entity owned by Plaintiff announced it would nominate candidates for election at the Company's annual meeting. The defendants then secretly "sprang into action" and 11 days later, Company counsel notified Plaintiff by email that a special Board meeting would occur the next day to approve a recapitalization in which an entity controlled by one of the defendants would emerge as the largest shareholder of the Company. At meetings of the Special Committee and the Board of Directors the next day, the recapitalization was approved over Plaintiff's negative vote. The day after that, the Company announced the recapitalization and also announced that it was postponing the annual meeting and deferring the record date. That same day, Plaintiff filed suit challenging the recapitalization and the postponement of the annual meeting and record date.

Plaintiff subpoenaed counsel to the Company and to the Special Committee for documents relating to the planning and scheduling of the special meetings and the structuring of the recapitalization. Defendants asserted the attorney-client privilege and work product protection.

The court granted Plaintiff's motion to compel, holding that until the day the Board voted to approve the recapitalization, the Company could not assert either privilege against Plaintiff, who was a director of the Company. After the Board voted to recapitalize, however, sufficient adversity existed between Plaintiff and the Company such that Plaintiff could no longer have a reasonable expectation that he was a client of the Board's counsel. Kalisman v. Friedman, 2013 Del. Ch. LEXIS 100 (Delaware Court of Chancery, April 17, 2013).


May 4, 2013 in Discovery, Recent Decisions, State Courts | Permalink | Comments (0)

Friday, May 3, 2013

Balkin on Erie

Over at Balkinization, Prof. Jack Balkin (Yale) has a post entitled Erie Railroad v. Tompkins and the New Deal Constitution. It begins:

Last week Richard Epstein and I were on a panel at AEI on the New Deal Constitution, commemorating the 75th anniversary of the decisions in Erie Railroad v. Tompkins and United States v. Carolene Products.  The video is available here.  Michael Greve kicks it off with a fifteen minute introduction to the two cases; Richard's talk begins about 14:30, and my talk begins about 24:55.  I discussed both Erie and Carolene Products in my talk; in this blog post, I will say a few words about Erie.

Erie is often associated with the New Deal, because it resulted in a kind of federal judicial restraint.  Henceforth, federal courts had to defer to state common law decisions in diversity cases. Nevertheless, in my talk, I pointed out that Erie's connection to New Deal ideas was quite contingent.  If Erie had been decided in 1948, after Darby and Wickard, rather than in 1938, the course of history might have looked very different.  It might not have seemed all that important to overrule Swift v. Tyson, and Erie might have come out the other way.


May 3, 2013 in Federal Courts, Supreme Court Cases, Weblogs | Permalink | Comments (0)

Wednesday, May 1, 2013

Ninth Circuit Requires Evidentiary Hearing on Enforceability of Forum Selection Clause

            Pro se plaintiff Robin Petersen was recruited to work in Saudi Arabia as a flight instructor for a subsidiary of Boeing Corporation.  His complaint alleged that on arrival in Saudi Arabia, he was forced to sign an employment agreement which he was not given time to read and which he was told he must sign or else return immediately to the U.S. at his own expense.  This agreement contained a forum selection clause requiring any contractual disputes to be resolved in the Labor Courts of Saudi Arabia.  Petersen then alleged a series of wrongful incidents in Saudi Arabia perpetrated by his employer. Finally returning to the U.S. after the intervention of the U.S. Consulate, he filed suit alleging breach of contract and other claims.  He submitted an affidavit along with his complaint claiming that he was not financially capable of returning to Saudi Arabia to pursue the lawsuit, that he would be subject to harsh conditions there, and that the forum selection clause was foisted on him through fraud and undue pressure.  He also submitted a report from the U.S. Department of State indicating that, among other things, he would not be able to obtain a fair trial in Saudi Arabia.

            The district court dismissed the lawsuit without a hearing under Rule 12(b)(3), holding the forum selection clause enforceable.  The district court also denied leave to amend the complaint, although plaintiff submitted additional information indicating that he would not even be eligible for a visa to Saudi Arabia.

            The Ninth Circuit reversed and remanded for an evidentiary hearing.  Under M/S Bremen v. Zapata Off-Shores Co. and Carnival Cruise Lines, Inc. v. Shute, a forum selection clause may be unenforceable if, for example, “the inclusion of the clause in the agreement was the product of fraud or overreaching,” or “the party wishing to repudiate the clause would effectively be deprived of his day in court were the clause enforced.”  The court held that the complaint and other materials raised an issue of fact as to whether the forum selection clause was enforceable under Bremen, thus requiring an evidentiary hearing, and that the district court abused its discretion by denying leave to amend the complaint. Petersen v. Boeing Co.,, No. 11-18075 (9th Cir. April 26, 2013).


May 1, 2013 in Recent Decisions | Permalink | Comments (0)

Tidmarsh on Lemos & Hensler on Adequate Representation in Parens Patriae Suits by State A-Gs

Now available on the Courts Law section of JOTWELL is an essay by Jay Tidmarsh (Notre Dame) entitled Adequacy and the Attorney General. It reviews a recent article by Maggie Lemos (Duke), Aggregate Litigation Goes Public: Representative Suits by State Attorneys General, 126 Harv. L. Rev. 486 (2012), and a response by Deborah Hensler, Goldilocks and the Class Action, 126 Harv. L. Rev. F. 56 (2012).


May 1, 2013 in Recent Scholarship, Weblogs | Permalink | Comments (0)

Tuesday, April 30, 2013

Call For Papers: First Annual Workshop for Corporate & Securities Litigation

See below for details...

The University of Illinois College of Law and the University of Richmond School of Law invite submissions for the First Annual Workshop for Corporate & Securities Litigation.  This workshop will be held on Friday, November 8, 2013, in Chicago, Illinois.

OVERVIEW: This annual workshop will bring together scholars focused on corporate and securities litigation to present their works-in-progress.  Papers addressing any aspect of corporate and securities litigation or enforcement are eligible.  Appropriate topics include, but are not limited to, securities litigation, fiduciary duty litigation, or comparative approaches to business litigation.  We welcome scholars working in a variety of methodologies, including empirical analysis, law and economics, law and sociology, and traditional doctrinal analysis.

Authors whose papers are selected will be invited to present their work at a workshop hosted by the University of Illinois College of Law in Chicago, Illinois, on Friday November 8, 2013. Local costs (lodging and workshop meals) will be covered.  Participants are asked to pay for their own travel expenses. 

The workshop is designed to maximize discussion and feedback. All participants will have read the selected papers.  The author will provide a brief introduction to the paper, but the majority of the individual sessions will be devoted to collective discussion of the paper involved. 

SUBMISSION PROCEDURE: If you are interested in participating, please send an abstract of the paper you would like to present to Jessica Erickson at  not later than Friday, May 31, 2013.  Please include your name, current position, and contact information in the e-mail accompanying the submission. Authors of accepted papers will be notified by Friday, June 28.   

Questions: Any questions concerning the workshop should be directed to the organizers—Professor Verity Winship ( and Professor Jessica Erickson (


April 30, 2013 in Conferences/Symposia | Permalink | Comments (0)