I usually bail out of academic studies on litigation pretty quickly; if the data is stale or the papers don't seem to account for real-world tactics by plaintiffs' and defense lawyers, I don't bother to keep reading. That's why a just-released analysis by Matthew Cain, a finance professor at Notre Dame, and Steven Davidoff of Ohio State's Moritz College of Law, is such a rarity. The paper, titled A Great Game: The Dynamics of State Competition and Litigation, features up-to-the-minute commentary and a deep understanding of why lawyers do what they do.
It's probably not a coincidence that Davidoff moonlights as Dealbook's Deal Professor, where he tracks day-to-day developments in shareholder litigation. A Great Game opens with a look at the $300 million fee award Chancellor Leo Strine Jr. of Delaware Chancery Court bestowed on plaintiffs' lawyers in the Southern Copper case in December, and prominently mentions Strine's already-legendary comments at the November 2011 Columbia Law School conference on Chancery Court.
More importantly, Davidoff and Cain looked at the litigation spawned by 955 public deals, completed between 2004 and 2010 and valued at more than $100 million. From that hand-curated sample, they examined Securities and Exchange Commission filings, court filings, and other public documents to find out where cases were filed, whether they were dismissed or settled, what kind of benefits shareholders achieved in settlements, and what plaintiffs' lawyers were awarded in fees. They assembled the data into a series of charts and tables that show some significant trends in M&A shareholder litigation.