Alison Frankel

Dish Network’s corporate governance problem

Alison Frankel
Sep 26, 2013 20:57 UTC

In a board meeting on July 21, the satellite television company Dish Network disbanded a two-member independent committee that had been established in May to vet Dish’s $2.2 billion bid for the spectrum licenses of the bankrupt company LightSquared. A few days later, one of the directors on the committee, Gary Howard, resigned from the board in what The Wall Street Journal has reported to be a protest over the abrupt end of the special committee, whose members expected to have an ongoing role in the bidding process for LightSquared’s licenses. Dish’s directors – including majority shareholder Charles Ergen – have said that the independent committee’s work ended when the company finalized its stalking-horse offer in LightSquared’s Chapter 11. But shareholders in a derivative suit in state court in Las Vegas say that’s not why Ergen and his allies on Dish’s board ditched the independent committee. They claim that Ergen was looking out for his own conflicting interest as the holder of $1 billion in LightSquared debt. According to the shareholders, Dish’s “fundamental corporate governance breakdown” has endangered the company’s bid for LightSquared’s licenses and exposed Dish to liability for interfering with LightSquared bankruptcy.

At a hearing last Thursday on shareholders’ motion for a preliminary injunction barring Ergen from participating in the LightSquared bidding process, lawyers for the company told Clark County District Court Judge Elizabeth Gonzalez that Ergen and the board have the exact same interests as outside shareholders. They also said, however, that Dish has formed another independent committee, this one to weigh the outside shareholders’ allegations. Meanwhile, at least three other shareholders filed their own derivative suits last week, one also in state court in Nevada, where Dish is incorporated, and two in federal district court in Colorado, where the company is headquartered. At the very least, Dish’s impetuous disbanding of the original independent committee is going to cost the company a fortune in director time and legal fees (in addition to Las Vegas firms, the company and board are represented by Sullivan & Cromwell and Ergen by Willkie Farr & Gallagher). And if shareholders’ direst predictions come true, Ergen’s supposedly untoward influence on the company could cost Dish the LightSquared spectrum licenses it so badly wants.

Ergen began acquiring LightSquared debt after the wireless networking company, which is backed by Philip Falcone and his Harbinger Capital hedge fund, entered Chapter 11 in May 2012. The Dish chairman is now LightSquared’s biggest creditor, holding more than $1 billion in secured debt. He’s also involved in bitter litigation with Harbinger, which sued Dish and Ergen in August, claiming manipulation of the bankruptcy process. Harbinger wants to hold onto LightSquared’s valuable licenses in the company’s reorganization, so it is trying to block Ergen and Dish from acquiring them. LightSquared, moreover, wants to disallow Ergen’s debt, claiming he acquired it improperly.

For shareholders in the derivative litigation, the first big question is whether Ergen’s LightSquared debt spree was for his own benefit or Dish’s. Shareholders represented by Bernstein Litowitz Berger & Grossmann and MPRI argued earlier this month in an amended complaint and motion for a preliminary injunction that Ergen improperly inserted himself into the LightSquared Chapter 11 because he knew, as Dish’s chairman, that Dish placed a high value on LightSquared’s spectrum licenses. Effectively, they accuse Ergen of driving up the cost of the licenses for his own profits on LightSquared debt. Ergen, however, has said in response to shareholder assertions that LightSquared would not permit Dish to buy its debt, so he bought it instead. In fact, he has argued, it would make no sense for him to do anything that would cost Dish shareholders money, since he owns 52 percent of Dish’s equity. “No rational person would risk losing billions in Dish for the sake of making millions in LightSquared debt,” Ergen’s brief said.

Ergen placed his own $2 billion bid for LightSquared in May 2013, whereupon Dish set up a two-member independent committee to evaluate its options. (Shareholders say it’s a mark of Ergen’s iron-fisted control of the company that only two of Dish’s eight directors could be appointed to the independent committee.) According to the shareholder suit and The Wall Street Journal, the directors on the independent committee – Gary Howard and Stephen Goodbarn – expected the committee to continue to represent Dish as the LightSquared spectrum license auction continued. (It’s scheduled to conclude in December.) Shareholder counsel Mark Lebovitch of Bernstein Litowitz told Judge Gonzalez last week that Howard and Goodbarn toyed with the idea of requiring Ergen to turn over some of his profits on LightSquared debt to Dish public shareholders. Shareholders have also suggested that the special committee directors may have contemplated a deal with LightSquared that would have included a haircut on Ergen’s secured debt. (Ergen’s lawyers have called that argument a red herring, asserting that Ergen will be paid in full under any contemplated LightSquared reorganization plan.)

In 8th Circuit liquor case, 21st Amendment beats Commerce Clause

Alison Frankel
Sep 25, 2013 20:54 UTC

The 21st Amendment of the U.S. Constitution, which repealed Prohibition but also gave states the right to enact laws regulating the import and distribution of liquor within their borders, was ratified in December 1933. Within three years, the U.S. Supreme Court was confronted for the first time with a constitutional dilemma that courts are still trying to resolve a full 80 years after the amendment took effect: Since the Commerce Clause prohibits discrimination against out-of-state businesses, how can the 21st Amendment permit states to treat in-state liquor companies differently from those outside of their borders? On Wednesday, the 8th Circuit Court of Appeals issued the latest installment in this long-running saga, upholding the constitutionality of Missouri’s requirement that officers and directors of licensed liquor wholesalers reside in Missouri.

That’s the second big federal circuit win for state liquor regulators since the Supreme Court last considered the intersection of the Commerce Clause and the 21st Amendment, in the 2005 case of Granholm v. Heald. Ironically, the high court’s Granholm opinion held that New York and Michigan restrictions on sales by out-of-state wineries violate the Commerce Clause because they distinguish between in-state and out-of-state alcohol producers. But the court also said in dicta that the states’ tiered systems of regulation, which separately address alcohol producers, importers and wholesalers, are not unconstitutional. The court drew a distinction between state laws involving alcohol production and those involving alcohol distribution, concluding that problems arise when state policies enacted under the 21st Amendment interfere with out-of-state alcohol producers protected by the Commerce Clause. “State policies are protected under the 21st Amendment when they treat liquor produced out of state the same as its domestic equivalent,” the Supreme Court said. “In contrast, the instant cases involve straightforward attempts to discriminate in favor of local producers.”

In 2009, the 2nd Circuit Court of Appeals underlined Granholm’s language on states’ rights to regulate alcohol distribution when it ruled in Arnold’s Wine v. Boyle that New York may bar out-of-state wine distributors from selling directly to New York residents. The appeals court said that New York’s system includes no favoritism for alcohol produced in New York over alcohol produced in other states – all liquor can be distributed only by licensed sellers – so it complies with the Supreme Court ruling. “Granholm validates evenhanded state policies regulating the importation and distribution of alcoholic beverages under the 21st Amendment,” the appeals court said. “It is only where states create discriminatory exceptions to the three-tier system, allowing in-state, but not out-of-state, liquor to bypass the three regulatory tiers, that their laws are subject to invalidation based on the Commerce Clause.”

In new Libor case, credit union agency bets on antitrust revival

Alison Frankel
Sep 24, 2013 19:15 UTC

On Monday, the National Credit Union Administration filed the latest blockbuster complaint based on banks’ manipulation of the benchmark London Interbank Offered Rate. On behalf of five failed corporate credit unions that held tens of billions of dollars of financial instruments with Libor-pegged interest rates, the federal agency – like so many duped investors before it – claims that Libor panel banks conspired to suppress their reported borrowing costs to the British Bankers’ Association, which supervised the benchmark average of reported rates. NCUA contends that because traders at Libor banks schemed to depress rate reports, the credit unions received less interest income than they were entitled to. The agency also raises the familiar accusation that as a result of artificial Libor suppression, the panel banks appeared healthier than they really were. NCUA asserts the same cause of action for this alleged (and in some cases admitted) misbehavior that we’ve seen in the big over-the-counter investors’ Libor class action and a host of suits by cities and counties that claim to be victims of Libor rate-rigging: antitrust violations under the Sherman Act and related state laws.

That’s quite an interesting calculation by NCUA and its lawyers at Kellogg, Huber, Hansen, Todd, Evans & Figel; Korein Tillery; and Stueve Siegel Hanson. As you surely recall, the judge overseeing the consolidated Libor multidistrict litigation, U.S. District Judge Naomi Reice Buchwald of Manhattan, does not believe that the alleged conspiracy to suppress Libor constitutes an antitrust violation. In a shocker of a ruling last March, Buchwald dismissed class action antitrust claims, finding that investors couldn’t show any antitrust injury from Libor manipulation because the supposed rate-rigging was not designed to impede competition amongst the banks. After Buchwald’s ruling, some alleged Libor victims, particularly those represented by Quinn Emanuel Urquhart & Sullivan, opted to emphasize securities claims over antitrust violations. Others, most notably the municipalities represented by Cotchett, Pitrie & McCarthy, are still pushing antitrust as their first cause of action. NCUA and its lawyers have had a lot of success in pioneering mortgage-backed securities litigation, so it’s notable that the agency has chosen the latter route. (I should note that NCUA filed its complaint in federal court in Kansas, but the suit is almost certain to consolidated in the Libor MDL and transferred to Buchwald for pre-trial rulings.)

Clearly, the agency is hoping that Judge Buchwald will change her mind about Libor antitrust claims – a dim prospect, as I’ll explain – or that the 2nd Circuit Court of Appeals has a different view of antitrust injury than she does. Either way, NCUA is apparently so confident that antitrust will be restored as a cause of action for Libor rate-rigging that it is only asserting antitrust claims, eschewing alternative fraud or securities causes of action.

For file-sharing sites, old songs are big new problem

Alison Frankel
Sep 23, 2013 20:17 UTC

Off the top of your head, do you know whether the Jim Croce hit “Bad, Bad Leroy Brown” was recorded before February 15, 1972? How about Don McLean’s “American Pie”? Thankfully, most of us don’t need to clog our brains with the knowledge that Croce’s song was third on Billboard’s year-end chart in 1973 and McLean’s, recorded in late 1971, was third on the 1972 chart. But then, most of us aren’t Internet service providers that rely upon the safe harbor protections of the Digital Millennium Copyright Act of 1998. For Internet sites engaged in any kind of file-sharing, there’s now a deep gulch of potential liability dividing songs that came out before and after February 1972, when Congress passed the Copyright Act. And unless Congress acts to fill in the gap, video-sharing sites have to be very concerned about permitting users to upload files containing any old songs at all, for fear that they predate the Copyright Act.

That’s the consequence of a summary judgment ruling last week by U.S. District Judge Ronnie Abrams of Manhattan, in a case brought by recording companies against the video-sharing site Vimeo. Abrams ruled that although Vimeo is broadly entitled to DMCA safe harbor protection, the music companies may proceed with claims based on 55 potentially infringing videos either uploaded or otherwise publicly acknowledged by Vimeo staffers. The recording companies didn’t alert Vimeo that any of the videos breached copyrights, but the judge said that Vimeo staff may have known the IP was infringed or else disregarded red-flag warnings about misuse of copyrighted material. Judge Abrams also said that regardless of Vimeo’s anti-infringement policies and actions, there simply is no safe harbor under the DMCA when it comes to common-law copyright misappropriation claims based on songs that predate the federal Copyright Act. In combination, Abrams’ findings mean that Internet sites have no easy escape from litigation over files containing old songs, even when copyright owners don’t provide notice of infringement. If the ruling holds up, it would make more sense for sites simply to ban potentially actionable files rather than try to figure out whether songs in user-uploaded files were recorded before or after February 1972.

As Abrams explained in her decision, she is not the first court to consider the DMCA’s safe harbor protection for pre-1972 songs. In October 2011, her Manhattan federal court colleague William Pauley reached a different conclusion from Abrams in Capitol Records v. MP3tunes. The recording companies in the MP3 case, like those in the Vimeo case, argued that the DMCA can only protect defendants from federal copyright claims, not state or common-law claims, because the Copyright Act specified that it does not annul or limit IP rights that existed before its passage in 1972. Judge Pauley found that to be too cramped a reading of the Copyright Act. In context, he said, it’s clear that the Copyright Act wasn’t intended to prohibit all regulation of pre-1972 recordings; the law’s language on “infringement of copyrights” is meant to encompass violations of both federal and state protections, Pauley wrote. So the DMCA’s safe harbor, according to Pauley, similarly extends to alleged state and federal violations.

New worry for patent infringement defendants: antitrust claims

Alison Frankel
Sep 20, 2013 17:49 UTC

Patents are by their very nature anticompetitive. Patent holders, after all, enjoy a limited-time monopoly on their products, during which they and they alone are legally permitted to profit from their innovation. When antitrust claims rear up in the context of patent law, they’re almost always brought against patent holders that supposedly abused their monopoly power to stifle competition, whether by falsely asserting patents to scare off rivals or by refusing to license their technology. But a counterintuitive $113 million (before trebling) verdict Thursday by federal-court jurors in Marshall, Texas, shows that patent holders can successfully wield allegations of infringement to bolster their own antitrust claims.

The verdict came in an antitrust and false advertising case that Retractable Technologies brought against Becton Dickinson, its much-larger rival in the market for syringes, catheters and other disposable medical products. For more than a decade, Retractable has asserted that BD engaged in illegal tactics to squelch demand for Retractable’s superior products. The two companies reached an antitrust settlement in 2004, but a few years later Retractable returned to court with a new set of accusations. In addition to antitrust claims, the new suit included allegations that BD infringed Retractable’s patents on a safety syringe. The case tied the two sets of claims together with an argument that one of BD’s anticompetitive tactics was to flood the market with a cheaper knockoff of Retractable’s syringe.

The patent infringement and antitrust cases were eventually severed, which gave BD’s lead counsel at Paul, Weiss, Rifkind, Wharton & Garrison an opportunity to argue in a motion for partial summary judgment in the antitrust case that no federal court has ever countenanced antitrust claims based on patent infringement – which, by definition, increases competition by introducing additional products to the market. (Unfortunately, all of the briefing directly addressing this point is sealed, but you can get a flavor for BD’s argument in a motion for leave to file the summary judgment brief.) “To permit the jury to consider patent infringement as a form of anticompetitive conduct under the Sherman Act would break from precedent and directly contradict 5th Circuit law,” BD asserted. “No court in any jurisdiction has ever found that patent infringement is anticompetitive conduct for purposes of the antitrust laws. Rather, every court to have considered whether patent infringement can harm competition for antitrust purposes has rejected that claim as a matter of law.” In particular, BD pointed to the 5th Circuit’s 1978 ruling in Northwest Power Products v. Omark, which quoted an even older 5th Circuit holding that “patent infringement is not an injury cognizable under the Sherman Act precedent.”

Don’t get too excited about JPMorgan’s admissions to the SEC

Alison Frankel
Sep 19, 2013 19:18 UTC

The Securities and Exchange Commission was pretty darn pumped about its $200 million settlement Thursday with JPMorgan Chase, part of the bank’s $920 million resolution of regulatory claims stemming from losses in the notorious “London Whale” proprietary trading. And why not? As George Cannellos, the co-director of enforcement, said in a statement, JPMorgan’s $200 million civil penalty is one of the largest in SEC history. The agency also showed that it’s serious about its new policy of demanding admissions of liability from some defendants. For those of us accustomed to the SEC’s “neither admit nor deny” boilerplate, it’s startling to see the words “publicly acknowledging that it violated the federal securities laws” in an SEC settlement announcement. So let’s permit Cannellos some chest-thumping: “The SEC required JPMorgan to admit the facts in the SEC’s order – and acknowledge that it broke the law – because JPMorgan’s egregious breakdowns in controls and governance put its millions of shareholders at risk and resulted in inaccurate public filings.”

Until the SEC changed its policy in June, enforcement officials had insisted that defendants wouldn’t settle with the agency if they had to admit liability because they feared the collateral consequences of their admissions in private shareholder class actions. JPMorgan is in the midst of fierce litigation with its shareholders, who claim the bank lied about its Chief Investment Office in public filings dating back to 2010. So you might assume that the bank’s SEC admissions seal their win, and now it’s just a matter of how big a check JPMorgan will have to write to settle the case.

But if you look closely at what JPMorgan actually admitted, you’ll see that the SEC settlement won’t be of much use to shareholders in the class action. Don’t misunderstand me: JPMorgan is extremely unlikely to escape from the private shareholder case without paying a lot of money. That’s not because of the SEC settlement, however. As I’ll explain, the bank’s lawyers did a very good job of tailoring JPMorgan’s admissions to the SEC to minimize their impact in the class action. In fact, I suspect that future SEC defendants are going to look at the JPMorgan settlement as a model for how to quench regulators’ thirst for blood without spilling a drop in parallel shareholder litigation.

N.Y. state appeals ruling opens courthouse door to foreign victims

Alison Frankel
Sep 18, 2013 20:06 UTC

In the last few months, the victims of supposed overseas human rights atrocities have begun to feel the impact of the U.S. Supreme Court’s ruling last April in Kiobel v. Royal Dutch Petroleum. As you know, the Supreme Court held that Alien Tort Statute cases cannot proceed in U.S. courts unless they have a significant connection to the United States. As a result, ATS claims by foreign citizens accusing international corporations of abetting torture and murder on foreign soil have since been dismissed against Daimler, Arab Bank, Rio Tinto and KBR. Some ATS cases have survived post-Kiobel scrutiny, as my friend Michael Goldhaber reported for The American Lawyer in August, and alleged victims can still assert claims under Other U.S. laws that specifically apply to conduct abroad. But without a doubt, Kiobel has extinguished the jurisdiction of U.S. courts over a wide swath of human rights litigation.

New York state courts, on the other hand, are ready and willing to hear the cases. Or, at least, that’s the implication of a comprehensive decision Tuesday by the state Appellate Division, First Department, that permits 50 Israeli citizens to proceed with claims that Bank of China is liable under Israeli law for facilitating bombings and rocket attacks in Israel by Hamas and Palestine Islamic Jihad. The state appeals court expressly broke with the 2nd Circuit Court of Appeals in holding that Israeli law should apply to the alleged victims’ claims because that’s where they were injured, rejecting the 2nd Circuit’s 2012 decision in a parallel terror-finance case that the laws of the defendant’s home jurisdiction should apply because those courts have the greatest interest in regulating the defendant’s conduct.

According to Robert Tolchin of The Berkman Law Office, who represents the plaintiffs in both the 2nd Circuit and New York state-court cases, the Appellate Division’s ruling opens the door to claims in New York courts by foreigners asserting the laws of their own countries against international defendants. “The Supreme Court in Kiobel knocked out the Alien Tort Statute, but here comes New York negligence law,” he said.

Want to ward off class actions? Follow Starbucks’ lead on class fees

Alison Frankel
Sep 17, 2013 19:31 UTC

This much is uncontested: In December 2008, Initiative Legal Group filed a wage-and-hour class action against Starbucks in federal court in Los Angeles. Lawyers at Initiative and, later, Capstone Law dedicated more than 8,000 hours to the case, which settled in May 2013 for $3 million. About 13,000 current and former Starbucks employees in California have made claims in the case, which resolves the coffee chain’s alleged failure to provide adequate meal breaks to workers when only two employees were on duty, as well as class assertions that Starbucks didn’t publish overtime rates on workers’ pay statements.

Lead class counsel Matthew Theriault and his colleagues believe they’re entitled to $4.2 million – roughly 90 percent of their total hourly billings for the effort they sank into the long-running case and the successful result they obtained for the class. Starbucks and its lawyers at Akin Gump Strauss Hauer & Feld are of quite a different mind. They contend that the $4.2 million request is “breathtakingly inflated,” considering that class counsel managed to win certification of only one of 13 alleged subclasses. Indeed, according to Starbucks, when you compare the $860 million valuation that plaintiffs lawyers initially put on their claims with the $3 million they ultimately recovered for the class, U.S. District Judge Gary Feess would be justified in awarding them absolutely nothing.

We can safely assume that a fair fee award to class counsel – which will be paid by Starbucks on top of the $3 million class settlement – lies somewhere between the extremes of zero and $4.2 million. But what’s much more interesting than the specific dollar amount Feess ultimately awards, and even more interesting than the arguments in support of and in opposition to class counsel’s fee request, is the mere existence of the fee dispute. As Theriault noted in class counsel’s brief, defendants in the vast majority of settled class actions do not contest fee requests by lawyers on the other side of the case. Instead, they agree in “clear sailing” provisions not to say anything when plaintiffs ask to be paid.

Big business, class actions and the Supreme Court: It’s complicated

Alison Frankel
Sep 16, 2013 19:40 UTC

It’s no secret that one of the most active and successful friend-of-the-court participants at the U.S. Supreme Court in recent years has been the U.S. Chamber of Commerce, otherwise known as the lobbying arm of corporate America. Last term, according to the website of the National Chamber Litigation Center (the U.S. Chamber’s legal wing), the group filed amicus briefs addressing the merits of 22 business-related cases before the Supreme Court. The Chamber was in the fray in all of the big cases involving class actions against businesses, including American Express v. Italian Colors, Amgen v. Connecticut Retirement, Comcast v. Behrend and, of course, Standard Fire v. Knowles. In all of those cases, the Chamber advocated positions that would make it tougher for claimants to file and litigate class actions; in three of them – Italian Colors, Comcast and Standard Fire – the Chamber and pro-business interests prevailed.

Given that record, I was surprised to see from the Supreme Court docket that the Chamber is sitting out one of this term’s major business cases, Mississippi v. AU Optronics, which will determine whether actions by state attorneys general to enforce state laws may proceed in state court or can be removed by defendants to federal court as mass actions under the Class Action Fairness Act. As you probably recall, last year the 5th Circuit Court of Appeals broke with the 2nd, 4th, 7th and 9th Circuits and held that the Mississippi AG’s antitrust suit against the LCD maker is a mass action because even though the AG is the only plaintiff, he’s actually seeking money damages on behalf of thousands of Mississippi residents. Mississippi’s AG, Jim Hood, successfully petitioned the Supreme Court to resolve the circuit split. AU Optronics wants to make Hood rue the court’s grant of certiorari. Its merits brief, filed earlier this month, argues that this case is the Supreme Court’s opportunity to unmask state AG parens patriae cases for what they really are: mass actions in all but name.

Last week, many of the usual suspects joined that argument in amicus briefs. The defense lawyers’ association DRI, as well as the American Bankers Association and Big Pharma’s trade group, told the justices that AG parens patriae cases permit those ever-wily plaintiffs lawyers to team up with state officials to evade Congress’s intention of forcing them to litigate contingency-fee class actions in federal court. (Allstate, which was the defendant in the case on which the 5th Circuit premised its AU Optronics holding, made a similar point in its amicus brief.) The Washington Legal Foundation and the National Association of Manufacturers, meanwhile, asserted that under constitutional protections for out-of-state defendants, Mississippi’s case should be litigated in federal court regardless of whether it’s a mass action. AG actions, as I’ve reported, are increasingly likely to be consumers’ only means of holding defendants accountable through litigation. If the Supreme Court decides that these cases must be heard in federal court, that’s a boon for big business.

Boards dodge bullet: Dela. justices retain limits on derivative suits

Alison Frankel
Sep 12, 2013 22:37 UTC

In July, the justices of the Delaware Supreme Court entertained oral arguments on a question the 9th Circuit Court of Appeals asked them to answer: Can shareholders maintain post-merger derivative claims against officers and directors whose alleged misconduct drove their company into a disadvantageous deal? In ordinary circumstances, shareholders lose the right to assert derivative breach-of-duty claims on behalf of the corporation when a merger ends their stock ownership. There’s only one exception to that rule of continuous ownership, under 30-year-old Delaware precedent, for sham mergers undertaken specifically to end the threat of liability against the board. But shareholders in a Los Angeles federal court case against Countrywide persuaded the 9th Circuit that the Delaware Supreme Court, in dicta in a separate but related Countrywide case, may have widened the exception. The federal appeals court asked the state court to clarify its position.

For corporate boards, there was considerable danger in this seemingly technical question. Corporate directors have duties to the companies they serve, but it’s exceedingly rare for companies to sue their own board members for breaching those duties. Shareholders are far, far more likely to bring breach-of-duty cases against directors, acting derivatively on behalf of the corporation. Merger announcements, for instance, are almost always followed by shareholder derivative suits asserting that the target company’s board didn’t get a good enough price. Derivative suits are very tough for shareholders to win, given Delaware’s deference to the business judgment of corporate boards, but they can be useful for leverage in settlement talks, especially when companies are eager to resolve M&A litigation and wrap up their deals. Corporations have leverage, too, however: If shareholders don’t settle derivative claims before deals go through, their cases are over because they no longer have standing to sue on behalf of the acquired corporation.

That delicate balance of power would shift if shareholders could continue to press their derivative cases after mergers go through, boosting the value of their cases and almost certainly guaranteeing more breach-of-duty complaints. Certainly, if the Delaware Supreme Court expanded the narrow exception permitting shareholders to maintain post-merger derivative claims, shareholders and corporate defendants would spend years in Chancery Court litigation to define the new borders of breach-of-duty litigation.