Opinion

Brigham Exploration Company, Ben M. Brigham, David T. Brigham, Harold D. Carter, Stephen P. Reynolds, Stephen C. Hurley, Hobart A. Smith, Scott W. Tinker, Statoil ASA and Fargo Acquisition, Inc. v. Raymond Boytim, Hugh Duncan, Robert Fioravanta, Walter Schwimmer, Michael Ohler, Ryan Ohler, Walter Ohler, Jr., the Edward J. Goodman Life Income Trust and the Edward J. Goodman Generation Skipping Trust, Jeffrey Whalen, and Howard Weisberg, Individually

Court: Texas Court of Appeals, 3rd District (Austin)
Filed: Sep 28, 2015
Status: Published
Cited by: 0 cases
Authority: More cited than 3.1%

if the moving party seeks to certify a predominance-of-common-questions action, the commonality determination under Rule 42(a) is subsumed under the predominance determination

How later courts described this case

if the moving party seeks to certify a predominance-of-common-questions action, the commonality determination under Rule 42(a) is subsumed under the predominance determination
plaintiff's "conscious intent" is immaterial to an acquiescence finding
"For the defense of acquiescence to apply, conscious intent to approve the act is not required .... "
finding, after class-wide trial, that the directors of Rural Metro Corp. had breached their fiduciary duties to a class of shareholders in connection with a sale of the company and that the Board's financial advisor had aided and abetted that violation

Written by the judges who cited it.

The opinion

ACCEPTED

03-15-00248-CV

7124709

THIRD COURT OF APPEALS

AUSTIN, TEXAS

9/28/2015 1:31:41 PM

JEFFREY D. KYLE

CLERK

No. 03-15-00248-CV

IN THE COURT OF APPEALS FOR THE FILED IN

3rd COURT OF APPEALS

THIRD DISTRICT OF TEXAS AT AUSTIN AUSTIN, TEXAS

9/28/2015 1:31:41 PM

BRIGHAM EXPLORATION COMPANY, BEN M. JEFFREY

BRIGHAM , D. KYLE

Clerk

DAVID T. BRIGHAM, HAROLD D. CARTER, STEPHEN P. REYNOLDS,

STEPHEN C. HURLEY, HOBART A. SMITH, SCOTT W. TINKER,

STATOIL ASA AND FARGO ACQUISITION, INC.,

Appellants,

RAYMOND BOYTIM, ET AL., INDIVIDUALLY AND ON

BEHALF OF OTHERS SIMILARLY SITUATED,

Appellees.

On Appeal from the 201st Judicial District Court of Travis County, Texas,

Trial Court Cause No. D-1-GN-11-003205

BRIEF OF APPELLANTS STATOIL ASA

AND FARGO ACQUISITION, INC.

BECK REDDEN LLP BECK REDDEN LLP

Gretchen S. Sween Russell S. Post

State Bar No. 24041996 State Bar No. 00797258

gsween@beckredden.com rpost@beckredden.com

Christopher R. Cowan Fields Alexander

State Bar No. 24084975 State Bar No. 00783528

ccowan@beckredden.com falexander@beckredden.com

515 Congress Avenue, Suite 1900 Parth S. Gejji

Austin, TX 78701 State Bar No. 24087575

(512) 708-1000 pgejji@beckredden.com

(512) 708-1002 (Fax) 1221 McKinney, Suite 4500

Houston, TX 77010

(713) 951-3700

(713) 951-3720 (Fax)

COUNSEL FOR APPELLANTS, STATOIL ASA AND FARGO ACQUISITION, INC.

Oral Argument Requested

IDENTITY OF PARTIES AND COUNSEL

Appellants: Counsel for Appellants:

Brigham Exploration Company Debora B. Alsup

Ben M. Brigham THOMPSON & KNIGHT LLP

David T. Brigham 98 San Jacinto Boulevard, Suite 1900

Harold D. Carter Austin, TX 78701

Stephen P. Reynolds

Stephen C. Hurley Timothy R. McCormick

Hobart A. Smith Michael Stockham

Scott W. Tinker Mackenzie Wallace

THOMPSON & KNIGHT LLP

(Defendants in the Trial Court) 1722 Routh Street, Suite 1500

Dallas, TX 75201

Statoil ASA Russell S. Post

Fargo Acquisition, Inc. Fields Alexander

Parth S. Gejji

(Defendants in the Trial Court) BECK REDDEN LLP

1221 McKinney Street, Suite 4500

Houston, TX 77010

Gretchen S. Sween

Christopher R. Cowan

BECK REDDEN LLP

515 Congress Avenue, Suite 1900

Austin, TX 78701

Appellees: Counsel for Appellees:

Raymond Boytim Randall J. Baron

David T. Wissbroecker

(Plaintiff in the Trial Court) Steven M. Jodlowski

ROBBINS GELLER RUDMAN & DOWD LLP

655 West Broadway, Suite 1900

San Diego, CA 92101

Samuel H. Rudman

Mark S. Reich

Michael G. Capeci

ROBBINS GELLER RUDMAN & DOWD LLP

58 South Service Road, Suite 200

Medville, NY 11747

Willie C. Briscoe

THE BRISCOE LAW FIRM, PLLC

8150 N. Central Expressway, Suite 1575

Dallas, TX 75206

Michael D. Marin

BOULETTE GOLDEN & MARIN LLP

2801 Via Fortuna, Suite 530

Austin, TX 78746

Hugh Duncan Samuel H. Rudman

Mark S. Reich

(Plaintiff in the Trial Court) Michael G. Capeci

ROBBINS GELLER RUDMAN & DOWD LLP

58 South Service Road, Suite 200

Medville, NY 11747

Joe Kendall

Daniel Hill

Jamie J. McKey

KENDALL LAW GROUP, LLP

3232 McKinney Avenue, Suite 700

Dallas, TX 75204

Michael D. Marin

BOULETTE GOLDEN & MARIN LLP

2801 Via Fortuna, Suite 530

Austin, TX 78746

Walter Schwimmer Evan J. Smith

Marc L. Ackerman

(Plaintiff in the Trial Court) BRODSKY & SMITH, LLC

Two Bala Plaza, Suite 602

Bala Cynwyd, PA 19004

Michael Ohler Hamilton Lindley

Ryan Ohler DUNNAM & DUNNAM L.L.P.

Walter Ohler, Jr. P.O. Box 8418

Waco, TX 76714

(Plaintiffs in the Trial Court)

The Edward J. Goodman Life Shane T. Rowley

Income Trust LEVI & KORSINSKY LLP

30 Broad Street, 24th Floor

(Plaintiff in the Trial Court) New York, NY 10004

Denis F. Sheils

KOHN, SWIFT & GRAF, P.C.

One South Broad Street, Suite 2100

Philadelphia, PA 19107

The Edward J. Goodman Hamilton Lindley

Generation Skipping Trust DUNNAM & DUNNAM L.L.P.

P.O. Box 8418

(Plaintiff in the Trial Court) Waco, TX 76714

Denis F. Sheils

KOHN, SWIFT & GRAF, P.C.

One South Broad Street, Suite 2100

Philadelphia, PA 19107

iii

Robert Fioravanti Katharine M. Ryan

Richard A. Maniskas

(Plaintiff in the Trial Court) RYAN & MANISKAS, LLP

995 Old Eagle School Road, Suite 311

Wayne, PA 19087

Kelly N. Reddell

THE REDDELL FIRM PLLC

100 Highland Park Village, Suite 200

Dallas, TX 75025

Howard Weissberg Patricia C. Weiser

James C. Ficaro

(Plaintiff in the Trial Court) THE WEISER LAW FIRM, P.C.

22 Cassatt Avenue

Berwyn, PA 19312

Jeffrey Whalen Patricia C. Weiser

James C. Ficaro

(Plaintiff in the Trial Court) THE WEISER LAW FIRM, P.C.

22 Cassatt Avenue

Berwyn, PA 19312

Trial Court: 201st District Court of Travis County, TX

Hon. Lora Livingston, Presiding

TABLE OF CONTENTS

Page

IDENTITY OF PARTIES AND COUNSEL ...........................................................................i

TABLE OF CONTENTS .................................................................................................. v

INDEX OF AUTHORITIES............................................................................................ vii

STATEMENT OF THE CASE ........................................................................................... x

STATEMENT REGARDING ORAL ARGUMENT ..............................................................xi

NOTE REGARDING CITATION......................................................................................xi

STATEMENT OF JURISDICTION .................................................................................. xii

ISSUES PRESENTED ................................................................................................... xii

INTRODUCTION ............................................................................................................ 1

STATEMENT OF FACTS ................................................................................................. 3

STANDARD OF REVIEW ................................................................................................ 8

SUMMARY OF THE ARGUMENT .................................................................................... 8

ARGUMENT ................................................................................................................. 9

I. The Trial Court Erred in Certifying the Aiding-and-Abetting

Claim. .................................................................................................... 9

A. The Named Plaintiffs Are Not Adequate Class

Representatives to Pursue an Aiding-and-Abetting

Claim Against Statoil. ................................................................. 9

1. Proving adequacy requires proof that class

representatives, not their lawyers, have specific

knowledge of relevant facts. ............................................. 9

2. The Named Plaintiffs did not prove their

adequacy to represent any class claims against

Statoil. ............................................................................. 12

B. The Named Plaintiffs’ Inadequacy Is Further

Highlighted by the Deliberate Lack of “Rigorous

Analysis” in the Trial Plan. ....................................................... 17

II. The Class Definition Fails Because It Contains Members

Who Could Not Have Sustained Any Injury in Fact. ......................... 19

A. A Class Must Be Defined So That All Members Have

Standing. ................................................................................... 20

B. The Class Definition Is So Broad That It Includes

Many Members Who Could Not Have Been Injured,

As a Matter of Law. .................................................................. 21

1. The class definition contains many members

with no standing to assert any breach of

fiduciary duty claim based on the allegedly

unlawful disclosures. ...................................................... 21

2. The class definition contains many members

with no standing to assert an aiding-and-

abetting claim against Statoil. ......................................... 23

C. Plaintiffs Have Tried to Obscure the Mismatch

Created by the Class Definition After Repeatedly

Tweaking That Definition. ........................................................ 23

CONCLUSION AND PRAYER ....................................................................................... 25

CERTIFICATE OF SERVICE .......................................................................................... 27

CERTIFICATE OF COMPLIANCE .................................................................................. 29

INDEX OF AUTHORITIES

Case Page(s)

Berger v. Compaq Computer Corp.,

257 F.3d 475 (5th Cir. 2001) .............................................................................. 10

In re BJ’s Wholesale Club, Inc. Shareholders Litig.,

2013 WL 396202 (Del. Ch. Jan. 31, 2013) ...................................................17, 18

Bowden v. Phillips Petroleum Co.,

247 S.W.3d 690 (Tex. 2008) ................................................................................ 8

City of Livonia Emps’ Ret. Sys. v. Boeing Co.,

711 F.3d 754 (7th Cir. 2013) .............................................................................. 11

DaimlerChrysler Corp. v. Inman,

252 S.W.3d 299 (Tex. 2008) .............................................................................. 20

In re Deepwater Horizon,

732 F.3d 326 (5th Cir. 2013) ........................................................................20, 25

In re Enron Corp. Securities Lit.,

529 F. Supp. 2d 644 (S.D. Tex. 2006) ................................................................ 11

Ford Motor Co. v. Sheldon,

22 S.W.3d 444 (Tex. 2000)................................................................................. 20

Forsyth v. Lake LBJ Inv. Corp.,

903 S.W.2d 146 (Tex. App.—Austin

1995, writ dismissed w.o.j.) ................................................................................ 10

Gen. Motors Corp. v. Bloyed,

916 S.W.2d 949 (Tex. 1996) ................................................................................ 9

Hunt v. Bass,

664 S.W.2d 323 (Tex. 1984) .............................................................................. 20

King v. City of Austin,

2004 WL 578940 (Tex. App.—Austin

Mar. 25, 2004, no pet.)........................................................................................ 10

In re Kosmos Energy Ltd. Securities Litig,

299 F.R.D. 133 (N.D. Tex. 2014) ...........................................................10, 11, 12

vii

M.D. Anderson Cancer Ctr. v. Novak,

52 S.W.3d 704 (Tex. 2001)................................................................................. 20

Malpiede v. Townson,

780 A.2d 1075 (Del. 2001) ................................................................................. 18

Morgan v. Cash,

2010 WL 2803746 (Del. Ch. July 16, 2010) ...................................................... 18

Polaris Indus. v. McDonald,

119 S.W.3d 331 (Tex. App.—Tyler

2003, no pet.) ...................................................................................................... 20

Riemer v. State,

392 S.W.3d 635 (Tex. 2012) ................................................................................ 8

In re Rural Metro Corp. Shareholders Litig.,

88 A.3d 54 (Del Ch. 2014) ................................................................................. 17

S.W. Bell Tel. Co. v. Mktg. on Hold Inc.,

308 S.W.3d 909 (Tex. 2010) ..........................................................................9, 10

Sw. Ref. Co. v. Bernal,

22 S.W.3d 425 (Tex. 2000).......................................................................8, 19, 25

In re Telecomms., Inc.,

2003 WL 21543427 (Del. Ch. July 7, 2003) ...................................................... 18

Tex. Dept. of Mental Health

& Mental Retardation v. Petty,

778 S.W.2d 156 (Tex. App.—Austin

1989, writ dism’d w.o.j.)..................................................................................... 20

STATUTES AND RULES

8 DEL. CODE § 253 ..................................................................................................... 6

TEX. CIV. PRAC. & REM. CODE § 51.014(a)(3) ....................................................... xii

TEX. R. APP. P. 39.1(d) ..............................................................................................xi

TEX. R. CIV. P. 42(a) ................................................................................................. 9

viii

OTHER AUTHORITIES

7A Wright & Miller,

FED. PRAC. AND PRO. § 1766

(3d ed. 2005) ....................................................................................................... 10

1 H. Newberg & A. Conte,

NEWBERG ON CLASS ACTIONS

§ 3:50 (5th ed. 2015) ............................................................................................. 9

STATEMENT OF THE CASE

Nature of the Case Class certification appeal. APP. 1 (Order).

This class action was brought by former shareholders of

Brigham Exploration Company (“Brigham”) in response

to an offer by Statoil ASA (“Statoil”) to buy Brigham.

CR4-55. The principal defendants are Brigham and the

Brigham directors who agreed to accept Statoil’s offer;

Plaintiffs allege that the Brigham Defendants sold cheap,

thereby injuring Brigham’s shareholders. CR5-7.

In addition, Plaintiffs sued Statoil and a related entity

(Fargo Acquisition, Inc.)1 for the successful acquisition.

Plaintiffs allege that Statoil struck too good a deal for

itself and in doing so aided and abetted a breach of the

Brigham directors’ fiduciary duties. Id.

Course of Proceedings During discovery, none of the class representatives was

able to state a viable basis for the claims against Statoil;

some did not even know they were suing Statoil.

Nevertheless, Judge Lora Livingston found them all to be

adequate class representatives and certified a class action.

APP. 1, APP. 3.

After a previous interlocutory appeal in which this Court

reversed class certification for lack of a valid trial plan,

APP. 2, Judge Livingston signed a new order certifying

the class and adopted a trial plan proposed by Plaintiffs

that barely discusses Statoil. APP. 1, APP. 3.

Trial Court Honorable Lora Livingston, presiding

201st Judicial District Court, Travis County, Texas

Disposition Below The trial court signed an order granting class certification

on April 9, 2015.

Fargo, a Delaware corporation wholly owned by Statoil, was formed solely to effectuate

Brigham’s acquisition. “Statoil” is used to refer to both Statoil and its subsidiary Fargo.

STATEMENT REGARDING ORAL ARGUMENT

Statoil respectfully requests oral argument. This is the second appeal of a

class certification order in this action; the first certification order was reversed.

The district court’s decision involves important questions regarding the standards

for adequacy of a class representative and for standing in a securities class action.

Therefore, oral argument will likely aid the Court. TEX. R. APP. P. 39.1(d).

NOTE REGARDING CITATION

The record citations are to the Reporter’s Record (RR), the Clerk’s Record

(CR), the first Supplemental Clerk’s Record (1SCR), second Supplemental Clerk’s

Record (2SCR), and the third Supplemental Clerk’s Record (3SCR).

The Clerk’s Record also includes exhibits the district clerk filed by hand.

Although part of the Clerk’s Record, they are not paginated. These documents

were initially filed with the district court under seal, but have since been unsealed.

APP. 3 contains “Exhibit 1” filed with the Court on June 5, 2015, which includes

“Plaintiffs’ Proposed Second Amended Plan for Trial of Class Claims.” APP. 4

contains “Exhibit 1” filed with the Court on August 14, 2015, which includes

“Plaintiffs’ Response to Defendants’ Joint Opposition to Class Certification and

Plaintiffs’ Proposed Amended Plan for Trial of the Class Claims.”

STATEMENT OF JURISDICTION

The Court has jurisdiction over this interlocutory appeal from an order

granting class certification. TEX. CIV. PRAC. & REM. CODE § 51.014(a)(3).

ISSUES PRESENTED

In addition to the grounds for relief set forth by the Brigham Defendants,

Statoil files this separate brief to develop two issues unique to Statoil and to

underscore an issue of particular significance to class-action jurisprudence:

I. Did the trial court err in certifying a class on the aiding-and-abetting claims

against Statoil? Specifically:

A. Did the trial court err in finding the Named Plaintiffs adequate to

pursue aiding-and-abetting claims against Statoil where none of them

knows any facts supporting the Plaintiffs’ allegation that Statoil

“knowingly participated” in the Brigham Defendants’ alleged breach

of fiduciary duties?

B. Did the trial court err in certifying an aiding-and-abetting claim

against Statoil based on a trial plan that is facially defective and

betrays a lack of rigorous analysis for that claim?

II. Did the trial court err in certifying a class based on a class definition that

includes class members who could not have sustained the injuries alleged,

depriving them of standing to participate in the class action?

xii

INTRODUCTION

This class action was filed within hours of the announcement that Statoil had

made an all-cash tender offer to purchase all Brigham shares at a price significantly

above the market price. The principal claims are against the Brigham directors

who approved the sale. Statoil, the buyer, was dragged into this lawsuit through a

fanciful aiding-and-abetting theory. Statoil has been subjected to sustained,

expensive litigation simply because it made a cash offer to buy another company

on terms that it viewed as a good deal for its shareholders (not to mention terms

that the vast majority of Brigham’s shareholders accepted and that the market itself

viewed favorably during the entire time the tender offer was pending).

Everyone involved in the underlying merger benefitted: those who accepted

Statoil’s tender offer, those who traded their shares to capture the benefit that

Statoil’s offer created, and even those few who held out until the tender offer was

effected through a short-form merger. Nevertheless, Plaintiffs’ counsel sprinted to

the courthouse to file this lawsuit the instant the merger was announced.

Whatever one thinks of this dubious strategy as to the Brigham Defendants,

the seven Named Plaintiffs are inadequate to represent a class against Statoil.

They have offered no factual basis for suing Statoil; indeed, some did not even

know that they had sued Statoil or who Statoil is. Of the few Named Plaintiffs

who could even identify Statoil, the only basis they could offer for the decision to

sue Statoil was this one: “I think they should have paid a higher price.” 3SCR85.

This claim is outlandish. Brigham shareholders are attempting to sue Statoil

for negotiating a merger on terms that they allege were too favorable to Statoil.

Such a claim is at odds with the very notion of a free market; securities litigation

cannot be based on one company’s failure to look out for another’s shareholders.

If this theory were valid, it would mean that the directors of the acquiring company

in every merger are obligated to breach fiduciary duties to their own shareholders

to ensure that shareholders on the other side of the deal are satisfied. It would also

mean that a company must expose itself to the risk of a derivative suit by its own

shareholders to avoid “aiding-and-abetting” liability. This position is nonsensical.

It is unsurprising, therefore, that the Named Plaintiffs cannot explain their suit

against Statoil and the trial plan regarding Statoil is facially flawed.

In addition, the class definition—which has been retooled multiple times—

remains completely out of joint with the alleged injury. The class is now defined

as persons who held Brigham shares on October 17, 2011, the day the tender offer

was announced. Yet the allegedly inadequate disclosures regarding this offer were

not made until 11 days later. By that time, a massive volume of Brigham shares

had been traded—well in excess of the total number of outstanding shares.2 Thus,

the class definition indisputably includes a vast number of shareholders who could

not have been injured by the disclosures, as a matter of law. This flaw is fatal.

This trading frenzy is explained by Statoil’s offer to pay $36.50 per share for Brigham shares,

when the day before the announcement the stock had closed at only $30.90 per share. CR148.

STATEMENT OF FACTS

Brigham approaches Statoil; eventually, these unrelated companies

strike a win-win merger deal for their shareholders

Statoil began as Norway’s state oil company over four decades ago. Today,

it is a publicly traded energy company with a presence in over thirty countries.

The company is listed on both the New York and Oslo stock exchanges.3

Brigham too was a publicly traded company until Statoil acquired it in 2011

as the result of an all-cash tender offer in response to which 92.6% of Brigham’s

shares were voluntarily tendered. CR1941. The acquisition resulted from inquiries

that Brigham had initiated and followed months of arms-length negotiations.

CR1416; CR1418-28.

Nearly a year after Brigham approached Statoil and other potential buyers,

Statoil’s board approved a proposal to Brigham. CR1420. Brigham countered. Id.

Initially, neither side budged. But given the time and energy both had expended on

the potential deal, they agreed to continue negotiating. Id.

After further negotiations, Statoil increased its offer to $36.50 per share.

CR1424. Brigham’s board later unanimously approved that amount. CR1426.

Thus, on October 17, 2011, Statoil and Brigham executed a merger agreement.

CR1428. That same day, the basic terms of the deal were made public. CR27.

See http://www.statoil.com/en/About/History/Pages/default3.aspx (September 25, 2015).

Statoil’s tender offer boosts Brigham’s share price

Statoil’s tender offer represented a premium of more than 18% over the

highest price for Brigham shares during the 30 days before the deal was announced

and a 33% premium over the average market price of Brigham shares during that

same period. CR184-85. The $36.50 offer was close to Brigham’s historic high4

and far above its historic low of less than $1 per share. CR143-216.

After Statoil’s offer was announced, Brigham’s stock price shot up in very

active trading. The first day after the announcement, 62 million outstanding shares

(a number exceeding 50% of the outstanding shares) were sold on the open market;

and the closing per-share price that day was $36.40—just 10 cents below the

tender offer per-share price. CR185. Between October 17 and October 28, 2011,

134 million Brigham shares were exchanged on the open market at similar prices.

Id. By the time the merger was effected on December 8, 2011, 262 million shares

had been traded at similar prices. Id.

Plaintiffs file suit, anticipating an injury that never occurs

On October 17, 2011—the very day that Statoil’s tender offer was

announced and 11 days before the tender offer even opened—a lawsuit was filed

that became the template for this class action. CR221-38. That first lawsuit was

filed on behalf of Raymond Boytim, one of the Named Plaintiffs. Id.

Brigham’s shares were largely tied to the price of oil. The all-time closing price high of $37.50

lasted for less than a week, when oil prices spiked to over $110 per barrel. CR182; CR194.

Since then, of course, oil prices have plummeted.

Astoundingly, Boytim testified that he did not decide to file suit until some

time later, after he had read about “all of these law firms that were filing suit.”

3SCR112. When asked point blank about the lawsuit bearing his name that was,

indisputably, filed on October 17, 2011, Boytim said: “If it -- if it was, I just

wasn’t aware of it.” Id. (emphasis added).

The lawsuit filed in Boytim’s name sought to enjoin the Statoil tender offer

on the ground that Brigham’s board had failed to disclose material information to

Brigham shareholders. CR233-34. More specifically, it alleged that Brigham

board members had failed “to disclose material financial information” related to

the merger “to enable Brigham’s stockholders to cast informed votes on the

Proposed Transaction.” CR234; CR235. And it included a claim against Statoil

for allegedly aiding and abetting the Brigham board’s purported failure to disclose.

CR235-36. But at the time, the tender-offer disclosures did not even exist yet—

they were made later, in required SEC filings. CR1472.

Other lawsuits quickly followed. Between the October 17 announcement

and the October 28 disclosures, nine other putative class actions were filed alleging

similar claims and attacking disclosures that had not yet been made. CR1461-63.

Finally, on October 28, 2011 (11 days after the first lawsuit had been filed)

the required disclosures were filed with the SEC. CR1391-1530. These are the

allegedly defective disclosures subsequently identified in the Named Plaintiffs’

class action trial plan. See APP. 3, Trial Plan at 4.

The vast majority of Brigham shareholders embrace the tender offer

The day of the disclosures—October 28, 2011—the tender offer opened.

The tender offer was successful: 92.6% of all shares were voluntarily tendered.

CR1941. Because Statoil acquired more than 90% of Brigham’s outstanding shares

during the first-step tender offer, it was entitled to effect a “short-form merger”

that did not require the approval of Brigham’s shareholders. 8 DEL. CODE § 253.

Using this procedure, each remaining share of Brigham stock was converted into a

right to receive $36.50 per share on December 8, 2011. CR1942.

But even as shareholders were voting with their shares in favor of the deal,

Plaintiffs sought to enjoin the merger. On November 22, 2011, Judge John Dietz

held a hearing and denied Plaintiffs’ request for a temporary injunction. APP. 5.

Thereafter, Plaintiffs sought class certification and damages based on allegations

that individual board members had breached fiduciary duties owed to Brigham

shareholders and that Statoil and Brigham itself had aided and abetted that breach.

CR370-400; CR678-707.

Well after the merger had been concluded, and after evidentiary hearings on

class certification, Judge Lora Livingston granted Plaintiffs’ motion to certify a

class defined as “all holders of common stock of Brigham Exploration Company as

of October 17, 2011.” CR1089; CR1190-95. The class action trial plan devoted

just three sentences to the aiding-and-abetting claim against Statoil. CR1150.

After the class is decertified, Plaintiffs obtain the same result on remand

On appeal, this Court held that the trial court had abused its discretion by

certifying a class without an adequate trial plan. APP. 2. The Court did not need to

reach any other issues, leaving for another day serious arguments that Plaintiffs

had failed to satisfy the requirements of Rule 42—such as adequacy. Id. at n.2.

On remand, Plaintiffs again proposed a class defined as “all holders of

common stock of Brigham Exploration Company as of October 17, 2011.”

3SCR664. Plaintiffs also proposed an amended trial plan, which was unchanged

with respect to the claim against Statoil. CR92. After Statoil objected to the

absence of any law relevant to the aiding-and-abetting claim, Plaintiffs submitted a

second amended trial plan that purported to address Statoil’s concerns. APP. 3.

That version, however, still only devotes one paragraph to the claim against Statoil

and merely recites the pleading standard. Id., Trial Plan at 4-5. The Defendants

again objected to certification and to the proposed trial plan on multiple grounds.

CR119-216; 3SCR3-652.

Judge Livingston signed a second class certification order, adopting and

incorporating Plaintiffs’ second amended class action trial plan. APP. 1; APP. 3.

The court authorized the seven Named Plaintiffs to serve as class representatives—

although only four had attended the initial class certification hearing and Plaintiffs

had presented no evidence that any Named Plaintiff knew facts relevant to the

claim against Statoil. CR656-76; CR1589-1859. Statoil appealed again.

STANDARD OF REVIEW

A trial court exercises discretion in certifying a class action, but must do so

subject to the requirements of Rule 42; “compliance with class action requirements

must be demonstrated rather than presumed.” Bowden v. Phillips Petroleum Co.,

247 S.W.3d 690, 696 (Tex. 2008). The Texas Supreme Court has rejected a

“certify now and worry later” view of class certification. Sw. Ref. Co. v. Bernal,

22 S.W.3d 425, 435 (Tex. 2000). The court must perform “a ‘rigorous analysis’

before ruling on class certification” in order to assure that Rule 42 is satisfied. Id.;

see also Riemer v. State, 392 S.W.3d 635, 639 (Tex. 2012) (same).

SUMMARY OF THE ARGUMENT

Statoil respectfully adopts the issues presented and the arguments developed

in the Brigham Defendants’ brief.

In addition, this brief focuses on two arguments of importance to Statoil.

First, the Named Plaintiffs are not adequate representatives for the class claims

against Statoil because none of them has any knowledge of facts relevant to the

aiding-and-abetting claim. Second, in attempting to cover up the adequacy defect,

the trial plan is facially defective and betrays a fatal lack of rigorous analysis.

Finally, as currently defined, the class contains numerous shareholders who

could not have sustained the injuries alleged because the conduct in question did

not occur until after the inception of the class. Thus, many class members

(perhaps most) lack standing to bring any of the asserted claims against Statoil.

ARGUMENT

I. The Trial Court Erred in Certifying the Aiding-and-Abetting Claim.

A. The Named Plaintiffs Are Not Adequate Class Representatives to

Pursue an Aiding-and-Abetting Claim Against Statoil.

Regardless of the viability of the class certification order with respect to the

Brigham Defendants, there is no basis for class certification with respect to Statoil.

The Named Plaintiffs failed to show that they are adequate class representatives

with respect to Statoil; in fact, their testimony conclusively proved otherwise.

1. Proving adequacy requires proof that class representatives,

not their lawyers, have specific knowledge of relevant facts.

Rule 42(a) requires that class representatives “fairly and adequately protect

the interests of the class.” TEX. R. CIV. P. 42(a). This “adequacy” requirement

implicates paramount due process concerns. See 1 H. Newberg & A. Conte,

NEWBERG ON CLASS ACTIONS § 3:50 at 408 (5th ed. 2015); see also S.W. Bell

Tel. Co. v. Mktg. on Hold Inc., 308 S.W.3d 909, 919 (Tex. 2010) (explaining that

class action requirements “are not only procedural safeguards but are based in the

Due Process clauses of the United States and Texas Constitutions”). Importantly,

these concerns are not satisfied unless both “class representatives and their

counsel are adequate representatives” for the class. Gen. Motors Corp. v. Bloyed,

916 S.W.2d 949, 954 (Tex. 1996). When a district court ignores this requirement,

reviewing courts “have no assurance that the district court fully appreciated the

scope and nature of the interests at stake.” Id.

Thus, class representatives must produce “actual, credible evidence” that

they “are informed, able individuals, who are themselves—not the lawyers—

actually directing the litigation.” In re Kosmos Energy Ltd. Securities Litig,

299 F.R.D. 133, 145 (N.D. Tex. 2014)).5 A class action cannot be lawyer-driven:

“the class representative is ‘not simply lending [his or her] name [ ] to a suit

controlled entirely by the class attorney.’” Mktg. on Hold, 308 S.W.3d at 927

(quoting 7A Wright & Miller, FED. PRAC. AND PRO. § 1766 (3d ed. 2005)).

At a bare minimum, class representatives must establish that they possess

personal knowledge of the facts underlying their claims—and must know who they

are pursuing those claims against, and why. See Forsyth v. Lake LBJ Inv. Corp.,

903 S.W.2d 146, 152 (Tex. App.—Austin 1995, writ dismissed w.o.j.) (quoting

federal authority for the principle that an adequate representative is “one who will

check the otherwise unfettered discretion of counsel in prosecuting the suit and

who will provide his personal knowledge of the facts underlying the complaint”).

These adequacy requirements are identical in state and federal court.6

Kosmos was decided under the federal analogue to Rule 42(a), but it is especially persuasive

because it involves an attempt to certify a class pursued by the same counsel appointed as lead

counsel here, in reliance on evidentiary submissions markedly similar to those proffered here.

After a rigorous, well substantiated analysis, the class representatives were deemed inadequate.

See Kosmos, 299 F.R.D. at 136-37.

See King v. City of Austin, 2004 WL 578940, at *4 (Tex. App.—Austin Mar. 25, 2004, no pet.)

(mem. op.) (named plaintiff who had been “recruited by counsel to be a class representative” and

“did not do independent investigation to assist his attorneys” was held to be inadequate); see also

Berger v. Compaq Computer Corp., 257 F.3d 475, 482-83 (5th Cir. 2001) (explaining that

class representative is required “to possess a sufficient level of knowledge and understanding to

be capable of ‘controlling’ or ‘prosecuting’ the litigation”).

Applying these adequacy standards, class certification should be denied

“where the representative lacks knowledge or a basic understanding of what the

suit is about” or the representative is unable to “identify certain named parties or

the roles the defendants played in the alleged fraud.’” Kosmos, 299 F.R.D. at 146

(quoting In re Enron Corp. Securities Lit., 529 F. Supp. 2d 644 (S.D. Tex. 2006)).

A class representative’s “inability to articulate any underlying case specifics

‘beyond conclusory allegations of fraud’” is a telltale sign of inadequacy. Id.

Kosmos offers an apt benchmark for this case. The affidavit in Kosmos,

which was sponsored by the same class counsel as this case, was aptly described as

“little more than formulaic, boilerplate assertions.” Id. It included the following

“conclusory pronouncements”:

 “I have participated in the Plan’s decision-making with respect to litigation

matters, and have participated in supervising outside legal counsel in the

Plan’s pending litigation.”

 “The Plan has reviewed and monitored the progress of this litigation and has

actively participated in its prosecution. For example, the Plan has” “received

and reviewed” reports and correspondence, “supervised” discovery

preservation, “reviewed pleadings” and “consulted with lawyers.”

Id. Such conclusory statements fail to satisfy the adequacy requirement. Id.

Class counsel in this case have an unfortunate history of aggressive tactics

that abuse the class-action device and devalue its important purposes. See, e.g.,

City of Livonia Emps’ Ret. Sys. v. Boeing Co., 711 F.3d 754, 762 (7th Cir. 2013)

(Posner, J.) (citing cases). This case follows the same pattern.

2. The Named Plaintiffs did not prove their adequacy to

represent any class claims against Statoil.

Plaintiffs presumed (incorrectly) that they could rely on written affidavits,

comprised entirely of boilerplate assertions, to prove that their class representatives

were adequate. It is telling that the affidavit that was found wanting in Kosmos,

reproduced in its entirety at footnote 64 of that opinion, was far more detailed than

most of the Named Plaintiffs’ affidavits in this case. The affidavits do little more

than assert that each affiant had “actively monitored the litigation” and planned to

“direct class counsel.” CR656-76. Most of the Named Plaintiffs’ affidavits do not

even mention Statoil, and none of the affidavits suggests any factual basis for the

aiding-and-abetting claim asserted against Statoil. See id. The affidavits are not

“actual, credible evidence” that the affiants are “informed, able individuals,

who are themselves—not the lawyers—actually directing the litigation.”

Kosmos, 299 F.R.D. at 141. They are legally insufficient on their face.

Additionally, the Named Plaintiffs’ deposition testimony demonstrated

conclusively that they had no knowledge to support an aiding-and-abetting claim—

most did not even know who Statoil is or why it was sued:

Myrna Goodman of the Edward J. Goodman Trust

Q: What is Statoil ASA?

A: Don’t know.

Q: Do you know why Statoil ASA is being sued?

A: No.

….

Q: What about Statoil, did you do any independent investigation

regarding Statoil?

A: No.

Q: Did you look online onto Statoil’s website?

A: No.

Q: Do you know what type of company Statoil is?

A: No, I do not.

3SCR32; 3SCR 37-38.

Jeffery Whalen

Q: What are you alleging that Statoil did wrong in connection with the

merger of the Brigham Exploration and the share price?

A: That I can’t answer.

3SCR45.

Hugh Duncan

Q: Mr. Duncan, are you suing Statoil in this case?

A: Am I what?

Q: Are you suing Statoil?

....

A: I think the pleadings speak for themselves.

Q: Do you know whether you’ve sued Statoil or not?

A: Pardon me?

Q: Do you know, as we sit here, whether you are suing Statoil?

A: I believe we are, aren’t we?

...

Q: Mr. Duncan, why are you suing Statoil?

...

A: I’ll claim the privilege.

3SCR52-53 (objections omitted).

Walter Schwimmer

Q: Why are you suing Statoil? . . . . Dr. Schwimmer, if you have an

independent understanding of why you sued Statoil other than the

outcome of discussion with your attorneys, you can respond.

A: I’m sorry. I don’t have any information other than that which has

been communicated to me by our -- my attorneys.

3SCR60-61 (objection omitted).

Howard Weissberg

Q: My last question was, have you sued Statoil?

A: No.

3SCR68.

Robert Fioravanti

Q: Why are you suing Statoil?

A: Because they didn’t – I believe they did not pay a fair value of the

company’s worth.

Q: Do you believe they wronged you?

A: I believe they should have paid more for the Brigham stock.

Q: Is that it? Is that the only thing you think they did wrong?

A: I think they should have paid a higher price.

Q: Anything else?

A: No.

3SCR84-85 (objections omitted).

Raymond Boytim

Q: What about Statoil, what are you alleging Statoil did wrong?

A: Statoil?

Q: Statoil.

A: That’s a tough one. . . . All the parties here had to be closely

involved to the point that they all had some responsibility with what

happened, the merger of the companies. And if the Brigham side of

the merger was flawed in some way, I feel the other side has got to be

flawed, because they came together so late and so quickly, no

prolonged negotiations, no long discussions. It was just bingo. And -

-- and there’s no explanation for it. It just happened. And I don’t like

things that just happen. You know, a deal – a deal is made. And I –

personally I would like to know how they really got together and

decided on $36.50. And anybody that was a party to agreeing it is

listed on this.

Q: And are you contending that Statoil did something to injure you as

a shareholder of Brigham Exploration? . . . Are you contending that

Statoil injured you as a shareholder of Brigham Exploration? When

you said their processes must have been flawed, are you suggesting

that they are responsible for some sort of injury to you?

A: I don’t know enough about it to make those allegations really. It

is implied. But I – I stand by what I said. They were involved; they

were a party to it.

3SCR122 (objections omitted).

In short, none of the Named Plaintiffs stated a viable basis for suing Statoil.

Only four of the Named Plaintiffs attended the class certification hearing.

CR1589-1859.7 Two of the four tried to rehabilitate their testimony about Statoil,

but they were unable to shed any real light on why class counsel had sued Statoil.

First, Whalen testified that “Statoil is the other entity in the merger, and if --

I think that the share price was too low for the acquisition cost, then they would be

liable for any damages because Brigham Oil is now owned entirely by Statoil.”

CR1737-38. But Whalen also admitted: “I just made that up right now.” Id.

Second, Weissberg similarly testified that the Plaintiffs had sued Statoil

“because Statoil is the company that bought Brigham. So, consequently, okay,

they are the ones who now own Brigham and they are the ones responsible for

Brigham, okay?” CR1679-80. “The attorneys decide who to sue.” CR1680.

In other words, the two Named Plaintiffs who testified at the hearing alleged

that Statoil is liable for the Brigham Defendants’ actions as the successor company

(which is false), not that it is responsible for any wrongdoing in the merger itself.

Indeed, their testimony demonstrated not only that they lacked any factual basis for

suing Statoil, but that they did not even understand the theory against Statoil.

This record includes no evidence that will satisfy the adequacy requirement.

Instead, it conclusively demonstrates the Named Plaintiffs’ inadequacy.

Boytim was not among them. Perhaps he did not attend the hearing because his deposition had

revealed the awkward fact that he was not even aware that class counsel had filed a lawsuit in his

name on October 17, 2011. He testified that he had not sought a lawyer until after several other

lawsuits had been filed. 3SCR112.

B. The Named Plaintiffs’ Inadequacy Is Further Highlighted by the

Deliberate Lack of “Rigorous Analysis” in the Trial Plan.

The sole claim asserted against Statoil is an aiding-and-abetting claim,

which would require the Plaintiffs to prove Statoil’s “knowing participation” in the

Brigham board members’ alleged breaches of fiduciary duty. The trial plan fails to

account for this critical element, allowing class certification on an invalid theory.

Proving the point, Plaintiffs’ trial plan is just a one-paragraph recitation of

the pleading standard for an aiding-and-abetting claim. APP. 3, Trial Plan at 4-5.

It ignores the elements Plaintiffs must prove at trial—because they cannot allege

the facts required to prove the claim. To prove Statoil knowingly participated in a

breach of fiduciary duty by Brigham’s board, Plaintiffs must prove that Statoil:

(1) “directly sought to induce the breach of fiduciary duty”;

(2) “create[d] or exploit[ed] conflicts of interest in [Brigham’s] board,”

(3) “used knowledge of the breach to gain a bargaining advantage” in

negotiations with Brigham’s board, or

(4) knew the “terms of the transaction [were] so egregious or the magnitude

of the side deals [] so excessive as to be inherently wrongful.”

In re BJ’s Wholesale Club, Inc. Shareholders Litig., 2013 WL 396202, at *14

(Del. Ch. Jan. 31, 2013); see also In re Rural Metro Corp. Shareholders Litig., 88

A.3d 54, 99 (Del Ch. 2014) (to prove aiding or abetting a breach of fiduciary duty,

the plaintiff must establish that “the third party, for improper motives of its own,

misleads the directors into breaching their duty of care”).

Because Plaintiffs cannot establish these factors, the trial plan omits them.

APP. 3, Trial Plan at 4-5. Instead, it assumes that Plaintiffs could prevail based on

their allegation that Statoil bought Brigham too cheaply. But under Delaware law,

attempting “to reduce [Brigham’s] sale price through arm’s length negotiations”

and “hard bargaining” is insufficient to state a claim as a matter of law. In re BJ’s,

2013 WL 396202 at *14; Malpiede v. Townson, 780 A.2d 1075, 1096 (Del. 2001).

Even if Brigham was “worth substantially more” than the purchase price, that fact

does “not provide a reasonable inference” that Statoil “conspired with the Board to

purchase the Company at a discounted price.” In re BJ’s, 2013 WL 396202 at *15.

Nor could Plaintiffs prevail by proving that Statoil sought to retain members

of the Brigham management team; “retaining management is a routine occurrence

for the obvious reason that an acquiror often wants to keep existing management in

order to ensure that the acquired assets continue to be managed optimally.”

Morgan v. Cash, 2010 WL 2803746, at *5 (Del. Ch. July 16, 2010).

Thus, Plaintiffs’ allegations do not state a cognizable claim against Statoil.

In Delaware state court, this aiding-and-abetting claim against Statoil would have

been dismissed on the pleadings. E.g., Malpiede, 780 A.2d at 1098; In re BJ’s,

2013 WL 396202, at *14; In re Telecomms., Inc., 2003 WL 21543427, at *2-3

(Del. Ch. July 7, 2003). Statoil’s offer to buy Brigham for the best price Statoil

could obtain through arms-length negotiations is simply not a basis for a legitimate

aiding-and-abetting claim.

The Texas Supreme Court mandates that, before certifying a class action,

trial courts must undertake a “rigorous analysis” of the “claims ... relevant facts,

and applicable substantive law” in order to “make a meaningful determination of

the certification issues.” Bernal, 22 S.W.3d at 435. That rigorous analysis must be

reflected in the trial plan. Id. This trial plan falls woefully short of that standard,

because none of the Named Plaintiffs has any factual basis for asserting that Statoil

“knowingly participated” in any breach of fiduciary duty by the Brigham board.

APP. 3, Trial Plan at 4-5. This claim is a naked attempt to penalize an acquiring

company for trying to make a good deal, which is nothing but a toll on capitalism.

By certifying the claim for class treatment, the trial plan is fatally defective.

Taken together, the inadequacy of the class representatives and the invalidity

of the trial plan (which was deliberately constructed to cover up that inadequacy)

reveals that the lawyers, and not the class representatives, are driving this lawsuit.

The trial court abused its discretion by certifying a class against Statoil.

II. The Class Definition Fails Because It Contains Members Who Could

Not Have Sustained Any Injury in Fact.

As stated above, Statoil incorporates the Brigham Defendants’ arguments,

which demonstrate additional reasons why the entire class should be decertified.

One of those arguments merits particular emphasis because it is so foundational:

the class has been defined in such a way that it includes numerous individuals who

do not have standing to sue because they could not have sustained any injury.

A. A Class Must Be Defined So That All Members Have Standing.

Standing is the first prerequisite to maintaining a legal action. Hunt v. Bass,

664 S.W.2d 323, 324 (Tex. 1984). Class actions are no exception to that rule.

M.D. Anderson Cancer Ctr. v. Novak, 52 S.W.3d 704, 708 (Tex. 2001) (explaining

that a plaintiff in a class action must satisfy the threshold requirement of standing);

see also DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 304 (Tex. 2008)

(stating that “[a] court has no jurisdiction over a claim made by a plaintiff without

standing to assert it”); Tex. Dept. of Mental Health & Mental Retardation v. Petty,

778 S.W.2d 156, 163-67 (Tex. App.—Austin 1989, writ dism’d w.o.j.) (finding

plaintiff that lacked standing was not a competent class representative).

Because standing is jurisdictional, a class definition cannot include any

claimants who lack standing. See In re Deepwater Horizon, 732 F.3d 326, 342

(5th Cir. 2013) (citing multiple federal authorities). In other words, a class must

“be defined in such a way that anyone within it would have standing” with respect

to the claims asserted. Id. (emphasis added). Federal and state law are consistent

in this area, so “federal decisions and authorities interpreting current federal class

action requirements are persuasive in Texas actions.” Ford Motor Co. v. Sheldon,

22 S.W.3d 444, 452 (Tex. 2000); see also Polaris Indus. v. McDonald, 119 S.W.3d

331, 338 (Tex. App.—Tyler 2003, no pet.) (applying this principle to standing).

Therefore, the Fifth Circuit’s recent Deepwater Horizon decision, which is directly

on point, should be controlling in this case.

B. The Class Definition Is So Broad That It Includes Many Members

Who Could Not Have Been Injured, As a Matter of Law.

This class is defined to include “all holders of Brigham common stock as of

October 17, 2011.” CR3167. Many members of that class do not have standing to

bring any claims based on the disclosures that Plaintiffs allege injured them. Thus,

under the rule of Deepwater Horizon, the class definition is defective.

1. The class definition contains many members with no

standing to assert any breach of fiduciary duty claim based

on the allegedly unlawful disclosures.

According to the trial plan, this case turns on an inadequate disclosure theory

involving disclosures that were made on October 28, 2011:

plaintiffs contend that the Individual Defendants disseminated a

Schedule 14D-9 and tender offer statement on Schedule TO, filed

with the Securities and Exchange Commission on October 28, 2011,

which was false and misleading and failed to disclose all material

information to Brigham shareholders in connection with the tender

offer from Statoil.

APP. 3, Trial Plan at 4 (emphasis added). As Plaintiffs put it in their live petition:

The Individual Defendants breached their fiduciary duties of good

faith, loyalty, due care and candor ... by failing to: ... (f) disclose all

material information concerning the transaction to enable Brigham’s

stockholders to, on an informed basis, tender their shares for the

Acquisition. . . . Such breaches of fiduciary duties could not and

would not have occurred but for the conduct of ... Statoil, which,

therefore, aided and abetted such breaches via entering into the

Merger Agreement.

CR47. Thus, the classwide liability theory turns on legally-required disclosures

that were not made until October 28, 2011.

Plaintiffs have conceded that, if the Schedule 14D-9 and related tender offer

statement on Schedule TO did not contain material non-disclosures or omissions,

their duty-of-candor claims fail. APP. 4 at 7 (“If plaintiffs do not establish that

shareholders were misled [as alleged], plaintiffs’ claims based on the breach of the

duty of candor fail and defendants are entitled to judgment on that claim”). Thus,

the injury the class members allege arises from disclosure statements that were not

made until after the date of the class definition: no class member could have been

injured by those disclosures until at least 11 days later. CR1391-1530.

Moreover, during that 11-day period, Brigham stock was traded on the open

market so extensively that the volume exceeded 100% of Brigham’s total shares.8

This tremendous trading activity between October 17, 2011 (when the tender offer

was announced) and October 28, 2011 (when the disclosures were made and the

tender offer period opened) conclusively demonstrates that many, if not most,

Brigham shareholders on October 17, 2011 no longer owned that stock when the

critical disclosures were made on October 28, 2011.

As defined, many members of the class could not have a justiciable injury

arising from the challenged disclosures. CR45-47. Because many class members

have no standing to sue any defendant for an injury arising from those disclosures,

the class definition constitutes an abuse of discretion.

On October 17, 2011, approximately 117 million Brigham shares were outstanding. CR3164.

From October 17 to October 28, 134 million Brigham shares exchanged hands. CR185-86.

2. The class definition contains many members with no

standing to assert an aiding-and-abetting claim against

Statoil.

The only claim asserted against Statoil is an aiding-and-abetting claim.

CR46-48. It assumes (at least in part) that the individual Brigham Defendants

made misleading disclosures regarding the Statoil tender offer. See, e.g., CR47

(alleging that Statoil and Brigham aided and abetted “the Individual Defendants’

breaches of fiduciary duties” and “damaged” the class members “in that they have

been prevented from obtaining a fair price for their shares and were not able to

tender their shares on an informed basis”) (emphasis added).

Because most members of the class lack individual standing to assert the

breach of the duty of candor/disclosure claim, they likewise lack standing to assert

a claim that Statoil aided and abetted such a breach. Class members who owned

Brigham shares on October 17, 2011 and sold them before the relevant disclosures

were made on October 28 cannot claim any injury fairly traceable to the allegation

that Statoil aided and abetted a fiduciary breach with respect to those disclosures.

Thus, with respect to Statoil, the class definition constitutes an abuse of discretion.

C. Plaintiffs Have Tried to Obscure the Mismatch Created by the

Class Definition After Repeatedly Tweaking That Definition.

The current class definition, which has not changed since the first appeal,

was Plaintiffs’ third attempt to define the scope of their class. The evolution of the

class definition exposes the reality of their case, and it is not pretty.

At one point, the class included “[a]ll holders of Brigham common stock as

of 12/8/11 who held their shares from consummation of the acquisition of Brigham

by Statoil at a price of $36.50 per share.” CR128. But Plaintiffs abandoned this

definition tethered to December 8 (the date when the tender offer closed),

presumably because it would contain very few members. CR185-86; CR1941.

The frenetic trading that occurred between the announcement of the tender offer

and the date the tender offer closed indicates that very few Brigham stockholders

(1) owned Brigham stock on October 17, 2011, (2) held that stock until after the

October 28 disclosures, and (3) refused to tender their shares by December 8:

As this graphic illustrates, a class limited to the handful of Brigham shareholders

who might claim actual injuries from the disclosures in question would be tiny.

Thus, class counsel gerrymandered the class definition to make it more profitable.

The district court should have recognized this ploy and denied certification.

Its duty to engage in a “rigorous analysis” of the class certification criteria, Bernal,

22 S.W.3d at 435, included a duty to determine “whether broad swaths of the

proposed class would have standing.” Deepwater Horizon, 732 F.3d at 343 n.11.

Because this class is “defined so broadly as to include a great number of members

who for some reason could not have been harmed by the defendant’s allegedly

unlawful conduct,” under the Deepwater Horizon test that Texas law should adopt,

“the class is defined too broadly to permit certification.” Id. at 342 n.9 (quoting

Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 824 (7th Cir. 2012)).

Because the district court did not undertake this rigorous analysis, it certified

a class containing many members without standing to assert any disclosure claim,

much less the utterly speculative aiding-and-abetting claim asserted against Statoil.

The district court’s failure to police Plaintiffs’ transparent attempt to obscure their

numerosity problem with an overbroad class definition that is logically inconsistent

with the class liability theory was an abuse of discretion.

CONCLUSION AND PRAYER

For these reasons as well as those set forth in the Brigham Defendants’ brief,

Statoil asks that the trial court be reversed, the class be decertified, and the action

be remanded for further proceedings consistent with this Court’s opinion.

Respectfully submitted,

BECK REDDEN LLP

/s/ Russell S. Post

Russell S. Post

State Bar No. 00797258

rpost@beckredden.com

Fields Alexander

State Bar No. 00783528

falexander@beckredden.com

Parth S. Gejji

State Bar No. 24087575

pgejji@beckredden.com

1221 McKinney, Suite 4500

Houston, TX 77010

(713) 951-3700

(713) 951-3720 (Fax)

Gretchen S. Sween

State Bar No. 24041996

gsween@beckredden.com

Christopher R. Cowan

State Bar No. 24084975

ccowan@beckredden.com

BECK REDDEN LLP

515 Congress Avenue, Suite 1900

Austin, TX 78701

(512) 708-1000

(512) 708-1002 (Fax)

Counsel for Appellants,

Statoil ASA and Fargo Acquisition, Inc.

CERTIFICATE OF SERVICE

In accordance with the Texas Rules of Appellate Procedure, I hereby certify

that on September 28, 2015, a true and correct copy of the above and foregoing

Brief of Appellants Statoil ASA and Fargo Acquisition, Inc. was properly

forwarded to all counsel of record, by e-file and/or email, addressed as follows:

Class Counsel for Appellees

ROBBINS GELLER RUDMAN ROBBINS GELLER RUDMAN

& DOWD LLP & DOWD LLP

Darren J. Robbins Samuel H. Rudman

Randall J. Baron Mark S. Reich

David T. Wissbroecker Michael G. Capeci

Steven M. Jodlowski 58 South Service Road, Suite 200

655 West Broadway, Suite 1900 Melville, NY 11747

San Diego, CA 92101-3301 srudman@rgrdlaw.com

randyb@rgrdlaw.com mreich@rgrdlaw.com

dwissbroecker@rgrdlaw.com mcapei@rgrdlaw.com

sjodlowski@rgrdlaw.com

Liaison Counsel for Appellees

BOULETTE & GOLDEN LLP

Michael D. Marin

2801 Via Fortuna, Suite 530

Austin, Texas 78746

mmarin@boulettegolden.com

Additional Counsel for Appellees

KENDALL LAW GROUP, LLP THE BRISCOE LAW FIRM, PLLC

Joe Kendall Willie C. Briscoe

Daniel Hill The Preston Commons

Jamie J. McKey 8150 N. Central Expressway, Suite 1575

3232 McKinney Avenue, Suite 700 Dallas, Texas 75206

Dallas, Texas 75204 wbriscoe@thebriscoelawfirm.com

jkendall@kendalllawgroup.com

dhill@kendalllawgroup.com

jmckey@kendalllawgroup.com

DUNNAM & DUNNAM L.L.P. BRODSKY & SMITH LLC

Hamilton P. Lindley Evan J. Smith

4125 W. Waco Drive (76710) Marc L. Ackerman

P.O. Box 8418 Two Bala Plaza, Suite 602

Waco, Texas 76714 Bala Cynwyd, Pennsylvania 19004

hlindley@dunnamlaw.com esmith@brodsky-smith.com

mackerman@brodsky-smith.com

LEVI & KORSINSKY LLP KOHN, SWIFT & GRAF, P.C.

Shane T. Rowley Denis F. Sheils

30 Broad St., 24th Floor One South Broad Street, Suite 2100

New York, NY 10004 Philadelphia, PA 19107-3389

srowley@zlk.com dsheils@kohnswift.com

THE WEISER LAW FIRM, P.C. RYAN & MANISKAS, LLP

Patricia C. Weiser Katharine M. Ryan

James M. Ficaro Richard A. Maniskas

22 Cassatt Avenue 995 Old Eagle School Road, Suite 311

Berwyn, PA 19312 Wayne, PA 19087

pw@weiserlawfirm.com kryan@rmclasslaw.com

jmf@weiserlawfirm.com rmaniskas@rmclasslaw.com

THE REDDELL FIRM PLLC

Kelly N. Reddell

100 Highland Park Village, Suite 200

Dallas, Texas 75025

kelly@reddell-law.com

Counsel for Brigham Exploration Company and Individual Appellants

THOMPSON & KNIGHT LLP THOMPSON & KNIGHT LLP

Timothy R. McCormick Debora B. Alsup

Michael W. Stockham Thompson & Knight LLP

Mackenzie Wallace 98 San Jacinto Blvd., Suite 1900

1722 Routh Street, Suite 1500 Austin, TX 78701

Dallas, Texas 75201 debora.alsup@tklaw.com

timothy.mccormick@tklaw.com

michael.stockham@tklaw.com

mackenzie.wallace@tklaw.com

/s/ Russell S. Post

Russell S. Post

CERTIFICATE OF COMPLIANCE

1. This brief complies with the type-volume limitation of

Tex. R. App. P. 9.4 because it contains 6,093 words, excluding the parts of the

brief exempted by Tex. R. App. P. 9.4(i)(2).

2. This brief complies with the typeface requirements of Tex. R. App. P.

9.4(e) because it has been prepared in a proportionally spaced typeface using

Microsoft Word 2007 in 14 point Times New Roman font.

Dated: September 28, 2015.

/s/ Russell S. Post

Russell S. Post

Counsel for Appellants,

Statoil ASA and Fargo Acquisition, Inc.

No. 03-15-00248-CV

IN THE COURT OF APPEALS

FOR THE THIRD DISTRICT OF TEXAS

AT AUSTIN

BRIGHAM EXPLORATION COMPANY, BEN M. BRIGHAM,

DAVID T. BRIGHAM, HAROLD D. CARTER, STEPHEN P. REYNOLDS,

STEPHEN C. HURLEY, HOBART A. SMITH, SCOTT W. TINKER,

STATOIL ASA AND FARGO ACQUISITION, INC.,

Appellants,

RAYMOND BOYTIM, ET AL., INDIVIDUALLY AND ON

BEHALF OF OTHERS SIMILARLY SITUATED,

Appellees.

On Appeal from the 201st Judicial District Court of Travis County, Texas,

Trial Court Cause No. D-1-GN-11-003205

APPENDIX TO BRIEF OF APPELLANTS

STATOIL ASA AND

FARGO ACQUISITION, INC.

TAB

1 Trial Court’s Order (CR3163-3167)

2 Court of Appeals’ memorandum opinion in previous appeal of

class certification

3 “Exhibit 1” filed with the Court by the district clerk on June 5,

2015, which includes “Plaintiffs’ Proposed Second Amended

Plan for Trial of Class Claims”

4 “Exhibit 1” filed with the Court on August 14, 2015, which

includes “Plaintiffs’ Response to Defendants’ Joint Opposition

to Class Certification and Plaintiffs’ Proposed Amended Plan

for Trial of the Class Claims”

5 Judge Dietz’s order denying the request for a temporary

injunction (CR305-307)

Tab 1

Trial Court’s Order (CR3163-3167)

DC BK1M03 PG100

Flied In The District Court

of Travis County, Texas

AfR · 9 2015

At fj· (p f M.

Velva L Price, District Clerk

Cause o 0-J-G;-.:·11-003205

(Con oliduce<J )

RA Y~ I O'iO BOY 11\1. cl al., lndiYiduall} :ind 'l I IE D15TRICT COLRT OF

on Behalf of All Other'.I 1m1larly Situated. §

Plaintiffs, § l'RAVI COUNTY, TEXAS

vs. §

20 Ist JUDICIAL DISTRICT

BRIGHAM LXPl ORA1 1 0~ COMPANY. ss

et al •

Defendants

~~~~~~~~~~~~~~~

Case # 0 -1-GN 11·003205

1111111 11111 11111 111111111111111 111111111111111flll1111

003974777

3163

DC BK1M03 PG101

Th~ Coun, ha\ ins considered lhe papc~ filed in uppon of. and in orpu~ition to. plaintiffs'

Motion for Cln~s Certification. as well as oral argumcm thereon. find~ ns follows. pursuant Lo

Ruic 42 of the 'Jcxns Rules ol Ch il Procedure:

I. The: mc:mbcr!l of the Class. as delim:J bclo"'. an: o numerous thaL joinder of all

membc~ is impracticable. Plaintiffs ha\e demon tr3tc:d that Brigham had more than 117318.932

sha re~ of stock outstanding prior to the acquisition of lln gham E:.xploration Company (''Brigham" or

the "Company") hy ~Hut.o il ASA ("Statoil") (the "Acquisiti un").

2. Plaintifl\ bring claims against the former member-. of Urcehom's Board of Directors

for breach of their fiducial) duties. and a claim ognin~t the: Comp:my unJ ~wtotl for ai<fing and

ubclling the Board ' breach of fiduciaJ) dutic!'. I he e claims rai e question of la\\ and fac t

common to the Clas including. inrer alia. the follo" ing:

(a) whether the former members of the Brigham's Board breached lheir fiduciary

dutic!l» of unJh idcJ loyalt). independence or due care: with re~pcct 10 plaintiffs and the other

members of the Class in connection with the Acqui'>ition:

(b) \.\hether the former members of llrigham's Hoard engogcd in a plan and

scheme to benefit themse lves and/or Statoil al the expense of' lhc! members of the Class;

duly to secure and ubtnin the best price reasonable under the circums1nnccs for the benefit of

plaintiffs and the other members of the Class in connection with the Acqui.,ition:

(d) \.\hcther Brigham and/or 1atoil aided 3nd abetted the breach of fiduciary

dutie.s b} the Inc.Ji" i<lual Defendants:

and the olher members of the Class in connection "ilh the Acquisition, including the duties of

-I-

3164

DC BK15103 PG102

candor, good faith, diligcn\:e, honesty and fair dealing b) tailing to di~cfo call material infonnation

to Brigham shnrchoh.k~:

(I) whether defendants ertttcd prcdu,i~c b3rricr.; to di courage other offers for

the Company and it a cb; and

(g) \\rhcther plaintiffs and the other member.; of the Class were damaged as a

result of defendants' mi sconduct.

3. The claims of Raymond Boytim, I lugh Duncun, Robcrl Fioravanti, Walter

S'-hwunmcr, f he l .dward J. Goodman Life Income I rus1 nnd The Edward J. Goodman Generation

kipping Trust. Jeff re} \\ halcn and Ho\\ard Weissberg (colh:ctivcl}' "'plaintiOs") arc typical of I.he

claim of the Cla . Plaintiffs have demonstrated that their claims, as \\ell U\ those possessed b) the

Cln , ari"e out of the "rune course of conduct or cvc:nt nnJ arc based on the . amc legal theories.

4. Plaintiffs will fairly and adequately protect the mt~re~t of the Class. Plaintiffs

c~tabli hcd. through deposition Lesrimon}. S\\Om affida\ its. andfor live te timon} pro,·ided at the

cla:.s \;eniticotion hearing. that they: (i) ha' e taken an Clive role in the pro-:ccution of the action.

including communicnling regularly with their nllomc} s. re\ ic:Y. ing the documents nnd deposition

lcstimony of def'cndo11ts, responding to discovery requested by dcrcndonls. independently

invcstignting 13riglrnm and Statoil and the acquisition; (ii) urc knowlc.:dgcublu ubout the factual and

lci;al 10,sucs involved in the case: (iii) understand the procedural history ol lhc case; (iv) have no

intere ts antagonistic lo the class; (v) understand 1hcir dutic to the clths and eek to maximize any

rcco\ Cl') for the cla~': (vi) strongly belie\.e m the legitimac) of their grievance~ and (vii) arc

prepared to 3ppcar at trio I.

5. Plaintiff,· -.elected class counseh' ill d~qu:udy reprc cnt pfJintiffs nnd the Class and

pro ccutc: their cl3ims. Robbins Geller Rudman & Oo\\d l.l.P is e~pcncn<.:cd an the nrea ofsecunues

-2-

3165

DC BK115103 PG103

litigation and has vigorou~I} prosecuted thb case co d:ste. Boulcuc 1oldcn & Marin Ll.P. h

like" isc c!.xpc:ricnccd in complex commercial litigation,

6. 1 he quc tions oflaw and facl common to the Class predominate O\ er an) questions

offc:c.aing onl) inJi\J idual mcmbct"s of the Clas . rlaintiff ha-.:c demon tratcJ lhal each member of

the lass is lhc \'ictim of a common course of conduct cngugcd in by dcfcnc.lants.

7. A class uclion is superior Lo other nvnilublc rnc1hocls fo1 lhe fair and efficienl

uc.ljucJicntion of' th~ controversy in this action.

(o) Plaintiffs have established that , given the rcknhcly small amount of dollars

which ma} be ot ii. uc for man} class member:,. the class action mechanism is the onl} means by

which a claim challenging defendants" actions ''ill c\c:r be adjudicalcd, that pursumg individual

action. \\OUld be prohibiti\cl} expensive for the \8!>1 majorit) of the Cln.ss, especially in light of the

potc!ntially small dollar amount of their indh idu:il claim'>, nnd that Cla's members' interests are far

bcuer el"\cd b) the cl:iss nction device lhan pur uing im.li\iJual actions; and

(b) Plaimiffs have submnted trial plan '"hich offers a rigorous analysis and a

:.pcc1fic explanation or ho"' the class claims arc to pro\,;eed to triul Alter cvnlua1ing che plan, the

Courl finds that o trial in Lhis action will be manogcnblc 1n that it involves lhc upplication of the Jaws

of a single stutc (Dcluwurc), there are no indi vidt~ul lssm:s to b~ resolv1::d by lh<.l l'ucl-finder, and that

the so le individual bsuc (the amount of shares held by each class member on October 17, 2011) can

be rcsol\led through a po I-judgment proceeding. ·yhe oun hcn:by adopts and incmporates

J>J3in1iff • Propo cd 1.:cond Amended Plan for Trial of Cla s C laims, liled ~1arch 19. 2015.

8. Phi inti fl! · Amended ~otice of Pendenc) of Clas Action, Bllal.!hcd as Exhibit I 0 to

Pluintiff~ · Amended Motion for Class Certification. ~tis lie Ruic 42( c )(2 XB) of the Texas Rules of

Ci\·il Procedure. h concise I) and clear!") stales in pl:iin, casil} understood l:ingu3gc: (i) the oatme of

. 3.

3166

DC BK15103 PG104

the action; (ii) the definition of the Class certified; (iii) the Class claims, issues and defenses;

(iv) that a member of the Class may enter an appearance through counsel if the member so desires;

(v) that the judgment, whether favorable or not, will include and bind all members who do not

request exclusion by the specified date; (vi) that the court will exclude any members of the Class if

they request exclusion; and (vii) when and how a member may be exclude themselves from the

Class.

Good cause appearing, IT IS HEREBY ORDERED that:

l. Plaintiffs' Motion for Class Certification is GRANTED.

2. The Class is defined as all holders of common stock of Brigham Exploration

Company as of October 17, 2011. Excluded from the Class are defendants and any person, firm,

trust, corporation or other entity related to or affiliated with any defendant.

3. Plaintiffs are appointed as representatives of the Class.

4. Robbins Geller Rudman & Dowd LLP is appointed as Class Counsel, and Boulette

Golden & Marin L.L.P. is appointed as Liaison Counsel.

5. The Court approves Plaintiffs' Amended Notice of Pendency of Class Action. Within

30 days, the parties shall meet and confer regarding a proposed plan for dissemination of the notice.

ORDER

IT IS SO ORDERED.

DATED:

THE HO

-4 -

3167

Tab 2

Court of Appeals’ memorandum opinion in

previous appeal of class certification

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-13-00191-CV

Brigham Exploration Company, Ben M. Brigham, David T. Brigham, Harold D. Carter,

Stephen P. Reynolds, Stephen C. Hurley, Hobart A. Smith, Scott W. Tinker, Statoil ASA

and Fargo Acquisition, Inc., Appellants

Raymond Boytim, Hugh Duncan, Robert Fioravanta, Walter Schwimmer, Michael Ohler,

Ryan Ohler, Walter Ohler, Jr., The Edward J. Goodman Life Income Trust and The

Edward J. Goodman Generation Skipping Trust, Jeffrey Whalen, and Howard Weissberg,

Individually and on Behalf of Others Similarly Situated, Appellees

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT

NO. D-1-GN-11-003205, HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING

MEMORANDUM OPINION

Appellants Brigham Exploration Company, Ben M. Brigham, David T. Brigham,

Harold D. Carter, Stephen P. Reynolds, Stephen C. Hurley, Hobart A. Smith, Scott W. Tinker,

Statoil ASA and Fargo Acquisition, Inc., bring this interlocutory appeal challenging the trial court's

order granting class certification. See Tex. Civ. Prac. & Rem. Code§ 5 l.014(a)(3). For the reasons

that follow, we decertify the class, reverse, and remand this cause for further proceedings consistent

with this opinion.

BACKGROUND

Appellant Brigham Exploration Company (Brigham) was a publically traded

company. Appellant Statoil ASA (Statoil) made a tender offer for all shares of stock in Brigham at

$36.50 per share, and Brigham's Board of Directors approved the transaction on October 16, 2011.

Brigham announced the transaction the following day, and Statoil commenced the tender offer on

October 28, 2011. After shareholders had voluntarily tendered over 92 % of the outstanding shares

in December 2011, Statoil effected a short-form merger, converting each remaining share of stock

into a right to receive $36.50.

Appellees brought suit shortly after Brigham's announcement of the transaction,

seeking to enjoin the transaction based on the Brigham Board's alleged failure to disclose material

information to the shareholders. After a hearing on November 22, 2011, the trial court denied

appellees' request for an injunction. Appellees proceeded with their suit, seeking class certification

and damages based on their claims that individual Board members breached their fiduciary duties

and that Brigham and Statoil aided and abetted the Board members' breaches of their fiduciary

duties. Appellants denied the allegations and asserted affirmative defenses including acquiescence

and waiver.

Appellees filed a proposed order granting class certification and a proposed amended

preliminary plan for the trial of the class claims. In their proposed amended plan, appellees set out

Delaware substantive law that they contend applies to their claims and describe how they plan to

prove their claims and damages at trial with common evidence. Appellees describe their plan for

the trial as follows:

At this time, plaintiffs envision a single trial with the following procedural

steps:

1. Plaintiffs will present their case-in-chief, submitting common evidence of

defendants' wrongdoing, class-wide injury, and total damages;

2. The Individual Defendants will present the defenses they wish to advance;

3. Brigham and Statoil will present the defenses they wish to advance;

4. Plaintiffs will present their rebuttal case; and

5. The case will be submitted to the jury, which will enter a verdict based on a

proposed jury charge.

Appellees' proposed order granting class certification and their amended preliminary plan did not

otherwise address appellants' pleaded defenses.

Appellants objected to appellees' proposed order and trial plan. Their objections

included that "the proposed trial plan is insufficient because it does not correctly identify the

elements for each claim or defense asserted in the pleadings" and that it "contains only Plaintiffs'

allegations and theory of the law without incorporating any of the Defendants' theories or defenses."

The trial court held an evidentiary hearing on appellees' motion for class certification in October

2012 and a subsequent hearing in February 2013. After the hearing in February, appellants filed a

document titled "Attachment to Plaintiffs' Proposed Amended Preliminary Plan for Trial of Class

Claims." In the document, appellants describe their defensive theories and cite Delaware substantive

law that they contend applies to appellees' claims and appellants' affirmative defenses.

The trial court thereafter granted appellees' motion for class certification and

certified a class "defined as all holders of common stock of Brigham Exploration Company as of

Oct. 17, 2011," the date the transaction was announced, excluding from the class defendants and

other persons and entities related to or affiliated with defendants. In its order granting class

certification, the trial court made findings concerning appellees' claims, including that "Plaintiffs

have submitted [a] trial plan which offers a rigorous analysis and a specific explanation of how the

class claims are to proceed to trial." Based on its evaluation of appellees' trial plan, the court also

found that "a trial in this action will be manageable in that it involves the application of the laws of

a single state (Delaware), there are no individual issues to be resolved by the fact-finder, and that the

sole individual issue (the amount of shares held by each class member on October 17, 2011) can be

resolved through a post-judgment proceeding."

In the order granting class certification, the trial court expressly adopted and

incorporated appellees' proposed amended preliminary plan for the trial of the class claims.

Although the trial court also refers to "Defendants' position with respect to Plaintiffs' Trial Plan as

set forth in its Attachment to Plaintiffs' Proposed Amended Preliminary Plan for Trial of Class

Claims," it does not adopt or incorporate the attachment in its order or otherwise analyze the

substance of appellants' position set forth in the attachment. This interlocutory appeal followed.

ANALYSIS

In six issues, appellants challenge the trial court's order granting class certification.

In their first four issues, they contend that the trial court abused its discretion in concluding that the

named plaintiffs and their counsel are adequate, that the named plaintiffs' claims are typical, and that

individualized issues do not predominate. See Tex. R. Civ. P. 42(a)(3), (4), (b)(3). In their fifth

issue, appellants urge that the trial court abused its discretion "in failing to 'rigorously analyze' all

certification requirements under Rule 42, as evidenced by the legally deficient class-action 'trial

plan' approved by the [trial] court." In their sixth issue, they urge that the trial court abused its

discretion in certifying the class and approving the trial plan.

Class Certification Requirements and Standard of Review

Appellate courts review a class certification order for abuse of discretion. Bowden

v. Phillips Petroleum Co., 247 S.W.3d 690, 696 (Tex. 2008); Compaq Computer Corp. v. Lapray,

135 S.W.3d 657, 671 (Tex. 2004). "A trial court abuses its discretion if it acts arbitrarily,

unreasonably, or without reference to any guiding principles." Bowden, 247 S.W .3d at 696 (citing

Walkerv. Packer, 827 S.W.2d 833, 839 (Tex. 1992)). We do not indulge every presumption in the

trial court's favor, however, "as compliance with class action requirements must be demonstrated

rather than presumed." Id. (citing Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675, 691 (Tex.

2002)). "Courts must perform a 'rigorous analysis' before ruling on class certification to determine

whether all prerequisites have been met." Southwestern Ref Co. v. Bernal, 22 S.W.3d 425, 435

(Tex. 2000). The Texas Supreme Court has rejected a "certify now and worry later" approach. Id.

at 435. Trial courts must determine the underlying substantive law prior to certification "as courts

can hardly evaluate the claims, defenses or applicable law without knowing what the law is."

Lapray, 135 S.W.3d at 672.

All class actions must satisfy the four threshold requirements contained within Rule

42(a) of the Texas Rules of Civil Procedure: (1) numerosity ("the class is so numerous thatjoinder

of all members is impracticable"); (2) commonality ("there are questions oflaw or fact common to

the class"); (3) typicality ("the claims or defenses of the representative parties are typical of the

claims or defenses of the class"); and (4) adequacy of representation ("the representative parties will

fairly and adequately protect the interests of the class"). Tex. R. Civ. P. 42(a)(l)-(4); Bernal,

22 S.W.3d at 433. In addition to the subsection (a) prerequisites, class actions also must satisfy at

least one of the subdivisions of Rule 42(b). See Tex. R. Civ. P. 42(b) (subsection (b) directs that

only certain kinds of actions can be class actions); Bernal, 22 S.W.3d at 433.

Here the trial court granted class certification under Rule 42(b)(3). To certify a class

under Rule 42(b )(3), in addition to the subsection (a) prerequisites, the trial court must "find that

'questions of law or fact common to the members of the class predominate over any questions

affecting only individual members, and a class action is superior to other available methods for the

fair andefficientadjudicationofthe controversy."' Lapray, 135 S.W.3d at663 (quoting Tex. R. Civ.

P. 42(b)(3)) (emphasis in original). Subsection (c )(l)(D) of Rule 42 also requires certain statements

to be included in an order granting or denying certification under Rule 42(b)(3). Relevant to this

appeal, the order "must state ... the elements of each claim or defense asserted in the pleadings."

Tex. R. Civ. P. 42(c)(l)(D)(i).

The Trial Court's Trial Plan

We begin with appellants' fifth issue because it is dispositive. Appellants urge that

the trial court abused its discretion "in failing to 'rigorously analyze' all certification requirements

under Rule 42, as evidenced by the legally deficient class-action 'trial plan' approved by the [trial]

court." Appellants focus, among other alleged deficiencies in the trial plan, on the omission of any

discussion or analysis of their affirmative defenses. 1

"[A] trial plan is required in every certification order to allow reviewing courts to

assure that all requirements for certification under Rule 42 have been satisfied." State Farm Mut.

Auto. Ins. Co. v. Lopez, 156 S.W.3d 550, 556 (Tex. 2004) (emphasis in original). "The formulation

of a trial plan assures that a trial court has fulfilled its obligation to rigorously analyze all

certification prerequisites and 'understands the claims, defenses, relevant facts, and applicable

substantive law in order to make a meaningful determination of the certification issues."' Id.

(quoting Bernal, 22 S.W.3d at 435 (quoting Castano v. American Tobacco Co., 84 F.3d 734, 744

(5th Cir. 1996))). "'Thus it is improper to certify a class without knowing how the claims can and

will be tried.'" Id. at 5 5 5.

Here, the trial court's order and the adopted trial plan fail to meaningfully address

appellants' pleaded defenses. We cannot ignore the trial court's failure to comply with the express

requirement in Rule 42 to state the elements of those defenses in its order. Tex. R. Civ. P.

42(c)(l)(D)(i). Further, by failing to include analysis of the pleaded defenses, the trial court failed

Appellants' other asserted deficiencies in the trial plan include that their affirmative

defenses require individualized proof, that the plan improperly includes claims for breach of the duty

of care and disclosure claims, that the plan improperly omits the element of bad faith as to the claim

of breach of the duty of loyalty, that the plan fails to address the effects of the aiding and abetting

claims against Statoil, and that the plan and the trial court's order make improper factual findings.

They specifically challenge the following sentence in the trial court's order: "Plaintiffs have

demonstrated that each member of the Class is the victim of a common course of conduct engaged

in by defendants" and the following sentence in the trial plan: "The Board allowed itself to be

steered into a transaction with Statoil by a management team who was intent on achieving a liquidity

event for their tens of millions of dollars in otherwise illiquid holdings in the Company."

to conduct the required "rigorous analysis" before ruling on the class certification. See Bernal,

22 S.W.3d at 435; see also Texas S. Rentals, Inc. v. Gomez, 267 S.W.3d 228, 247 (Tex.

App.-Corpus Christi 2008, no pet.) (noting that "difficult, if not impossible, for [the appellate

court] to determine if the class should have been certified" and "surmis[ing] that the trial court's

failure to include any discussion of these items in the trial plan is a result of its failure to rigorously

analyze [the issues] in light of the predominance requirement").

We conclude that the trial court abused its discretion by certifying a class without an

order complying with the express requirements of Rule 42 and "without formulating a trial plan

confirming that it has rigorously analyzed the requirements of Rule 42." See State Farm,

156 S.W.3d at 557 (emphasis in original). Thus we must decertify the class and remand the case to

the trial court. SeeBMG DirectMktg.,Inc. v. Peake, 178 S.W.3d 763, 778 (Tex. 2005)(decertifying

class and remanding so that trial court "may determine effect of ... defense on the requirements for

class certification"); National W. Life Ins. Co. v. Rowe, 164 S.W.3d 389, 390 (Tex. 2005) (per

curiam) (reversingjudgment of court of appeals that affirmed class certification and remanding cause

to trial court because trial court "did not conduct the rigorous analysis of the issues to be tried").

CONCLUSION

For these reasons, we decertify the class that the trial court certified, reverse, and

remand the cause for further proceedings consistent with this opinion. 2

Having concluded that certification was improper because the trial court's order and its trial

plan fail to meaningfully address pleaded defenses, we do not consider appellants' additional

challenges to the other certification prerequisites. See Union Pac. Res. Grp., Inc. v. Hankins,

111 S. W.3d 69, 75 (Tex. 2003) (reversing certification because none of the issues identified in trial

Melissa Goodwin, Justice

Before Justices Puryear, Goodwin, and Field

Reversed and Remanded

Filed: August 15, 2014

plan satisfied commonality requirement and noting that the court "need not consider [appellant]'s

additional challenges to the other certification prerequisites"); Texas Parks & Wildlife Dep 't v.

Dearing, 240 S.W.3d 330, 361 (Tex. App.-Austin 2007, pet. denied) (deferring further analysis of

propriety of class certification because impact of case on claims and defenses "will be integral to the

district court's consideration of class certification on remand"). Further, we express no opinion on

the proper outcome of a rigorous analysis under Rule 42. See North Am. Mortg. Co. v. 0 'Hara, l 53

S.W.3d 43, 44-45 (Tex. 2004) (per curiam) (declining to examine whether certification proper in

absence of trial plan and noting that court of appeals should have remanded case for further

certification proceedings "without dictating the result").

Tab 3

“Exhibit 1” filed with the Court by the district clerk on

June 5, 2015, which includes “Plaintiffs’ Proposed

Second Amended Plan for Trial of Class Claims”

filed in ~h~ou~i.'J, Teitas

of Travis

4:t

Oi"tr\cl court

June 5, 2015 03-15-00248-CV MAR i 9 'l.\J\5 ,

~·IC> {). M.

At ' '·oistricJClerl<

Velva l.. price,

Cause No. D-1-GN-11-003205

(Consolidated)

RAYMOND BOYTIM, et al., Individually and § IN THE DISTRICT COURT OF

on Behalf of All Others Similarly Situated, §

Plaintiffs, § TRAVIS COUNTY, TEXAS

vs. §

26lst JUDICIAL DISTRICT

BRIGHAM EXPLORATION COMPANY, et ~

al., §

Defendants.

~~~~~~~~~~~~~~§

AFFIDAVIT OF STEVEN M. JODLOWSKI IN SUPPORT OF PLAINTIFFS' RESPONSE

TO DEFENDANTS STATOIL ASA AND FARGO ACQUISITION, INC.'S

SUPPLEMENTAL BRIEF IN SUPPORT OF OPPOSITION TO CLASS

CERTIFICATION AND OBJECTION TO PLAINTIFFS' PROPOSED

AMENDED PLAN FOR TRIAL OF CLASS CLAIMS

1014504_1

I, STEVEN M. JODLOWSKI, declare as follows:

1. I am an attorney duly licensed to practice before all of the courts of the State of

California and am admitted pro hac vice in this action. I am associated with the law firm ofRobbins

Geller Rudman & Dowd LLP, one of counsel of record for plaintiffs. I have personal knowledge of

the matters stated herein and, if called upon, I could and would competently testify thereto.

2. I submit this affidavit in support of Plaintiffs' Response to Defendants Statoil ASA

and Fargo Acquisition, Inc.' s Supplemental Brief in Support of Opposition to Class Certification and

Objection to Plaintiffs' Proposed Amended Plan for Trial of Class Claims.

3. Attached are true and correct copies of the following exhibits:

Exhibit 1: Plaintiffs' Proposed Second Amended Plan for Trial of Class Claims;

and

Exhibit 2: Havens, et al. v. Pate, No. 2002-16085, Defendants' Fourth Amended

Original Answer (Harris Cnty. Dist. Ct. Aug. 19, 2005).

I declare under penalty ofperjury that the foregoing is true and correct. Executed this 19th

day of.March, 2015, at San Diego, California.

DLOWSKI

A Notary Public or other officer completing thi~cate verifies only the

identity of the individual who signed the document to which this certificate is

attached and not the truthfulness accurac or validi of that document.

State of California )

) ss:

County of San Diego )

Subscribed and sworn to (or affirmed) before me on this \'\ day of Y'l\ucl.--, ¢D\5', by

Steven M. Jodlowski, proved to me on the basis of satisfactory evidence to be the person who

appeared before me.

1014504_1

CERTIFICATE OF SERVICE

Pursuant to the attached Declaration of Service by E-Mail, I hereby certify that a true and

correct copy of the foregoing instrument has been served in accordance to the Texas Rules of Civil

Procedure, to those listed on the attached service list, on this 19th day of March 2015.

Isl Michael D. Marin

MICHAEL D. MARIN

-2-

1014504_1

DECLARATION OF SERVICE BY E-MAIL

I, June P. Ito, not a party to the within action, hereby declare that on March 19, 2015, I served

the attached AFFIDAVIT OF STEVEN M. JODLOWSKI IN SUPPORT OF PLAINTIFFS'

RESPONSE TO DEFENDANTS STATOIL ASA AND FARGO ACQUISITION, INC.'S

SUPPLEMENTAL BRIEF IN SUPPORT OF OPPOSITION TO CLASS CERTIFICATION AND

OBJECTION TO PLAINTIFFS' PROPOSED AMENDED PLAN FOR TRIAL OF CLASS

CLAIMS on the parties in the within action by e-mail addressed as follows:

Counsel for Defendant(s) ··-.--••

Timothy R. McCormick Thompson & Knight LLP timothy.mccormick@tklaw.com

Michael W. Stockham michael.stockham@tklaw.com

Timothy E. Hudson tim.hudson@tklaw.com

Debora B. Alsup debora.alsup@tklaw.com

Danley Comvn danlev.comvn(a).tklaw.com

Michael C. Holmes Vinson & Elkins L.L.P. mholmes@velaw.com

Jennifer B. Poppe jpoppe@velaw.com

Thomas S. Leatherburv tleatherburv@.velaw.com

Fields Alexander Beck Redden LLP falexander@beckredden.com

Parth S. Gejji pgejji@beckredden.com

Christopher R. Cowan ccowan@.beckredden.com

Counsel for Plaintiff( s)

Michael Burnett Armburst & Brown. PLLC mburnettlalabaustin.com

Kellv N. Reddell Baron & Budd. P. C. kreddell(a),baronbudd.com

Michael D. Marin Boulette & Golden LLP mmarinlalboulettegolden.com

Evan J. Smith Brodsky & Smith, LLC esmith@brodsky-smith.com

Marc L. Ackerman mackermanial.brodskv-smith.com

Hamilton Lindley Dunnam & Dunnam hlindlevlal dunnamlaw.com

Shane T. Rowlev Levi & Korsinskv LLP srowlevlalzlk.com

Joe Kendall Kendall Law Group, LLP jkendall@kendalllawgroup.com

Daniel Hill dhill@kendalllawgroup.com

Jamie J. McKev imckevlal,kendalllawgrouo.com

Denis F. Sheils Kohn. Swift & Graf. P.C. dsheils@.kohnswift.com

Brian J. Robbins Robbins Arroyo LLP brobbins@robbinsarroyo.com

Stephen J. Oddo soddo@robbinsarroyo.com

Edward B. Gerard egerardlalrobbinsarrovo.com

Katharine M. Ryan Ryan & Maniskas, LLP kryan@rmclasslaw.com

Richard A. Maniskas rmaniskaslalrmclasslaw.com

Jonathan M. Stein Saxena White P.A. isteinlalsaxenawhite.com

Willie C. Briscoe The Briscoe Law Firm wbriscoelalthebriscoelawfirm.com

Patricia C. Weiser The Weiser Law Firm, P.C. pw@weiserlawfirm.com

James M. Ficaro imflalweiserlawfirm.com

I declare under penalty of perjury that the foregoing is true and correct. Executed on

•~ ~ ._Ji!. ·. .J. •.· .

~ 4~fKl

March 19, 2015, at San Diego, California. ·. . ·.. .

JUNEP.ITO .~""-.- - - -

1014504_1

EXHIBIT 1

Cause No. D-1-GN-11-003205

(Consolidated)

RAYMOND BOYTIM, et al., Individually and § IN THE DISTRICT COURT OF

on Behalf of All Others Similarly Situated, §

Plaintiffs, § TRAVIS COUNTY, TEXAS

vs. §

261st JUDICIAL DISTRICT

BRIGHAM EXPLORATION COMPANY, et :

tl, §

Defendants.

~~~~~~~~~~~~~~~§

PLAINTIFFS' PROPOSED SECOND AMENDED PLAN

FOR TRIAL OF CLASS CLAIMS

1014363_1

TABLE OF CONTENTS

Page

I. PLAINTIFFS' CLAIMS ...................................................................................................... 2

A. Plaintiffs' Claim for Breach of Fiduciary Duty Against the Individual

Defendants ............................................................................................................... 3

B. Aiding and Abetting Breach of Fiduciary Duty Against Brigham and

Statoil ...................................................................................................................... .4

II. DEFENDANTS' PLEADED DEFENSES .......................................................................... 5

A. Defense Nos. I and 9 ............................................................................................... 6

B. Defense No. 2 ........................................................................................................... 6

C. Defense Nos. 3, 5-6 .................................................................................................. 7

D. Defense No. 4 ........................................................................................................... 8

E. Defense No. 7 ........................................................................................................... 9

F. Defense No. 8........................................................................................................... 9

G. Defense Nos. 10 and 11 ......................................................................................... 10

H. Defense No. 12.................................................................................... ,.................. 11

I. Defense No. 13 ....................................................................................................... 12

III. CLASS ISSUES ................................................................................................................. 12

A. Procedural History ................................................................................................. 12

B. Common Questions of Law and Fact Predominate ............................................... 13

I. Plaintiffs Will Prove Breach of Fiduciary Duty Through Common

Evidence ..................................................................................................... 14

2. Plaintiffs Will Prove with Common Evidence Causation and

Amount of Damages .................................................................................. 16

3. Defendants' Defenses Are Susceptible to Common Proof.. ...................... 17

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Pursuant to Tex. R. Civ. P. 42(d), this Court hereby adopts the following trial plan in connection

with its order granting certification of plaintiffs' claims against defendants. This plan provides a

detailed assessment of how a single trial can be conducted against Brigham Exploration Company

("Brigham" or the "Company"), the members of its Board of Directors (the "Individual Defendants" or

the "Board"), and Statoil ASA ("Statoil") on behalf of a proposed class of all holders of Brigham

common stock as of October 17, 2011. Based upon the voluminous written submissions of the parties

in connection with plaintiffs' motion for class certification, as well as hearings held on October 22,

2012, February 22, 2013, December 17, 2014, and March 31, 2015, it is evident to the Court that trial of

this action on a class-wide basis will present no unduly challenging manageability issues.

This plan addresses the class certification issues, the claims arising from defendants' actions,

the manner in which defendants' common course of conduct will be proven at trial, and other issues

relating to the management and superiority of a class-wide trial. As discussed below, this action

stems from the sale of Brigham to Statoil for $36.50 per share of Brigham stock. That sale was

completed on December 8, 2011, one-and-a-half months after Brigham and Statoil announced to

shareholders that the companies had entered into a definitive merger agreement. Plaintiffs allege

that Brigham's directors breached their fiduciary duties to shareholders in agreeing to and facilitating

the sale. Plaintiffs also bring a claim against Brigham and Statoil for aiding and abetting the breach

of fiduciary duty. In response to plaintiffs' claims, defendants have pleaded several defenses, which

are addressed below.

The Court envisions a single trial with the following procedural steps:

I. Plaintiffs will present their case-in-chief, submitting common evidence of defendants'

wrongdoing, class-wide injury, and total damages;

2. The Individual Defendants will present the defenses they wish to advance;

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3. Brigham and Statoil will present the defenses they wish to advance;

4. Plaintiffs will present their rebuttal case; and

5. The case will be submitted to the jury, which will enter a verdict based on a proposed

jury charge.

Counsel for plaintiffs are deeply experienced in takeover litigation, especially in takeover

cases after the acquisition closes, and have prepared similar cases for trial. Counsel for plaintiffs

have also tried numerous takeover cases on a class-wide basis, including at least one action in Texas.

See Ellowayv. Pate, 238 S.W.3d 882 (Tex. App.-Houston [14thDist.] 2007, no pet.). Plaintiffs will

present their case through the testimony of their experts; the testimony and documents of the

Individual Defendants, Brigham and Statoil; the testimony and documents of defendants' financial

advisors; and, potentially, the documents and testimony of Shell, ENI, Chevron and Total, four

potential buyers.

If a verdict for the plaintiffs results, judgment in a total, single monetary sum will be entered

in favor of the Class. A post-judgment proceeding will follow, in which the Court will approve the

procedure for distributing checks (or direct deposits) to each individual Class member based on

plaintiffs' expert's damage calculations. Plaintiffs will ask the Court to approve the final allocation

of damages. If a verdict is returned in favor of defendants, judgment dismissing the action with

prejudice would be entered.

I. PLAINTIFFS' CLAIMS

This action involves claims against Brigham's Board for breach of its fiduciary duties, and a

claim against the Company and Statoil for aiding and abetting the Board's breach of fiduciary duties.

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A. Plaintiffs' Claim for Breach of Fiduciary Duty Against the Individual

Defendants

The primary claim in this case is a claim for breach of fiduciary duty against the members of

Brigham's Board at the time of the acquisition. That claim is governed by Delaware law because

Brigham was a Delaware corporation. Article 8.02 of the Texas Business Corporation Act provides

that the internal affairs (including the actions of its Board Members) of a foreign corporation doing

business in Texas are controlled by the substantive law of the state of incorporation.

Directors owe fiduciary duties of care and loyalty to the corporation and its shareholders.

Mills Acquisition Co. v. MacMillan, Inc., 559 A.2d 1261, 1280 (Del. 1989); accord Revlon, Inc. v.

MacAndrews &Forbes Holdings, Inc., 506 A.2d 173, 179 (Del.1986). In the context of a change of

control, such as this, courts review directors' conduct under the enhanced scrutiny standard and must

employ "less tolerance for slack by the directors" and be cognizant of the fact that "[a]lthough the

directors have a choice of means, they do not comply with their [fiduciary] duties unless they

undertake reasonable steps to get the best deal." In re Netsmart Techs., Inc. S'holders Litig., 924

A.2d 171, 192 (Del. Ch. 2007); see also Omnicare, Inc. v. NCS Healthcare, Inc., 818 A.2d 914, 928

(Del. 2003); Revlon, 506 A.2d 173. The enhanced scrutiny test requires:

(a) a judicial determination regarding the adequacy of the decisionmaking process

employed by the directors, including the information on which the directors based

their decision; and (b) a judicial examination of the reasonableness of the directors'

action in light of the circumstances then existing.

Paramount Commc'ns v. QVC Network, 637 A.2d 34, 45 (Del. 1994); Omnicare, 818 A.2d at 931.

Under the enhanced scrutiny test, "[t]he directors have the burden of proving that they were

adequately informed and acted reasonably." Paramount, 637 A.2d at 45.

In addition, as part of their fiduciary duties to Brigham's shareholders, the Board must fully and

fairly disclose all material information within the Board's control. See Netsmart, 924 A.2d at 202; In re

Pure Resources, Inc., S'holders Litig., 808 A.2d 421, 448 (Del. Ch. 2002) ("When a document ventures

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into certain subjects, it must do so in a manner that is materially complete and unbiased by the omission

of material facts."). Here, plaintiffs contend that the Individual Defendants disseminated a Schedule

l 4D-9 ("Schedule l 4D-9") and a tender offer statement on Schedule TO ("Schedule TO"), filed with

the Securities and Exchange Commission on October 28, 2011, which was false and misleading and

failed to disclose all material information to Brigham shareholders in connection with the tender offer

from Statoil. The determination of whether the Board breached that duty in this instance turns on the

materiality of the alleged non-disclosures and omissions. Under relevant case law, courts determine

materiality by assessing whether there is a substantial likelihood that a reasonable shareholder would

consider the fact important in deciding how to vote. See Arnold v. Soc'y for Sav. Bancorp, 650 A.2d

1270, 1277 (Del. 1994); TSC Indus. v. Northway, Inc., 426 U.S. 438, 449 (1976).

B. Aiding and Abetting Breach of Fiduciary Duty Against Brigham and

Statoil

Plaintiffs also have a claim against Brigham and Statoil, for aiding and abetting of the

breaches of fiduciary duties by the Individual Defendants, as members of the Board of Brigham.

Rand v. Western Airlines, No. 8632, 1989 Del. Ch. LEXIS 118, at *14 (Del. Ch. Sept. 11, 1989)

("[I]fthere were objective evidence that the transaction benefits the fiduciaries at the stockholders'

expense, knowing participation by a third party might be inferable."). To prevail on their claim for

aiding and abetting a breach of fiduciary duty, plaintiffs must prove: (1) the existence of a fiduciary

relationship; (2) a breach of the fiduciary's duty; (3) knowing participation in that breach by Statoil;

and (4) damages proximately caused by the breach. Malpiede v. Townson, 780 A.2d 1075, 1097

(Del. 2001); In re Rural Metro Corp. S'holders Litig., 88 A.3d 54, 80 (Del. 2014). As to the third

element - knowing participation, plaintiffs must show that the buyout group "'sought to induce the

breach of a fiduciary duty"' or '"make factual allegations from which knowing participation may be

inferred."' In re Bj's Wholesale Club, Inc., C.A. No. 6623-VCN, 2013 Del. Ch. LEXIS 28, at *54-

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*55 (Del. Ch. Jan. 31, 2013). Knowing participation may be inferred where a buyout group:

(1) "directly 'sought to induce [a] breach of fiduciary duty'" by the board; (2) attempted to '"create

or exploit conflicts of interest in the board"'; (3) "'used knowledge of the breach to gain a bargaining

advantage in negotiations"' with the board; or (4) knew the "'terms of the transaction [were] so

egregious or the magnitude of the side deals ... so excessive as to be inherently wrongful."' Id.

II. DEFENDANTS' PLEADED DEFENSES

On January 13, 2015, defendants filed a Third Amended Answer to plaintiffs' petition. In it,

defendants plead the following defenses:

1. Plaintiffs' petition fails to state a claim for which relief can be granted;

2. The negotiation and process leading up to the signing of the merger agreement and

tender offer, as well as the decision to recommend the tender offer by the Individual Defendants, are

protected by the business judgment rule;

3. Defendants did not know, and in the exercise of reasonable care could not have

known, of any untruths or omissions in the Schedule 14D-9 or the Schedule TO;

4. The alleged misrepresentations and omissions were not material and did not

proximately cause any damages to plaintiffs;

5. Defendants acted in good faith and without any intent to deceive;

6. Defendants' alleged misstatements or omissions were made in good faith, with

genuine belief;

7. Pursuant to 8 Del C. §14l(e), defendants are not liable because they relied in good

faith upon the records of the corporation;

8. Plaintiffs' claims are barred because of payment or accord and satisfaction;

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9. Plaintiffs' generalized allegations of purported misrepresentations, deceit, or failure to

disclose are barred because of a failure to plead those claims with requisite specificity;

10. Plaintiffs' claims for damages are barred as a matter of law;

11. Plaintiffs' claims are barred under the 8 Del. C. § 102(b)(7) exculpation clause in

Brigham's Certificate of Incorporation;

12. Plaintiffs' claims are barred by the doctrines of waiver, acquiescence, acquiescence in

price, ratification, and estoppel; and

13. The recovery by plaintiffs, if any, should be precluded or reduced by virtue of the

doctrine of proportionate responsibility.

A. Defense Nos. 1 and 9

Defendants' first and ninth defenses are directed at the sufficiency of plaintiffs' pleadings,

which is a legal matter for the Court. Texas follows a "fair notice" standard for pleading, in which

courts assess the sufficiency of pleadings by determining whether an opposing party can ascertain

from the pleading the nature, basic issues, and the type of evidence that might be relevant to the

controversy. See Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 230 (Tex. 2004);

Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 896-97 (Tex. 2000); Boyles v. Kerr, 855

S.W.2d 593, 601 (Tex. 1993); see also Tex. R. Civ. P. 47(a). The test of fair notice is whether an

opposing attorney of reasonable competence, with the pleadings before him or her, could ascertain

the nature and basic issues of the controversy and the testimony that is probably relevant. Hand v.

Dean Witter Reynolds Inc., 889 S.W.2d 483, 489 (Tex. App.-Houston [14th Dist.] 1994, writ

denied).

B. Defense No. 2

In their second defense, defendants contend that the business judgment rule bars plaintiffs'

claims.

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The business judgment rule is an evidentiary presumption. Cede & Co. v. Technicolor, 634

A.2d 345, 360 (Del. 1993). Where shareholders challenge transactions approved by the board of a

corporation, the business judgment rule operates as "a presumption that in making a business decision

the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the

action taken was in the best interests of the company." Aronson v. Lewis, 473 A.2d 805, 812 (Del.

1984). A shareholder plaintiff may rebut the presumption by showing that a defendant breached any

one of the triads of their fiduciary duty - good faith, loyalty or due care. Citron v. Fairchild Camera &

Instrument Corp., 569 A.2d 53, 64 (Del. 1989). If the plaintiff makes this evidentiary showing, the

presumption is rebutted and the burden shifts to the defendant directors, the proponents of the

challenged transaction, to prove to the trier of fact the "entire fairness" of the transaction to the

shareholder plaintiff. Nixon v. Blackwell, 626 A.2d 1366, 1376 (Del. 1993).

C. Defense Nos. 3, 5-6

Defendants have raised three defenses alleging that they acted in good faith and without any

intent to deceive Brigham's shareholders.

The duty to act in good faith is technically a subset of the duty of loyalty. "Encompassed

within the duty of loyalty is a good faith aspect as well. 'To act in good faith, a director must act at all

times with an honesty of purpose and in the best interest and welfare of the corporation."' Shocking

Techs., Inc. v. Kosowsky, No. 7164-VCN, 2012Del. Ch. LEXIS 224, at *29 (Del. Ch. Sept. 28, 2012)

(citation omitted). Stated alternatively, a director who acts "reckless and indifferent as to the rights of

the stockholders" may breach the duty of good faith. Perrine v. Pennroad Corp., 47 A.2d 479, 489

(Del. Ch. 1946) (citing Karasik v. Pacific Eastern Corp., 180 A. 604 (Del. Ch. 1935)).

With respect to the defense that defendants did not know, or could not have known, of any

untruths or omissions in the Schedule l 4D-9 or Schedule TO, directors of a Delaware corporation

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are under a fiduciary duty to disclose all material information within the Board's control when they

seek shareholder action. Stroud v. Grace, 606 A.2d 75, 84 (Del. 1992); Arnold, 650 A.2d at 1277.

"The disclosure obligation . . . is said to be one that requires the disclosure of all material

information within the knowledge of the corporation (and thus available to the directors)." Behrens

v. United Investors Mgmt. Co., No. 12876, 1993 Del. Ch. LEXIS 217, at *42 (Del. Ch. Oct. 1, 1993).

D. Defense No. 4

In their fourth defense, defendants assert that the alleged misrepresentations and omissions

are not material and did not proximately cause damages or injuries to plaintiffs.

The Delaware Supreme Court has stated that the essential inquiry in analyzing a disclosure

claim is whether the alleged omission or misrepresentation is material. Arnold, 650 A.2d at 1277.

The objective definition of materiality employed by Delaware courts is adopted from the United

States Supreme Court's decision in TSC, 426 U.S. 438, which states, in pertinent part:

An omitted fact is material if there is a substantial likelihood that a reasonable

shareholder would consider it important in deciding how to vote . . . . It does not

require proof of a substantial likelihood that disclosure of the omitted fact would

have caused the reasonable investor to change his vote. What the standard does

contemplate is a showing of a substantial likelihood that, under all the circumstances,

the omitted fact would have assumed actual significance in the deliberations of the

reasonable shareholder. Put another way, there must be a substantial likelihood that

the disclosure of the omitted fact would have been viewed by the reasonable investor

as having significantly altered the "total mix" of information made available.

Id. at449.

Under Delaware law, once materiality has been shown, causation is satisfied. In In re Rural

Metro Corp. Stockholders Litig., 88 A.3d 54 (Del. Ch. 2014), the Court of Chancery held that,

"[w]hen seeking post-closing damages for breach of the duty of disclosure, however, the plaintiff

must prove quantifiable damages that are 'logically and reasonably related to the harm or injury for

which compensation is being awarded."' Id. at 104 (citing In re J.P. Morgan Chase & Co. S 'holder

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Litig., 906 A.2d 766, 773 (Del. 2006)). There, the court explained, "a [financial advisor's] actions

resulted in stockholders voting on the merger based on a proxy statement that contained materially

false disclosures and omissions about [financial advisor's] valuation analyses and conflicts.

Stockholders were denied the information necessary to make an informed decision whether to seek

appraisal. Causation is satisfied." Rural Metro, 88 A.3d at 107. In a later opinion, the court entered

judgment and awarded damages to the stockholder class at an identical $4.17 per share for the

plaintiff and each eligible class member. In re Rural/Metro Corp. Stockholders Litig., 102 A.3d 205

(Del. Ch. 2014). The showing of causation involved no individual issues of proof.

E. Defense No. 7

Defendants also invoke §141(e) of Delaware's corporation law, 8 Del. C. §141(e), as a

defense. Section 141 (e) provides that directors are protected from a breach of the duty of care when

the directors reasonably believe the information upon which they rely has been presented by an

expert selected with reasonable care and is within that person's professional or expert competence.

8 Del. C. § 141(e); see also Brehm v. Eisner, 746 A.2d 244, 262 (Del. 2000).

Section 141(e) does not reach claims for breaches of loyalty and good faith. See, e.g.,

Selectica, Inc. v. Versata Enters., No. 4241-VCN, 2010 Del. Ch. LEXIS 39, at *62 (Del. Ch.

Feb. 26, 2010) (recognizing that board's reliance on expert's advice may, in certain circumstances,

defeat a "due care claim"), aff'd, 5 A.3d 586 (Del. 2010).

F. Defense No. 8

In their eighth defense, defendants contend that plaintiffs' claims are barred because of

payment or accord and satisfaction. Three elements are necessary to prove an accord and

satisfaction: (1) that a bona fide dispute existed as to the amount owed that was based on mutual

good faith; (2) that the debtor tendered an amount to the creditor with the intent that payment would

be in total satisfaction of the debt; and (3) that the creditor agreed to accept the payment in full

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satisfaction of the debt. CitiSteel USA, Inc. v. Connell Ltd. P' shp, Luria Bros. Div., 758 A.2d 928,

931 (Del. 2000) (citing Acierno v. Worthy Bros. Pipeline Corp., 693 A.2d 1066, 1068 (Del. 1997)).

The burden to prove these elements is on the party alleging that the accord and satisfaction took

place. Id. at 1068-69.

G. Defense Nos. 10 and 11

Defendants also contend that plaintiffs' claims for monetary damages are barred as a matter

of law and under the 8 Del. C. § 102(b)(7) exculpation clause in Brigham's Certificate of

Incorporation. Although § 102(b )(7) provision does not operate to defeat the validity of a plaintiffs

claim on the merits, it permits a corporation to adopt a clause eliminating or limiting the personal

liability of a director to the corporation or its stockholders for monetary damages for breach of

fiduciary duty as a director, except in certain circumstances. Emerald Partners v. Berlin, 787 A.2d

85, 92 (Del. 2001).

Section 102(b)(7) applies only to directors; it does not authorize exculpation of officers.

Chen v. Howard-Anderson, 87 A.3d 648, 686 (Del Ch. 2014); McPadden v. Sidhu, 964 A.2d 1262,

1275-76 (Del. Ch. 2008). Nor does §102(b)(7) shield a corporation from monetary damages

stemming from the actions of its directors or officers. 8 Del. C. §102(b)(7).

A §102(b)(7) exculpation clause also cannot eliminate or limit the liability of a director for

any breach of the duty of loyalty or good faith, including a claim for non-disclosure. 8 Del. C.

§102(b)(7); accord Levy v. Stern, No. 211, 1996 Del. LEXIS 468, at *6 n.4 (Del. Dec. 20, 1996)

(§ 102(b)(7) "is inapplicable ... where the alleged breach entails bad faith, intentional misconduct, or

a breach of the duty ofloyalty"); Wayne Cnty. Emps. 'Ret. Sys. v. Corti, No. 3534-CC, 2009 Del. Ch.

LEXIS 126, at *25-*28 (Del. Ch. July 24, 2009), aff'd, 996 A.2d 795 (Del. 2010).

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"Because [§ 102(b)(7)] is an affirmative defense, the defendants would normally shoulder the

burden of establishing each of its elements, and the inapplicability of each of its four exceptions."

Rothenberg v. Santa Fe Pacific C01p., No. 11749, 1992 Del. Ch. LEXIS 106, at *12-*13 (Del. Ch.

May 18, 1992); In re Orchard Enters., Inc., 88 A.3d 1, 48 (Del. Ch. 2014).

H. Defense No. 12

Defendants' twelfth defense raises four related doctrines of equity-waiver, acquiescence,

ratification and estoppel - all of which defendants bear the burden of proving under Delaware law.

'"Waiver is the voluntary and intentional relinquishment of a known right. . . . It implies

knowledge of all material facts and intent to waive.' Moreover, 'the facts relied upon must be

unequivocal in nature."' Am. Family Mortg. Corp. v. Acierno, No. 290, 1994 Del. LEXIS 105, at

*13 (Del. Mar. 28, 1994) (quoting Realty Growth Investors v. Council of Unit Owners, 453 A.2d

450, 456 (Del. 1982)) (internal citations omitted). To be subject to the defense of acquiescence,

defendants must prove every plaintiff: (i) had full knowledge of their rights and all material facts;

(ii) possessed a meaningful choice in determining how to act; and (iii) acted voluntarily in a manner

showing unequivocal approval of the challenged conduct. N.J. Carpenters Pension Fund v.

infoGROUP, Inc., No. 5334-VCN, 2013 Del. Ch. LEXIS 43, at *25 (Del. Ch. Feb. 13, 2013). To

obtain the benefits of ratification, the defendants must prove, by a preponderance of the evidence,

that the plaintiffs consented to the switch after all material facts were disclosed. 0 'Malley v. Boris,

No. 15735-NC, 2002 Del. Ch. LEXIS 33, at *22 n.28 (Del. Ch. Mar. 18, 2002). "[T]he ratification

doctrine does not apply to transactions where shareholder approval is statutorily required." Gantler

v. Stephens, 965 A.2d 695, 714 (Del. 2009). '"Estoppel is the effect of the voluntary conduct of a

party whereby he is absolutely precluded ... from asserting rights which might perhaps have

otherwise existed, ... as against another person, who has in good faith relied upon such conduct, and

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has been led thereby to change his position for the worse."' Kahn v. Household Acquisition Corp.,

591A.2d166, 176 (Del. 1991).

I. Defense No. 13

Defendants' last defense is based on the doctrine of proportionate responsibility. Under

Chapter 33 of the Texas Civil Practice and Remedies Code, if a liability finding has been made by

the jury, the jury may be asked to detennine if other parties contributed to the harm for which

damages are sought. Tex. Civ. Prac. & Rem. Code Ann. §33.003(a) (2006). If so, the jury may

detennine the percentage of responsibility of each party and reduce or eliminate any damages owed

to a plaintiff. Id.

III. CLASS ISSUES

A. Procedural History

This action was initiated on October 17, 2011, when Raymond Boytim filed a petition

stemming from the announcement by Brigham and Statoil that the companies had entered into a

merger agreement. Several additional Brigham shareholders filed similar actions. The actions were

thereafter consolidated. On November 10, 2011, plaintiffs moved for an order preventing defendants

from closing the tender offer and taking down any tendered shares until defendants cured the

breaches of fiduciary duty set forth in plaintiffs' petition. That motion was denied, and Statoil

closed the transaction on December 8, 2011.

After the sale was consummated, plaintiffs filed a second amended consolidated petition,

which added a claim for damages. Plaintiffs also added factual allegations based on their review of

the documents and deposition testimony provided by defendants prior to the close of the transaction.

In early March 2012, plaintiffs filed a third amended class action petition for breach of fiduciary

duty. The petition added several additional named plaintiffs, but was otherwise identical to the

second amended petition filed in January. Discovery is ongoing.

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On September 17, 2012, plaintiffs moved for class certification of their claim that defendants

had breached their duties to Brigham's shareholders. Both parties have submitted voluminous

filings, and the Court has held numerous hearings, in connection with that motion. On October 22,

2012, the trial court held a hearing during which counsel for the parties providing opening

statements in support of their respective positions and four class representatives provided live

testimony. The Court held a second hearing on February 22, 2013. At that hearing, the Court

addressed defendants' objections to the class certification order and proposed trial plan. Five days

later, the Court issued an order certifying a class of former Brigham shareholders. An interlocutory

appeal followed.

On December 17, 2014, following disposition of defendants' interlocutory appeal, the Court

held a hearing to address the development of a revised trial plan which complies with Tex. R.

Civ. P. 42. Specifically, the Court explored the various defenses pleaded by defendants and the

defenses they expected to pursue at trial, and the Court analyzed the sources of proof defendants will

offer in support of these defenses. These issues were further explored through subsequent briefing

by the parties and a follow-up hearing held on March 31, 2015.

B. Common Questions of Law and Fact Predominate

Under Rule 42(b)(3) of the Texas Rules of Civil Procedure, the moving party must show that

the class should be maintained because common questions of fact or law predominate over any

questions affecting only individual members. Sw. Ref Co. v. Bernal, 22 S.W.3d 425, 435 (Tex.

2000) (if the moving party seeks to certify a predominance-of-common-questions action, the

commonality determination under Rule 42(a) is subsumed under the predominance determination).

The test for predominance is whether common or individual issues will be the object of most of the

efforts of the litigants and the Court. Id. at 434; Snyder Commc'ns, L.P. v. Magana, 142 S.W.3d

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295, 300 (Tex. 2004) ("In evaluating whether common issues predominate, courts must identify the

controlling substantive issues of the case and assess which issues will predominate to determine

whether those issues are in fact common to the class. Courts must therefore determine 'whether

common or individual issues will be the object of most of the efforts of the litigants and the court."')

(citing Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675, 693 (Tex. 2002)).

For all of their claims, plaintiffs will rely on common proof derived directly from Brigham's

directors, officers and executives, and from plaintiffs' expert(s), to prove their claims. Below is an

evidentiary outline demonstrating how this case will be tried as a class action without manageability

problems.

1. Plaintiffs Will Prove Breach of Fiduciary Duty Through

Common Evidence

The elements of breach of fiduciary duty are common to each member of the stockholder

class. Plaintiffs intend to prove at trial that defendants breached their fiduciary duties to

shareholders when they agreed to the sale of Brigham.

To prove their claims, plaintiffs will offer evidence of the defendants' activities found in the

contemporaneously created internal Brigham and Statoil documents; testimony from Brigham's

directors and officers, and certain of its executives; testimony from Statoil's executives; documents

and testimony from Jefferies, the financial advisor retained by the Brigham Board; and documents

and testimony from Shell, ENI, Chevron and Total, four other potential buyers of Brigham.

Plaintiffs believe that this evidence will show that defendants were acting in their own interests,

rather than in the interests of stockholders.

Plaintiffs also allege that the Board disregarded hundreds of millions of dollars in shareholder

value represented in the stand-alone plan of the Company, when it agreed to and recommended the

tender offer and approved the acquisition. Common evidence of this breach will include various

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minutes from the Board meetings, internal analyses conducted by Company management and

presented to the Board, as well as presentations provided by Jefferies to the Board. It will also

include expert testimony concerning the intrinsic value of the Company at the time it was sold.

Because a breach of fiduciary duty claim and an aiding and abetting claim share many of the

same elements, much of the evidence supporting plaintiffs' breach of fiduciary duty claim will also be

used to support the aiding and abetting claim. In addition to the evidence outlined above, the Court

understands that plaintiffs intend to introduce at trial evidence that, in the days leading up to the

merger, Statoil was informed that Ben Brigham did not have Board authorization to agree to a deal at

$36.50, yet Statoil nevertheless encouraged Ben Brigham to obtain full Board approval of the deal.

The Court also understands that plaintiffs will introduce evidence that Statoil negotiated

extensively with the Company and enjoyed access to the Company's confidential information during

the negotiation process and Statoil requested, and obtained, an exclusivity agreement from Brigham

to prevent competing bidders from topping or competing with its bid. According to plaintiffs, this

concession prevented Brigham from pursuing discussions with other potential bidders who were

interested in making a bid for the Company during this time. Moreover, as the Court understands,

plaintiffs intend to introduce evidence that Statoil sought to induce the Board's breaches of fiduciary

duty by ensuring that certain Board members and company insiders received various benefits that the

Company's unaffiliated public shareholders did not receive. For example, when the deal closed,

company insiders received over $60 million dollars for unvested stock options. Statoil also provided

golden parachutes to the rest of the management team, including post-merger employment contracts.

While this evidence is only illustrative of the type of evidence plaintiffs' intend to use to support

their aiding and abetting claim, it is common to the class and shows that the claim can be tried on a

class-wide basis. See In re Rural Metro Corp., 88 A.3d at 80.

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With respect to plaintiffs' claim that the Board breached its duty of candor, plaintiffs intend to

prove this claim through the Company's Schedule 14D-9 and Schedule TO, various internal documents

and testimony from Brigham's directors, officers and executives reflecting the true facts, and the

likelihood that those facts would be important to the shareholders' decision to tender their shares to

Statoil. In short, the focus of plaintiffs' claims is on defendants' actions leading up to the sale.

2. Plaintiffs Will Prove with Common Evidence Causation and

Amount of Damages

Plaintiffs intend to demonstrate causation through, inter alia, documents and testimony from

Brigham, its Board and Statoil, showing that the injury to Class members in the form of inadequate

consideration was foreseeable and an intended consequence of the actions of defendants in

structuring and agreeing to a sale of the Company. Oliver v. Boston Univ., No. 16570-NC, 2002

Del. Ch. LEXIS 21, at *24-*25 (Del. Ch. Feb. 28, 2002) (in merger cases, all shareholders suffer "a

common harm that is related to the allegedly wrongful merger and the inadequate disclosures

associated with it").

With the assistance of their expert(s), plaintiffs will use common proof to demonstrate injury

to Class members and calculate total damages for the Class without the need to resort to information

collected from individual Class members. That common proof will be expert testimony establishing

the difference between the true value of the Company and the amount actually received by the

shareholders. The amount actually received is the $36.50 that all shareholders received when they

either tendered their shares to Statoil or were cashed-out. If plaintiffs establish liability and

damages, class members will claim their pro rata portion of the judgment by submitting a claim

form showing the number of shares of Brigham stock they held at the time the merger was

announced. See Joseph v. Shell Oil Co., No. 7450, 1985 Del. Ch. LEXIS 458, at *14 (Del. Ch.

Feb. 8, 1985) ("In short, if a finding of damages occurs, the damages will be mathematically

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allocated on a per share basis to all the stockholders in similar circumstances. There is a total

absence of individual issues and therefore there would be no reason for the Court to make a separate

finding of damages as to each share or each shareholder."); Rural/Metro, 102 A.3d at 224-25.

3. Defendants' Defenses Are Susceptible to Common Proof

Once plaintiffs have concluded their case-in-chief, the burden will shift to defendants to

present evidence in support of their defenses. Based upon the parties' submissions in connection

with plaintiffs' motion, the Court believes that the defenses pleaded by defendants are subject to

common proof and will not present manageability problems. The Court assumes for purposes of this

trial plan that all of the defenses pleaded by defendants apply to plaintiffs' claims and will be

presented at trial.

As an initial matter, several of defendants' pleaded defenses (Nos. 1 and 9) are legal matters

for the Court, not factual matters for the jury, and can be resolved through pre-trial motion practice.

Moreover, because these defenses will resolve the claims of the entire class, if they have merit, they

do not present individualized issues which would preclude a class-wide trial on the merits of

plaintiffs' claims. With respect to defense No. 2 - regarding the business judgment rule - the

appropriate burden(s) shouldered by each of the parties at trial will be reflected in the jury

instructions. Because the burdens will govern the claims of the entire class, they will not present

individualized issues.

Defendants have raised three defenses (Nos. 3, 5 and 6) in which they assert that they acted

in good faith and without intent to deceive, and that they did not know of the untruths or omissions

at issue. These defenses will depend on many of the same sources of common proof used to support

plaintiffs' claims, including the testimony of the Individual Defendants, the testimony of current and

former executives, officers and managers at Brigham and Statoil, correspondence to and from the

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defendants during the sales process, and the Schedule 14D-9 and Schedule TO disseminated to

Brigham's shareholders. In similar vein, defendants' 8 Del C. §141(e) defense will center on the

Individual Defendants' testimony and beliefs regarding the opinions of the Board's financial

advisors, and internal corporate documents about the competence, selection and performance of

those advisors during the sales process.

With respect to defendants' fourth pleaded defense, materiality does not present an issue that

requires proof from individual Class members. As noted above, materiality is judged according to

an objective standard, Arnold, 650 A.2d 1277, and TSC, 426 U.S. 438, and, as such, can be proved

through evidence common to the Class. Malone v. Brincat, 722 A.2d 5, 12 (Del. 1998) (directors

who fail to disclose all material information breach their duty of candor to each and every one of the

Company's shareholders); see also Weatherly v. Deloitte & Touche, 905 S.W.2d 642, 653 (Tex.

App.-Houston [14th Dist.] 1995, writ dism'd w.o.j.) (concluding that where shareholders' injuries

arise from defendants' uniform scheme of misrepresentations, typicality is satisfied). Also, as noted

above, causation and damages do not raise individual issues of proof under Delaware law for post-

merger disclosure claims for damages. See infra §Il.D (citing Rural Metro, 88 A.3d 54, and

Rural/Metro, 102 A.3d 205). A failure of proof on these questions will not result in individual

inquiries; instead, it will simply end plaintiffs' disclosure claims.

In support of the defenses based upon §102(b)(7) (Nos. 10 and 11), the Individual

Defendants intend to offer, inter alia, proof of their positions on the Board and their actions leading

up to the acquisition; that they retained sophisticated financial and legal advisors during the process;

that they performed due diligence prior to agreeing to and recommending the tender offer and

consummating the transaction, including due diligence about the value of the Company; and that

they held numerous Board meetings to discuss and explore the various options available to the

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Company going forward. This proof will come in the form of testimony from the Individual

Defendants and internal corporate documents created during the process. Evaluating this evidence,

the jury will decide whether the Individual Defendants' actions (a) were that of a director as opposed

to an officer and (b) constituted a breach of care as opposed to breach of loyalty - thereby

immunizing a particular defendant (or defendants) from monetary damages. 8 Del. C. §102(b)(7);

Emerald Partners, 787 A.2d at 92.

Defendants also assert defenses based on the equitable doctrines of accord and satisfaction,

waiver, acquiescence, ratification and estoppel. The certified Class is comprised of"[ a]11 holders of

Brigham common stock as of October 17, 2011." The Class includes both shareholders who

tendered their Brigham shares to Statoil and shareholders who did not. Based upon defendants'

submissions, the Court understands that defendants intend to attempt to prove at trial that the former

group is subject to these defenses because they tendered their shares voluntarily and with full

knowledge of their rights and the material facts surrounding the acquisition. Defendants intend to do

so through evidence showing that Brigham entered into a merger agreement with Statoil, that Statoil

commenced a tender offer pursuant to that agreement, and that a percentage of Brigham's

shareholders tendered their shares to Statoil and were paid a single price - $36.50- for each of their

shares. They will also offer the Schedule 14D-9 and Schedule TO.

As a practical matter, these defenses merge with the merits of plaintiffs' non-disclosure

claims. Both claims turn on whether the Schedule 14D-9 and Schedule TO disclosed all material

facts to Brigham's shareholders. 1 If plaintiffs establish that defendants did not disclose all material

facts, plaintiffs will prevail on their non-disclosure claims and will negate one of the elements of the

Plaintiffs have stipulated that, if defendants can prove that all material information relating to the

merger was disclosed in the Schedule l 4D-9 or Schedule TO, or otherwise public! y made available,

defendants need not prove that each Class member was individually aware of these facts.

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defenses - i.e., that Brigham's shareholders had full know ledge of all material facts surrounding the

acquisition when they tendered their shares to Statoil. The doctrines of ratification, waiver,

acquiescence and estoppel only apply if the shareholder was fully informed. infoGROUP, 2013 Del.

Ch. LEXIS 43, at *25; Am. Family, 1994 Del. LEXIS 105, at* 13; O'Malley, 2002 Del. Ch. LEXIS

33, at *22 n.28.

If plaintiffs do not establish that shareholders were misled, plaintiffs' non-disclosure claims

fail and defendants are entitled to judgment on that claim, without the need for a separate finding on

the defenses. Either way, these defenses will be disposed of as the parties litigate the merits of

plaintiffs' claims.

Any issues concerning defendants' remaining defense - that another party may be

responsible· for all or a portion of any harm to the Class - can be resolved through the use of an

appropriate jury form. The jury will not be required to decide the issue of proportionate

responsibility unless and until, there is first an appropriate finding of liability. No issue of

proportionate responsibility arises unless there is first a determination of some responsibility for

damages by at least one defendant. If there is a finding ofliability, the jury can be asked in a verdict

form to determine how much of the responsibility for the harm, in percentage terms, to place on

defendants and any culpable non-parties.

DATED: March 19, 2015 Respectfully submitted,

ROBBINS GELLER RUDMAN

&DOWDLLP

RANDALL J. BARON

DAYID T. WISSBROECKER

STEVEN M. JODLOWSKI

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655 West Broadway, Suite 1900

San Diego, CA 92101

Telephone: 619/231-1058

619/231-7423 (fax)

ROBBINS GELLER RUDMAN

&DOWDLLP

SAMUEL H. RUDMAN

MARKS.REICH

MICHAEL G. CAPECI

58 South Service Road, Suite 200

Melville, NY 11747

Telephone: 631/367-7100

631/367-1173 (fax)

Class Counsel for Plaintiffs

BOULETTE & GOLDEN LLP

MICHAEL D. MARIN

Texas Bar #00791174

2801 Via Fortuna Drive, Suite 530

Austin, TX 78746

Telephone: 512/732-8900

5121732-8905 (fax)

Liaison Counsel

KENDALL LAW GROUP, LLP

JOE KENDALL

DANIEL HILL

JAMIEJ. McKEY

3232 McKinney A venue, Suite 700

Dallas, TX 75204

Telephone: 214/744-3000

2141744-3015 (fax)

THE BRISCOE LAW FIRM, PLLC

WILLIE C. BRISCOE

8150 N. Central Expressway, Suite 1575

Dallas, TX 75206

Telephone: 214/239-4568

281/254-7789 (fax)

ARMBURST & BROWN, PLLC

MICHAEL BURNETT

100 Congress A venue, Suite 1300

Austin, TX 78702

Telephone: 512/435-2300

512/435-2360 (fax)

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ROBBINS ARROYO LLP

BRIAN J. ROBBINS

STEPHEN J. ODDO

EDWARD B. GERARD

JUSTIN D. RIEGER

600 B Street, Suite 1900

San Diego, CA 92101

Telephone: 619/525-3990

619/525-3991 (fax)

DUNNAM DUNNAM HARMON WEST

LINDLEY &RYANLLP

HAMILTON P. LINDLEY

4125 W. Waco Drive

Waco, TX 76710

Telephone: 2541753-6437

2541753-7434 (fax)

BRODSKY & SMITH, LLC

EVAN J. SMITH

MARC ACKERMAN

Two Bala Plaza, Suite 510

Bala Cynwyd, PA 19004

Telephone: 610/667-6200

610/667-9029 (fax)

LEVI & KORSINSKY, LLP

SHANE T. ROWLEY

30 Broad Street, 24th Floor

New York, NY 10004

Telephone: 212/363-7500

866/367-6510 (fax)

KOHN, SWIFT & GRAF, P.C.

DENIS F. SHEILS

One South Broad Stre

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