California Public Employees' Retirement System v. Felzen
- Case Date: 12/7/1998
- Project Name: Class Action Reform
On December 7, 1998, WLF filed a brief in the U.S. Supreme Court urging the Court to hold that corporate shareholders who object to a proposed settlement in a shareholder derivative lawsuit should enter the case as formal parties if they wish to appeal the settlement to the court of appeals. Archer Daniels Midland Company was sued by certain shareholders charging that its price fixing practice which led to heavy fines was due to corporate mismanagement. After the trial court accepted the settlement, certain shareholders, who were not parties to the case, objected to the settlement and filed an appeal. The U.S. Court of Appeals for the Seventh Circuit ruled that the Federal Rules of Civil Procedure relating to shareholder derivative lawsuits do not permit disgruntled objectors the right to appeal the settlement. WLF argued that if there is to be a right to appeal, the rules should be changed as Congress intended rather than having a court modify the rule to permit the appeal.