A number of exciting trial court and appellate court decisions were rendered in 2016 interpreting CPLR Article 9, New York state’s class action statute.1 In addition to those decisions discussed last September2 the courts dealt with a variety of issues including the premature evaluation of the merits of a proposed “disclosure only” settlement, the approval, preliminarily, of the Metropolitan Museum of Art’s “Pay what you wish, but you must pay something” class action, the certification of a tenant’s class action alleging improper deregulation of apartments notwithstanding the landlord’s receipt of J-51 tax benefits and the decertification, in part, of a class action brought by credit card terminal lessees alleging unreasonable fees and a failure to reveal the full terms of the lease.
‘Disclosure Only’ Settlements
After a proposed merger or acquisition is announced it is not uncommon for shareholders to file one or more class actions alleging breach of fiduciary duty by corporate officers in, inter alia, failing to disclose necessary information and/or failing to achieve a greater purchase price and seeking to enjoin the merger.3 Shortly thereafter a settlement may be proposed which, in exchange for a general release to the corporations and their corporate officers, one or more of the participating corporations will disclose additional information to allow shareholders to make a more informed decision in approving or disapproving the merger or acquisition. These “disclosure only” settlements have on occasion been strongly criticized.4
