Since I am up to date on my summaries of key business litigation cases from the Delaware Chancery Court and Delaware Supreme Court, I thought I would include some commentary. I have often included in my posts the comments of several corporate law professors who are skeptical about the motives of some activist shareholders. Now I would like to share a different point of view. Excerpted below is information from the American Association for Justice, formerly known as the American Trial Lawyers Association, and what they view as efforts by AOL to sway public opinion against lawyers who sue big companies like themselves.
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" … on the America Online (AOL) website… titled "Most Outrageous Lawsuits." It appeared in the money and finance section of AOL and is also prominently displayed on the AOL home page.
" We have seen this propaganda before. The "crazy lawsuits" they describe come directly from groups like Citizens Against Lawsuit Abuse (CALA) and the American Tort Reform Association (ATRA), groups whose sole mission is to dismantle the civil justice system and eliminate accountability for corporate negligence. In the past, when such front groups have provided examples of "cases," they haven’t even been real.
" AOL is preying on an unsuspecting public that assumes what is posted on its site is news, all to make the case that they, and other negligent corporations, should not be held accountable for wrongdoing in our courts.
" There is good reason for AOL to invest its resources in the misinformation campaign to eliminate the right of Americans to seek justice. In the past few years, it is the civil justice system that has been the last resort for shareholders and investors to hold AOL accountable for their negligence. The following are just a few examples of the trouble AOL has gotten in:
* Just this week AOL agreed to pay $246 million to compensate the University of California for losses to their pension and endowment funds after the company’s stock prices plunged in 2001-2002. The University alleged that AOL inflated it stock price prior to its merger with Time-Warner by misrepresenting its sales, revenues and subscriber numbers.
* On February 26, 2007, Time Warner reached agreements to pay $405 million to settle lawsuits related to past accounting problems at AOL.
* On February 7, 2007, AOL reached a $105 million settlement with the California State Teachers’ Retirement System that claimed that AOL executives and bankers had artificially boosted the value of its stocks prior to buying Time Warner.
* In December, 2006, AOL settled a securities fraud case for $50 million with the state of Alaska.
* In September, 2006, AOL members joined together in a class action suing AOL for violating their privacy by posting their search queries online. AOL made public the search queries of over 600,000 members.
* In January, 2006, AOL settled a class action for $25 million after the company was accused of wrongfully billing its customers.
* In 2005, Time Warner settled a $2.4 billion securities fraud lawsuit stemming from their misstatement of advertising revenue on the eve of its merger with AOL.
* In 2004, AOL settled two class actions that claimed it had continued to bill plaintiffs after their subscriptions were cancelled.
The American Association for Justice has made several attempts to get this propaganda pulled from the website but AOL has refused.