In Re Lawson Software, Inc. Shareholder Litigation, C.A. No. 6443-VCN (Del. Ch. May 27, 2011). This short letter ruling by the Delaware Court of Chancery applied Rule 23 to certify this case as a class action to pursue claims challenging the acquisition of Lawson by GGC Software Holdings, Inc.

Class Certification Analysis.

The Court employs a two-step analysis to address a motion for class certification. First, under Court of Chancery Rule 23(a), class certification requires a showing of: (i) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation. Second, if those four criteria are met, the Court considers whether one of the standards of Rule 23(b) has been established.

The distinctions between the subsections of Rule 23(b) are not well defined and not mutually exclusive; Delaware courts have viewed actions challenging the fiduciary duties of directors in carrying our corporate transactions, as properly certifiable under both subdivisions (b)(1) and (b)(2). Under either subdivision, “certification of a mandatory (i.e., non-opt-out) class is appropriate” and “decisions are res judicata as to the entire class”.

By contrast, unlike certification under Rule 23(b)(3)–which requires “that class members be given actual notice and the right to opt out”–notice to absent class members and opt-out rights are at the Court’s discretion for a class certified under Rule 23(b)(2).

The Court explained why Rule 23(a) was satisfied and why the requirements of both Rules 23(b)(1) and 23(b)(2) were satisfied because of the risk of varying adjudications if the claims were not tried together and because the equitable relief sought would benefit the entire class if the plaintiff prevailed.