David Marcus writing for The Deal, adds to the growing commentary suggesting that plaintiffs’ lawyers who file class actions, especially those challenging mergers, will be inclined to increasingly avoid Delaware Courts if the Court continues to impose more stringent prerequisites for awarding attorneys’ fees. The article is available here and refers to a hearing last month in the matter involving related cases in both California and Delaware in connection with the $580 million sale of Clarient Inc. to GE Healthcare.

The Chancellor for the Court of Chancery warned lawyers at the hearing that he may not approve fees that are made part of a substantive settlement as opposed to a settlement reached first on the substantive terms and then subsequently the parties address fees separately. Over the last year or so in particular, we have written on this general topic periodically on these pages. See, e.g., here, here and here. The Delaware dilemma, as Marcus describes it, is for the Court to maintain high standards without scaring away the corporate litigation on which it thrives.

Alison Frankel, in a separate article for Thompson Reuters, available here, addresses a suit that was filed outside of Delaware, ostensibly raising antitrust issues, regarding the same transaction challenged in the Delaware Court of Chancery on state law claims, also involving the same Del Monte deal. The Del Monte decision by the Delaware Court of Chancery was highlighted on these pages here. One issue is whether the suit filed in California, challenging the same alleged deficiencies in the deal, added federal claims at least in part as a means of avoiding scrutiny from the Delaware bench.

Some pundits posit that the Delaware Court of Chancery has a love-hate relationship with plaintiffs who file class actions. Viewed in certain circles as the paladin for orthodoxy in corporate litigation, the Court of Chancery must maintain high standards, though wags speculate that if the high standards incentivize more plaintiffs to file elsewhere, the Court may have less influence on corporate law if an increasing number of cases are decided outside of Delaware.

UPDATE: The Securities Law Practice Center honored us here by including this post in their weekly “Top 5 Corporate and Securities Blog Posts”. Eric Ruth on Delaware, Inc. refers to this story here.