Litigation Overview for the Russell 3000

An analysis of the Russell 3000’s material litigation since January 1, 2015, yields over 2,500 cases filed in U.S. federal courts as of May 9, 2018. While the allegations in each case are unique, the five most common natures-of-suit (NOS) for the Russell 3000’s litigation are securities cases, patent cases, breach of contract, antitrust violations, and other statutory actions. 

Let us take a look at the top 5 nature-of-suits in order from least to greatest.

There were 149 cases filed related to NOS 890, Other Statutory Actions. 74 of these cases have closed, leaving 75 cases still open and ongoing.

A Russell 3000 company has been named as a party in 149 cases alleging violations of antitrust law. Of these cases, 61 were filed as class actions. 60 of the total 149 cases have closed, leaving 89 cases still ongoing.

There have been 177 breach of contract cases for the Russell 3000 since Jan 1, 2015. Of these, 79 have closed, leaving 98 still open.

The Russell 3000 had a total of 600 patent cases. Of these, 318 have closed and 282 cases are still ongoing.

There were 811 securities cases filed for the Russell 3000. As of May 9, 2018, 443 of these cases have closed, leaving 304 cases open. Of the 811 cases, 689 were securities class actions.  Of the closed securities class actions, 21 cases were consolidated into a lead docket that is still ongoing.

The remaining cases had a number of outcomes. Voluntary dismissal was by far the greatest cause of a securities class action being dismissed with 64% of the total. Judgment for the defendants was the second most common outcome at 22%. Other outcomes were much less common, such as a settlement or judgment for the plaintiff (8%), remand to state court (3%) and administrative or other kinds of dismissals not related to the actual allegations (3%).

Many of the voluntary dismissals can be tied to a proliferation of merger & acquisition related securities class actions, which are often quickly dismissed after a company releases material information of value to the plaintiffs. 47% of the closed securities class action cases for the Russell 3000 filed since January 1, 2015 have been related to a merger & acquisition, perhaps making a 64% outcome for voluntary dismissals unsurprising.

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