Brigham Exploration Company, Ben M. Brigham, David T. Brigham, Harold D. Carter, Stephen P. Reynolds, Stephen C. Hurley, Hobart A. Smith, Scott W. Tinker, Statoil ASA and Fargo Acquisition, Inc. v. Raymond Boytim, Hugh Duncan, Robert Fioravanta, Walter Schwimmer, Michael Ohler, Ryan Ohler, Walter Ohler, Jr., the Edward J. Goodman Life Income Trust and the Edward J. Goodman Generation Skipping Trust, Jeffrey Whalen, and Howard Weisberg, Individually, 03-15-00248-CV

Background

Brigham Exploration (a Delaware corporation) agreed to be acquired by Statoil ASA via a $36.50 per-share tender offer announced October 17, 2011; transaction closed December 8, 2011.
Plaintiffs (shareholders who owned Brigham stock as of the announcement date) allege Brigham directors breached fiduciary duties (loyalty, good faith, care) in a conflicted, management-driven sale that deprived public shareholders of fair value; plaintiffs also assert aiding-and-abetting claims against Statoil.
Key factual allegations: management and Jefferies steered a sale to Statoil, withheld valuation analyses (including a Jefferies 30-rig model), secret ‘‘handshake’’ price negotiations by CEO Ben Brigham, and lucrative merger-related payments and accelerated option vesting for insiders.
Plaintiffs sought expedited injunctive relief during the tender offer but the deal closed; they then amended to seek damages on behalf of a class.
After multi-year proceedings and an initial appeal that required the trial court to better explain how it would address defendants’ pleaded defenses at trial, the trial court certified a class defined as “all holders of common stock of Brigham Exploration Company as of October 17, 2011” and adopted an amended trial plan. Defendants appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Class definition (shareholders as of announcement)	Class properly defined to include all holders on announcement date; Delaware law commonly uses that date and standing attaches at time terms were fixed	Class overbroad because it includes shareholders who later sold on the open market or tendered shares; those purchasers/later sellers lack standing or ratified/acquiesced	Court (trial court, defended on appeal) upheld announcement-date class; Delaware precedent (Celera, Triarc, etc.) supports inclusion of those who sold before closing; acquiescence/ratification defenses generally inapplicable here
Adequacy/typicality of named representatives	Named reps are familiar with the case, participated in discovery, testified live, communicated with counsel, and will fairly protect the class	Defendants contend several reps lack familiarity or knowledge (especially regarding aiding-and-abetting claims vs. Statoil) and thus are inadequate/atypical	Trial court’s factual findings on adequacy and typicality were supported; live testimony and deposition record warranted deference under abuse-of-discretion review
Trial plan rigor regarding defendants’ pleaded defenses	Plaintiffs’ amended trial plan states elements of each defense, explains class-wide proof and trial procedures in line with Bernal and the remand order	Defendants contend the plan ‘‘glosses over’’ defenses (acquiescence, ratification, waiver, estoppel, proportionate responsibility) and is insufficiently detailed to show a manageable class trial	Trial court conducted the required ‘‘rigorous analysis’’ on remand, the plan addresses defenses and explains how they will be disposed of by class-wide proof; many affirmative defenses inapplicable under Delaware law
Damages and predominance	Damages measured per-share as difference between expert fair value and offer price; that is a common, class-wide calculation; individual sales prices are irrelevant under Delaware law	Defendants argue damages would require individualized inquiries into each shareholder’s sale price/date, defeating predominance	Court/trial plan follows Delaware practice: per-share damages are common and provable by expert valuation; predominance satisfied

Key Cases Cited

Southwestern Ref. Co. v. Bernal, 22 S.W.3d 425 (Tex. 2000) (trial-plan and class-certification standards)
In re Celera Corp. S’holder Litig., 59 A.3d 418 (Del. 2012) (standing and class inclusion for shareholders holding at merger announcement)
In re Rural Metro Corp. S’holders Litig., 88 A.3d 54 (Del. Ch. 2014) (class-wide trial on fiduciary-duty and aiding-and-abetting claims; damages measure)
Gantler v. Stephens, 965 A.2d 695 (Del. 2009) (ratification doctrine not available where statutorily required shareholder approval exists)
Cinerama, Inc. v. Technicolor, Inc., 663 A.2d 1156 (Del. 1995) (conflicted director manipulation vitiates neutrality of board)
Dieter v. Prime Computer, Inc., 681 A.2d 1068 (Del. Ch. 1996) (merger liability focuses on fixing of terms, not mere consummation)