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Court of Appeal Has "No Comment" On Trulia

In 2016, the Delaware Court of Chancery famously put the brakes on disclosure only settlements, warning "to the extent that litigants continue to pursue disclosure settlements, they can expect that the Court will be increasingly vigilant in scrutinizing the 'give' and the 'get' of such settlements to ensure that they are genuinely fair and reasonable to the absent class members". In re Trulia, Inc. Stockholder Litigation, 129 A.3d 884 (Del. Ch. 2016).

In a recently issued (but not published) opinion, a California Court of Appeal declined to overturn a trial court's approval of a settlement based on Trulia.  Evangelista v. Duggan, 2020 Cal. App. LEXIS 1062.  Finding itself limited by the procedural and evidentiary posture of the case, the Court's opinion does not address Delaware law and expressly declines to comment on whether Delaware law should apply to settlement of disclosure-only settlements in California courts.  According to the Court, however, all parties agreed that "the trial court was required to apply California law to the procedural question of the standards for approval of a class action settlement."  The unresolved question seems to be whether a California trial court must apply Trulia and determine the substantive question of whether the disclosures were material.

We have no comment, but please don't quote us on that . . .

Because the opinion was not certified for publication, its "no-comment" position may not be cited or relied upon by courts and parties under Rule 8.1115(a) of the California Rules of Court.

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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
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Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...

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