Plaintiffs' Lawyers Pursue Non-U.S. Securities Litigation Alternatives After Morrison

One of the questions posed in the wake of the U.S. Supreme Court's landmark decision in Morrison v. National Australia Bank is whether the Court's holding might encourage securities claimants foreclosed by Morrison from U.S. court to attempt to pursue their claims in their home countries or in other jurisdictions.

The January 10, 2011 action of two U.S. law firms in filing a claim in the Netherlands against Belgian financial services giant Fortis on behalf of a specially formed foundation suggests the process of looking outside the U.S. may have begun.


As detailed here, in October 2008, Fortis shareholders filed a securities class action lawsuit against Fortis, certain of its directors and officers, and its offering underwriters in the Southern District of New York, seeking damages based on alleged violations of the U.S. securities laws.

Fortis is a Belgium-based financial company that in late 2008 received a massive bailout from the governments of Belgium, the Netherlands and Luxembourg. Fortis' shares trade on several European exchanges and its ADRs trade over-the-counter in the U.S. 

In their amended complaint, the plaintiffs alleged that the defendants misrepresented the value of its collateralized debt obligations; the extent to which its assets were held as subprime-related mortgage backed securities; and the extent to which its ill-fated decision to acquire ABN-AMRO had compromised the company's solvency.

In a February 2010 decision (discussed here), then-District Judge Denny Chin entered an order, applying the then-applicable jurisdictional standards under the Second Circuit's opinion in the Morrison case, granting with prejudice the defendants' motion to dismiss.

The Investors' Dutch Claim

In a January 10, 2011 press release (here), two U.S. securities law firms announced that they had filed an action in Utrecht Civil Court on behalf of a specially formed foundation, Stichting Investor Claims Against Fortis. An English translation of the lawsuit can be found here (Hat Tip to the Am Law Litigation Daily for the copy of the complaint.) Netherlands law allows foundations to bring collective actions on behalf of investors who affirmatively join the action.

The lawsuit is filed against Ageas NV/BV, as Fortis is now known, certain of its directors and officers, and its offering underwriters.

As described in the press release, the Dutch lawsuit's allegations largely mirror the allegations in the previously dismissed lawsuit U.S law. Owing to the peculiarities of the relevant Dutch laws however, the recently filed lawsuit does not directly seek damages; rather, according to the press release, it seeks a judicial declaration that Fortis defrauded investors in the 2007 rights issue the company conducted to acquire ABM Amro. If the Foundation succeeds in establishing liability, the case will proceed to a claims phase in which investors can attempt to recover compensatory damages.

The press release states that more than 140 institutional investors - "including many of the largest pension funds in Europe" - and over 2,000 individual claimants have joined the foundation. The press release also asserts that shareholders' collective losses are in the tens of billions of euros.

The press release states that the foundation represents investors in Europe, the Middle East, Australia - and, interestingly enough, the U.S. The press release also states that the Foundation's director previously worked with one of the two U.S. law firms in negotiating the $450 million class action settlement in the Netherlands in 2007 in the Royal Dutch Shell lawsuit. (Background regarding the Royal Dutch Shell settlement, including further background regarding the Dutch collective action statute can be found here.)

Read the article in its entirety at the D&O Diary, a blog by Kevin LaCroix.

For more information:

To learn more about non-U.S. class actions, subscribers may access Litigating Securities Class Actions, Chapter 7: Non-US Class ActionsAll readers may access a free excerpt by clicking the Attachment: link at the top of this post.

Litigating Securities Class Actions is also available for purchase in the LexisNexis Store.