The underlying suit, filed against Globe Life — formerly known as Torchmark Corporation — targets alleged misconduct by the company's board of directors and executive officers. Each complaint in the consolidated action asserts at least one Caremark oversight claim, a theory that courts have described as possibly the most difficult theory in corporation law upon which a plaintiff might hope to get a judgment.
Judge Amos L. Mazzant applied an eight-factor framework drawn from Delaware Court of Chancery Rule 23.1, noting that no binding federal precedent sets out the criteria for appointing lead counsel in a shareholder derivative suit. The factors include counsel's competence and experience, access to resources, quality of the pleadings, performance in the litigation to date, proposed leadership structure, the derivative plaintiff's relationship to the entity, and any conflicts of interest.
The competence-and-experience factor favored Plymouth's proposed team because Scott+Scott recently secured a mid-trial settlement of $190 million in the first Caremark oversight claim to make it to trial in Delaware history. The court gave that achievement moderate weight, however, because all competing firms were found competent to litigate the case.
The quality-of-pleadings factor slightly favored the rival Sugarbaker camp — the Catherine M. Sugarbaker Family Trust, backed by Robbins LLP and Sbaiti & Company PLLC — because Sugarbaker's complaint made demand-futility allegations against each director by name, while Plymouth's did not. The court acknowledged that director-by-director pleading is not always strictly required but noted that group pleading can signal insufficient particularization under the demand-futility standard.
Plymouth prevailed on the performance-in-litigation factor by intervening in a parallel Texas Business Court proceeding filed by a separate plaintiff, James E. Walker Jr., and obtaining a stay of that action pending the outcome of motions in the federal consolidated case. The court reasoned that a dismissal in the state proceeding could have preclusive effect on the federal claims, and that Plymouth's recognition of and response to that risk demonstrated vigorous advocacy. Plymouth also filed suit in Delaware to enforce a Section 220 books-and-records demand and obtained a settlement, further distinguishing its pre-litigation conduct.
On the lead-plaintiff question, the court held that Plymouth's institutional profile — a Massachusetts public employee retirement system established in 1937 that manages pension funds for county employees and other local governmental units and more than $1.5 billion in investments, and that has served as lead or co-lead plaintiff in securities class actions — and its specific disclosure of its Globe Life stock ownership and acquisition date gave it a clear edge. Sugarbaker neither disclosed its ownership stake nor specified when it acquired Globe Life shares, leaving the court without a basis to assess its standing or financial interest.
The court also declined to give weight to a joint proposal submitted by Sugarbaker and original co-lead plaintiff Jui Cheng Hsiao that would have installed Robbins and Sbaiti as co-leads with current counsel Rosen Firm P.A. and Glancy Prongay & Murray LLP on an executive committee. The court noted the proposal arrived after full briefing and two weeks after oral argument, and that Plymouth was not consulted.
The court vacated the prior leadership order, appointed Steckler Wayne & Love PLLC as liaison counsel, and directed plaintiffs' counsel to meet and confer on a schedule for a consolidated complaint within fifteen days of the entry of the order.