Professor Ribstein — who was prescient in predicting the outcome of the corporate case of the decade — can rest easy.
In a ruling issued yesterday afternoon, the Delaware Supreme Court upheld the Delaware Chancellory Court’s decision dismissing the civil lawsuit brought by certain Disney shareholders against the board of Walt Disney Co. for approving the rather generous $140 million severance package paid to former Disney executive Michael Ovitz after Ovitz was effectively fired by his longtime friend and former Disney CEO Michael Eisner for essentially doing nothing during Ovitz’s year as president Disney. A copy of the decision is here, and here are initial comments from corporate law scholars Professor Ribstein, Professor Bainbridge and Professor Smith.
Steven Schulman, the former Milberg Weiss partner who has bigger problems now than the loss in the Disney-Ovitz case, pursued the case on behalf of certain Disney shareholders and contended that the Disney board’s decision-making process amounted to a series of sham “jam sessions” in which the board abrogated its responsibilities to Disney shareholders by rubberstamping the Eisner-supported severance deal for Ovitz. However, the Delaware Supreme Court upheld the Chancellory Court’s decision that was critical of the Disney board, but concluded that Eisner and the other Disney directors acted in good faith in approving Ovitz’s termination without cause and thus, were immunized from liability to shareholders regardless of whether approving the generous severance may have been a bad decision.

When you put a dozen of so strangers in a jury room together, weird things happen.
That’s certainly been the case recently in Chicago, where the current big news is that the defense team for former Illinois Governor George Ryan is seeking a new trial based on jury misconduct after the jury convicted Ryan on all 18 counts of a federal corruption indictment in a six-month trial earlier this year (previous post here). Although jury misconduct motions are always longshots, based on news reports, this one has a better than typical chance if only a few of the allegations of juror misconduct turn out to be true.
In the Ryan case, the allegation is that one of the jurors looked up a definition of “good faith deliberations” in attempting to persuade a holdout juror that she was not deliberating in good faith. Inasmuch as the holdout was ultimately dismissed from the panel for unrelated reasons, the trial judge denied Ryan’s first juror misconduct motion. However, Ryan’s defense team is now demanding a new hearing into allegations that there was so much pressure put on the holdout — and so many other jurors either lied in their jury questionnaire forms or did not follow the court’s instructions — that the jury deliberations were utterly skewed and a new trial is required.
Such conduct is a growing issue in high-profile trials as information about such trials is readily available to jurors who routinely work or engage in recreation on their computers each day. This is particularly important in a case such as Lay-Skilling, where pre-trial motions indicated widespread bias (see also here) against the defendants among prospective jurors. During the trial, several media outlets — including the hometown newspaper, the Houston Chronicle — covered the trial by innovatively blending traditional media reports and columns with blogging and podcasts. Although a valuable resource for the general public, such coverage could easily affect jurors who disregard the court’s instruction not to read ongoing media reports about the trial. For example, before and during the Lay-Skilling trial, the Chronicle’s Enron webpage prominently promoted the newspaper’s business columnist’s columns and blog that regularly ridiculed the defendants and called for their conviction, and also promoted regular blog posts from a former Enron Task Force prosecutor. It is certainly the media’s perogative to cover a trial in that manner, but the potential effect of such coverage on the jury pool would seem to mitigate strongly in favor of a more liberal rule in favor of changing the venue of such trials than has traditionally been applied.