Royal Arms of the Kingdom of Scotland. Note the lion rampant.
The Chief Judge of the Seventh Circuit enjoys hurling verbal bolts of lightning. At least you would think so if you read what His Honor, Frank Easterbrook, wrote this week in Robert F. Booth Trust v. Crowley, No. 10-3285 (7th Cir. June 13, 2012).
An appeal by a class action gadfly, Theodore H. Frank, so riled Judge Easterbrook that he and the other panel members not only granted Mr. Frank the main relief he asked for (the formal right to appear in the case as an "intervenor") but also gave him something he didn't request (throwing out the case on the merits).
The suit charged two Sears board members with violating the bar in antitrust law against serving "as a director or officer in any two corporations . . . that are . . . competitors". 15 U.S.C. 19(a)(1). One of the two sat on the boards of AutoNation and AutoZone, and the other held a spot on the Jones Apparel Group board. But the complaint didn't say the "interlocking directorates" hurt Sears, except to assert that the interlock raised a risk that the feds might perhaps someday think about maybe bringing an action to de-interlock the directorates.
Sears chose to settle with the plaintiffs, who sued "derivatively" (i.e., on behalf of Sears) to purge the company from the sin of tempting antitrust enforcers to file a case. Mr. Frank moved the district court to let him into the action so he could protest the deal, which would have paid the plaintiffs' lawyers $925,000 but Sears investors nothing. When the district court told him to go away, he filed an appeal to the Seventh Circuit.
Then the Easterbrookian thunderbolts started to fly. They included these:
- "It seems odd to allow investors, who stand to gain if producers with market power cooperate, to invoke an antitrust doctrine that is designed for strangers' benefit."
- "Antitrust suits are notoriously costly."
- "That the plaintiffs say the have other investors' interests at heart does not make it so."
- "[T]his litigation is so feeble that it is best to end it immediately, as both Sears and Frank unsuccessfully asked the district judge to do."
- "The only goal of this suit appears to be fees for the plaintiffs' lawyers."
- "It is an abuse of the legal system to cram unnecessary litigation down the throats of firms whose directors sever on multiple boards, and then use the high costs of antitrust suits to extort settlements (including undeserved attorneys' fees) from the targets."
- "The suit serves no goal other than to move money from the corporate treasury to the attorneys' coffers, while depriving Sears of directors whom its investors freely elected."
The panel thus reversed denial of Mr. Frank's motion to intervene and ordered the district court "to enter judgment for defendants."
Why the court thought it had the merits before it escapes Blawgletter.
But once you start throwing those lightning bolts we suspect you might have a hard time stopping.
Too much fun. WAY too much, perhaps.