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`CHARLES C. OSBORNE, JR. and
`HORTENSIA D. OSBORNE, Individually and
`On Behalf of All Others Similarly Situated,
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`Plaintiffs,
`
`v.
`
`
`INHIBITEX, INC., M. JAMES BARRETT,
`RUSSELL M. MEDFORD, A. KEITH
`WILLARD, GABRIELE M. CERRONE,
`RUSSELL H. PLUMB, MICHAEL A. HENOS,
`MARC L. PREMINGER, CHRISTOPHER
`MCGUIGAN, INTA ACQUISITION
`CORPORATION, and BRISTOL-MYERS
`SQUIBB COMPANY,
`
`
`Defendants.
`
`JOHN P. HEGARTY, Individually and On
`Behalf of All Others Similarly Situated,
`
`
`Plaintiff,
`
`
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`v.
`
`
`INHIBITEX, INC., MICHAEL A. HENOS, M.
`JAMES BARRETT, GABRIELE M.
`CERRONE, CHRIS MCGUIGAN, RUSSELL
`M. MEDFORD, RUSSELL H. PLUMB,
`MARC L. PREMINGER, A. KEITH
`WILLARD, INTA ACQUISITION
`CORPORATION, and BRISTOL-MYERS
`SQUIBB COMPANY,
`
`
`Defendants.
`
`IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
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`C.A. No. 7169-VCN
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`01: 11748044.3
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`099999.1952
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`EFiled: Jan 20 2012 10:24PM EST
`Transaction ID 42055224
`Case No. Multi-case
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`C.A. No. 7178-VCN
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` C.A. No. 7185-
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`FERNANDO GALO, Individually and On
`Behalf of All Others Similarly Situated,
`
`Plaintiff,
`
`v.
`
`INHIBITEX, INC., MICHAEL A. HENOS,
`M. JAMES BARRETT, GABRIELE M.
`CERRONE, CHRISTOPHER MCGUIGAN,
`RUSSELL M. MEDFORD, RUSSELL H.
`PLUMB, MARC L. PREMINGER, A.
`KEITH WILLARD, INTA ACQUISITION
`CORPORATION, and BRISTOL-MYERS
`SQUIBB COMPANY,
`
`Defendants.
`
`VICTOR VICKERS, On Behalf of All Others
`Similarly Situated,
`
`Plaintiff,
`
`v.
`INHIBITEX, INC., M. JAMES BARRETT,
`RUSSELL M. MEDFORD, A. KEITH
`WILLARD, MICHAEL A. HENOS, MARC
`L. PREMINGER, CHRISTOPHER
`McGUIGAN, GABRIELE M. CERRONE,
`RUSSELL H. PLUMB, BRISTOL-MYERS
`SQUIBB COMPANY, and INTA
`ACQUISITION CORPORATION,
`Defendants.
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`MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’
`MOTION TO PROCEED IN ONE JURISDICTION AND
`DISMISS OR STAY LITIGATION IN THE OTHER JURISDICTION
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`
`Table of Contents
`
`PRELIMINARY STATEMENT .................................................................................................... 1 
`
`STATEMENT OF FACTS ............................................................................................................. 3 
`
`ARGUMENT.................................................................................................................................. 5 
`
`I.  THE LITIGATION SHOULD PROCEED IN ONLY ONE FORUM............................... 5 
`
`A.  Both Georgia and Delaware Courts Possess the Power to Stay or Dismiss an
` Action in Favor of Another Forum. ................................................................................ 7 
`
`B.   Judicial Economy Favors Resolving Redundant Class Actions in One Forum. ............ 8 
`
`C.  Parallel Proceedings Invite the Risk of Inconsistent Rulings......................................... 9 
`
`D.  Plaintiffs’ Chosen Forum Warrants No Judicial Deference......................................... 11 
`
`II.  PREVAILING LAW FAVORS THE DELAWARE FORUM. ....................................... 13 
`
`CONCLUSION............................................................................................................................. 17 
`
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`
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Adirondack GP, Inc. v. Am. Power Corp.,
`1996 WL 684376 (Del. Ch. Nov. 13, 1996) ..............................................................................8
`
`Alber v. Inhibitex, Inc., et al.,
`Case No. 2012-CV-210222........................................................................................................1
`
`Astor BK Realty Trust v. Bell, et al,
`Case No. 2011-cv-201001 (Ga. Super., Fulton Cnty. July 11, 2011)........................................7
`
`Berman v. Burren Inc.,
`1996 Pa. Dist. & Cnty. LEXIS 254 (Pa. Ct. Com. Pl. Mar. 4, 1996) ........................................6
`
`Bloomingfield v. Liggett & Myers, Inc.,
`230 Ga. 484 (1973) ..............................................................................................................7, 13
`
`Commercial Union Ins. Co. v. Hoover Treated Wood Prods.,
`413 S.E.2d 217 (Ga. Ct. App. 1991)........................................................................................13
`
`Curtis 1000, Inc. v. Suess,
`24 F.3d 941 (7th Cir. 1994) (Posner, J.) ..................................................................................13
`
`Diedrich v. Miller & Meier & Assocs., Architects & Planners, Inc.,
`254 Ga. 734 (1985) ..................................................................................................................12
`
`Flagg Energy Dev. Corp. v. Gen. Motors Corp.,
`477 S.E.2d 402 (Ga. Ct. App. 1996)........................................................................................16
`
`Fludd v. Tiller,
`360 S.E.2d 647 (Ga. Ct. App. 1987)........................................................................................16
`
`Goggins v. Alliance Capital Mgmt., L.P.,
`279 F. Supp. 2d 228 (S.D.N.Y. 2003)......................................................................................12
`
`Hawthorn Suites Golf Resorts, LLC v. Fenneck,
`282 Ga. 554 (2007) ....................................................................................................................7
`
`In re Allion Healthcare S’holders Litig.,
`2011 WL 1135016 (Del. Ch. Mar. 29, 2011).............................................................................6
`
`In re Bear Stearns Cos., Inc. S’holder Litig.,
`2008 WL 959992 (Del. Ch. Apr. 9, 2008).................................................................................8
`
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`
`
`In re Citigroup Inc. S’holder Deriv. Litig.,
`964 A.2d 106 (Del. Ch. 2009)..................................................................................................12
`
`In re Countrywide Fin. Corp. Derivative Litig.,
`542 F. Supp. 2d 1160 (C.D. Cal. 2008) ...................................................................................10
`
`In re Mobile Commc’ns Corp. of Am. Consol. Litig.,
`1991 Del. Ch. LEXIS 4 (Del. Ch. Jan. 7, 1991), aff’d, 608 A.2d 729 (Del. 1992) .................10
`
`In re Topps Co. S’holder Litig.,
`924 A.2d 951 (Del. Ch. 2007).......................................................................................... passim
`
`McWane Cast Iron Pipe Corp. v. McDowell-Wellman Eng’g Co.,
`263 A.2d 281 (Del. 1970) ........................................................................................................15
`
`Nierenberg v. CKx, Inc.,
`C.A. No. 5545-CC, Ltr. (May 27, 2011)....................................................................................6
`
`Palkon v. Primedia, Inc., et al,
`Case No. 11A 05872-3 (Ga. Super., Gwinnett Cnty. Aug. 29, 2011) ...................................8, 9
`
`Peller v. Southern Co.,
`911 F.2d 1532 (11th Cir. 1990) ...............................................................................................14
`
`Rogers v. Guaranty Trust Co. of N.Y.,
`288 U.S. 123 (1933).................................................................................................................13
`
`Rosen v. Wind River Sys., Inc.,
`2009 Del. Ch. LEXIS 114 (Del. Ch. June 26, 2009) ...........................................................6, 10
`
`Ryan v. Gifford,
`918 A.2d 341 (Del. Ch. 2007)............................................................................................11, 14
`
`Schneider v. Vennard,
`183 Cal. App. 3d 1340 (Cal. Ct. App. 1986) .............................................................................9
`
`Sprint Nextel Corp. v. iPCS, Inc.,
`2008 WL 4516645 (Del. Ch. Oct. 8, 2008) ...............................................................................8
`
`Teamsters Local Nos. 175 & 505 Pension Trust Fund v. IBP, Inc.,
`123 F. Supp. 2d 514 (D.S.D. 2000) .........................................................................................14
`
`Witmer v. Casey,
`Nos. 2010-cv-7673-5, 2010-cv-7855-3,
`2010 WL 6634506 (Ga. Super., Dekalb Cnty. July 20, 2010) ........................................7, 9, 10
`
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`STATUTES
`
`10 Del. C. § 3114 ...........................................................................................................................15
`
`O.C.G.A. § 9-10-31.1.................................................................................................................7, 13
`
`O.C.G.A. § 9-11-43(c) ...................................................................................................................13
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`Defendants Inhibitex, Inc. (“Inhibitex” or the “Company”), M. James Barrett, Ph.D.,
`
`Russell M. Medford, M.D., Ph.D., A. Keith Willard, Gabriele M. Cerrone, Russell H. Plumb,
`
`Michael A. Henos, Marc L. Preminger, FSA, MAAA, and Christopher McGuigan, M.Sc., Ph.D.
`
`(collectively, the “Defendants”) respectfully submit this Memorandum in Support of their
`
`Motion to Proceed in One Jurisdiction and Dismiss or Stay Litigation in the Other Jurisdiction.
`
`A substantially similar motion has been filed and served in the a parallel action pending in the
`
`Superior Court of Fulton County, Georgia, captioned Alber v. Inhibitex, Inc., et al., Case No.
`
`2012-CV-210222 (complaint appended hereto as Exhibit A) (the “Georgia Action” and,
`
`collectively with the above-captioned actions, the “Actions”). Defendants respectfully request
`
`that the Georgia and Delaware courts confer to determine an appropriate form of order providing
`
`that these substantially similar class actions shall proceed in one court. For the reasons set forth
`
`below, Defendants submit that Delaware is the optimal forum for these nearly identical lawsuits,
`
`all of which turn on issues of Delaware corporate law.
`
`PRELIMINARY STATEMENT
`
`
`
`This putative class action lawsuit seeks to enjoin the proposed merger (the “Merger”) of
`
`Defendant Inhibitex with and into a wholly-owned subsidiary of Bristol-Myers Squibb Co.
`
`(“Bristol-Myers”). Plaintiff claims that the members of Inhibitex’s Board of Directors breached
`
`their fiduciary duties by deciding to enter into a merger agreement with Bristol-Myers, pursuant
`
`to which Bristol-Myers will commence a tender offer of $26.00 in cash for each share of
`
`Inhibitex common stock — a remarkable 162% premium to the closing price of Inhibitex stock
`
`on January 6, 2012, the last trading day prior to the announcement of the Merger. Prior to that
`
`announcement, the price of Inhibitex common stock had never exceeded Bristol-Myers’s $26 per
`
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`share offer. There is no dispute that Inhibitex is a Delaware corporation and that Delaware law
`
`will therefore govern Plaintiff’s claims. See Ex. A, Alber Am. Compl. ¶ 2.
`
`The plaintiffs in all of the Actions seek to represent identical putative classes of Inhibitex
`
`stockholders and raise nearly identical claims against an overlapping group of defendants,
`
`seeking the same relief, on the basis of the same alleged facts. Defendants respectfully submit
`
`that they should only have to defend these claims once, in a single forum, thus avoiding wasteful
`
`duplicative proceedings which would impose unnecessary inefficiencies and burdens on the
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`courts and parties, including the putative class of stockholders that plaintiffs seek to represent,
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`and the attendant risk of inconsistent results.
`
`
`
`Defendants respectfully request that the Georgia and Delaware courts confer to determine
`
`an appropriate form of order providing that these identical class actions shall proceed in just one
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`court. Because plaintiffs’ claims are governed by Delaware law, and for other reasons detailed
`
`below, Defendants believe that this forum, where the parties have already agreed to schedule a
`
`preliminary injunction hearing at the discretion and availability of the Court, is the optimal
`
`forum for this dispute. In bringing this motion in multiple courts, Defendants seek only to
`
`promote the orderly disposition of these claims and the efficient administration of justice: an
`
`order requiring the representatives of the plaintiff class to press and resolve their claims in a
`
`single court, subject to the controlling hand of a single judge. Defendants stand ready to defend
`
`against these claims — which they believe are entirely meritless — in any court, but they should
`
`not be whipsawed between competing lawsuits. Nor should multiple courts be required to
`
`devote care and attention to the same issues, the same arguments, and the same facts at the same
`
`time. Defendants have no objection to the plaintiff in the Georgia Action re-filing his complaint
`
`in this Court or seeking to otherwise participate in the Delaware Actions. In addition,
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`Defendants request that once a single forum is chosen that the presiding court thereafter
`
`consolidate the cases (if appropriate) and appoint a unified plaintiff leadership structure, and that
`
`the other court dismiss or stay any suits challenging the Merger that may remain on its docket.
`
`STATEMENT OF FACTS
`
`
`
`Inhibitex is a Delaware corporation with its principal place of business in Alpharetta,
`
`Georgia; Bristol-Myers is a Delaware corporation with its principal place of business in New
`
`York City, New York; Inta Acquisition Corp. (“Inta”) is a Delaware corporation and is a wholly-
`
`owned subsidiary of Bristol-Myers.1 On January 7, 2012, Inhibitex announced that it had
`
`entered into a Merger Agreement with Bristol-Myers and Inta pursuant to which Bristol-Myers
`
`will make a tender offer of $26.00 per share of all outstanding shares of Inhibitex common stock,
`
`to be followed by a statutory merger between Inhibitex and Inta. 2 The Merger price represents
`
`a 162% premium to Inhibitex’s closing price on January 6, 2012 (the last trading day before
`
`the Merger was announced), and represents premiums of 160%, 123%, and 192% over the
`
`average trading prices for Inhibitex stock for the one-week, one-month and three-month
`
`periods ending immediately before the date the Merger was announced.3 Bristol-Myers’s
`
`tender offer is currently scheduled to expire at midnight on February 10, 2012, subject to
`
`extension in certain circumstances as required or permitted by the merger agreement.4 Neither
`
`
`1 See the Verified Amended Osborne and Hegarty Compl. ¶¶ 9, 8-19; Galo Compl. ¶ 5; Vickers
`Compl. ¶¶ 8, 17, 18; Ex. A, Alber Am. Compl. ¶ 2.
`
` 2
`
` Verified Amended Osborne and Hegarty Compl. ¶¶ 2, 36; Galo Compl. ¶ 2; Vickers Compl. ¶¶
`32, 33; Ex. A, Alber Am. Compl. ¶ 21.
`
` 3
`
` Inhibitex Schedule 14D-9, p. 21 (attached as Ex. B).
`
` 4
`
` Ex. B, Schedule 14D-9, p. 1; Verified Amended Osborne and Hegarty Compl. ¶¶ 2, 36; Vickers
`Compl. ¶ 3; Ex. A, Alber Am. Compl. ¶ 21.
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`Bristol-Myers nor Inta are named as defendants in this case, but neither are named as defendants
`
`the Georgia litigation.
`
`
`
`Shortly after the January 7 announcement, four lawsuits were filed in the Delaware Court
`
`of Chancery challenging the Merger (the “Delaware Actions”). The Delaware Actions were each
`
`filed by purported Inhibitex stockholders seeking to represent the same putative class. Three
`
`were brought by the same lawyers and all make nearly verbatim allegations. The day after the
`
`first of the Delaware Actions was filed, another alleged Inhibitex stockholder, represented by
`
`different lawyers, filed a substantially identical class action challenging the Merger in the
`
`Superior Court of Fulton County, Georgia.
`
`
`
`On January 19, 2012, plaintiff in the Georgia action filed an Amended Complaint, an
`
`Emergency Motion for Preliminary Injunction, and an Emergency Motion for Expedited
`
`Discovery. The Defendants have not yet responded to those motions, and no expedited
`
`proceedings or hearings have been set by the Georgia court. In the Delaware Actions, by
`
`contrast, the parties anticipate submitting a proposed discovery and briefing schedule to the
`
`Court consistent with an agreed-upon February 6 hearing date. The plaintiffs in Osborne and
`
`Hegarty also filed a Verified Amended Class Action Complaint on January 20, 2012.
`
`
`
`The Delaware and Georgia Actions arise from identical facts, assert the same claims, and
`
`seek substantially the same relief on behalf of the same proposed class from substantially similar
`
`defendants. For example, all of the Actions:
`
`Arise out of the proposed acquisition of Inhibitex by Bristol-Myers. Compare
`Verified Amended Osborne and Hegarty Compl. ¶ 1; Galo Compl. ¶ 1; Vickers
`Compl. ¶¶ 1-6; Ex. A, Alber Am. Compl. ¶¶ 21-26.
`
`Purport to proceed on behalf of the same putative class of all Inhibitex
`stockholders. Compare Verified Amended Osborne and Hegarty Compl. ¶¶ 1, 8,
`24; Galo Compl. ¶¶ 18-35; Vickers Compl. ¶¶ 19, 23; Ex. A, Alber Am. Compl.
`¶¶ 1, 35.
`
`
`•
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` •
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`Name as defendants Inhibitex and all members of its Board of Directors.
`Compare Verified Amended Osborne and Hegarty Compl. ¶ 1; Galo Compl. ¶¶ 6-
`14; Vickers Compl. ¶¶ 8-16; Ex. A, Alber Am. Compl. ¶¶ 2-10.
`
`Allege that Inhibitex’s directors breached their fiduciary duties under Delaware
`law in connection with the Merger. Compare Verified Amended Osborne and
`Hegarty Compl. ¶¶ 4, 78-88; Galo Compl. ¶¶ 42-46; Vickers Compl. ¶¶ 5, 19-22;
`Ex. A, Alber Am. Compl. ¶¶ 31-34.
`
`Allege that Inhibitex’s directors failed to obtain adequate consideration for the
`proposed merger. Compare Verified Amended Osborne and Hegarty Compl. ¶ 4,
`78-88; Galo Compl. ¶¶ 3, 44; Vickers Compl. ¶¶ 62-66; Ex. A, Alber Am. Compl.
`¶¶ 45-50.
`
`Seek primarily injunctive relief. Compare Verified Amended Osborne and
`Hegarty Compl. at page 29; Galo Compl. at p. 16; Vickers Compl. ¶¶ 6, 69, 70,
`74; Ex. A, Alber Am. Compl. ¶¶ 49, 52, 60, 62.
`
`
`
` •
`
`
`
` •
`
`
`
` •
`
`
`
` •
`
`In addition, the Georgia Action and three of the above-captioned actions challenge the
`
`
`
`
`
`sufficiency of the disclosures in Inhibitex’s Schedule 14D-9, filed with the Securities and
`
`Exchange Commission on January 17, 2012 (Ex. B). Verified Amended Osborne and Hegarty
`
`Compl. ¶¶ 84-88; Ex. C, Vickers Compl. ¶¶ 47-60; Alber Am. Compl. ¶¶ 49, 52, 60, 62.
`
`
`
`I.
`
`
`
`ARGUMENT
`
`THE LITIGATION SHOULD PROCEED IN ONLY ONE FORUM.
`
`Courts frequently confer to discuss the appropriate venue for multi-jurisdictional merger
`
`lawsuits such as these. Former Chancellor Chandler has recognized the inherent problems with
`
`multi-forum deal litigation:
`
`The potential problems, as one can imagine, are numerous. Defense counsel is
`forced to litigate the same case — often identical claims — in multiple courts.
`Judicial resources are wasted as judges in two or more jurisdictions review the
`same documents and at times are asked to decide the exact same motions. Worse
`still, if a case does not settle or consolidate in one forum, there is the possibility
`that two judges would apply the law differently or otherwise reach different
`outcomes, which would then leave the law in a confused state and pose full faith
`and credit problems for all involved.
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`
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`In re Allion Healthcare S’holders Litig., 2011 WL 1135016, at *4 (Del. Ch. Mar. 29, 2011). The
`
`former Chancellor Chandler also recommended the approach that Defendants now take: “file
`
`motions in both (or however many) jurisdictions where plaintiffs have filed suit, explicitly asking
`
`the judges in each jurisdiction to confer with one another and agree upon where the case should
`
`go forward.” Id. at *4 n.12; see also Nierenberg v. CKx, Inc., C.A. No. 5545-CC, Ltr. (May 27,
`
`2011) (describing the CKx litigation as a “positive example of the process envisioned by Allion –
`
`that is, plaintiffs acting in a cooperative manner to consolidate duplicative cases and work
`
`together towards a resolution of their claims, while defendants are able to defend against those
`
`claims only once, in a single jurisdiction”); Rosen v. Wind River Sys., Inc., 2009 Del. Ch. LEXIS
`
`114, at *27 (Del. Ch. June 26, 2009) (to avoid the litigation of “nearly identical actions
`
`simultaneously in two distant forums,” the Court had “contacted [the California Judge] to discuss
`
`how best to proceed”); Berman v. Burren Inc., 1996 Pa. Dist. & Cnty. LEXIS 254, at *4 (Pa. Ct.
`
`Com. Pl. Mar. 4, 1996) (Pennsylvania and Delaware courts conferred to decide where case
`
`should proceed). The former Chancellor characterized this approach as “one (if not the most)
`
`efficient and pragmatic method to deal with this increasing problem,” and noted that this method
`
`had worked for him “in every instance when it was tried.” In re Allion, 2011 WL 1135016, at
`
`*4. The Defendants thus respectfully request that the Delaware and Georgia courts implement
`
`this cooperative and efficient approach. The interests of efficiency, comity and consistency will
`
`best be served if these lawsuits are litigated in a consolidated, organized proceeding before a
`
`single court. Allowing duplicative, virtually identical proceedings to continue in two separate
`
`courts is a recipe for waste, confusion, inconsistent rulings, and would impose needless and
`
`onerous burdens on the courts and parties, a result that all jurisdictions disfavor.
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`A.
`
`
`Both Georgia and Delaware Courts Possess the Power to Stay or Dismiss an
`Action in Favor of Another Forum.
`
`This Court and the Georgia court each have the authority to dismiss or stay the Actions
`
`before them. The Georgia General Assembly has affirmatively provided that a Georgia court
`
`“shall decline” to adjudicate a matter when it “finds that in the interest of justice and for the
`
`convenience of the parties and witnesses a claim or action would be more properly heard in a
`
`forum outside this state.” O.C.G.A. § 9-10-31.1; see also Hawthorn Suites Golf Resorts, LLC v.
`
`Fenneck, 282 Ga. 554, 556 (2007) (affirming trial court’s dismissal on grounds of forum non
`
`conveniens because it found Louisiana was a more convenient forum than Georgia for the
`
`subject litigation). That affirmative statutory command is supplemented by the Court’s inherent
`
`power and discretion to dismiss or stay actions when proceeding in multiple forums would waste
`
`the courts’ and the parties’ resources. See Bloomingfield v. Liggett & Myers, Inc., 230 Ga. 484,
`
`485 (1973) (a court has the inherent power to stay proceedings to “‘control the disposition of the
`
`causes on its docket with economy of time and effort for itself, for counsel, and for litigants’”)
`
`(quoting Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)). In fact, Georgia courts have stayed
`
`cases in deference to parallel litigation proceeding in other jurisdictions, including Delaware.
`
`See Order for Transfer of Actions, Witmer v. Casey, Nos. 2010-cv-7673-5, 2010-cv-7855-3,
`
`2010 WL 6634506 (Ga. Super., Dekalb Cnty. July 20, 2010) (ordering separate actions filed in
`
`different jurisdictions challenging the same proposed merger to proceed in a single forum, where
`
`“given the substantial similarities between the [actions],” proceeding “in one forum [would]
`
`preserve judicial and party resources, avoid unnecessary duplication of efforts and avoid the risk
`
`of potentially inconsistent outcomes”) (Order attached as Exhibit C); Order, Astor BK Realty
`
`Trust v. Bell, et al, Case No. 2011-cv-201001 (Ga. Super., Fulton Cnty. July 11, 2011) (staying
`
`plaintiffs’ claims in favor of the Delaware Court of Chancery where “two cases . . . assert
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`
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`substantially similar claims on behalf of the same putative class against the same defendants”)
`
`(Order attached as Exhibit D); Order, Palkon v. Primedia, Inc., et al, Case No. 11A 05872-3 (Ga.
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`Super., Gwinnett Cnty. Aug. 29, 2011) (same) (Order attached as Exhibit E).
`
`
`
`
`
`While the public policy of Delaware strongly disfavors staying litigation involving the
`
`fiduciary duties of Delaware directors, see, e.g., In re Topps Co. S’holder Litig., 924 A.2d 951,
`
`953 (Del. Ch. 2007) (denying motion to stay class action despite earlier-filed actions in New
`
`York, citing Delaware’s interest in applying its own corporate law), Delaware courts likewise
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`have the authority to dismiss or stay duplicative actions. A decision to stay “rests within the
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`sound discretion of the court,” and “[t]he court should inform its analysis with considerations of
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`comity and the necessities of an orderly and efficient administration of justice.” In re Bear
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`Stearns Cos., Inc. S’holder Litig., 2008 WL 959992, at *5-8 (Del. Ch. Apr. 9, 2008) (staying
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`Delaware action in favor of contemporaneously filed New York action).
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`B.
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`Judicial Economy Favors Resolving Redundant Class Actions in One Forum.
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`This Court or the Georgia court should invoke their inherent authority to stay the action
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`before them and permit this lawsuit to proceed in one court. The alternative — allowing
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`duplicative parallel proceedings to continue on essentially the same action in courts in both states
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`— would create waste, confusion, and potentially conflicting rulings and would impose needless
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`inefficiency on the courts and the parties. This result is disfavored by all jurisdictions. See, e.g.,
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`Sprint Nextel Corp. v. iPCS, Inc., 2008 WL 4516645, at *4 (Del. Ch. Oct. 8, 2008) (noting that
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`“‘[d]uplicative proceedings are disfavored because they waste judicial and financial resources,
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`and because the competing proceedings create the appearance of an unseemly race to decide with
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`a potential for inconsistent rulings’”) (quoting Bear Stearns, 2008 WL 959992, at *7);
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`Adirondack GP, Inc. v. Am. Power Corp., 1996 WL 684376, at *7 (Del. Ch. Nov. 13, 1996)
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`(noting, in staying Delaware litigation in favor of substantially similar Pennsylvania litigation,
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`that “[i]f the same factual disputes must be resolved in both cases, allowing both to go forward
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`carries the attendant risk of inconsistent verdicts and would be a waste of both this Court’s and
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`the Pennsylvania court’s resources”); Witmer, 2010 WL 6634506, at *1; Order, Astor BK Realty
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`Trust, Case No. 2011-cv-201001 (Ga. Super., Fulton Cnty. July 11, 2011); Order, Palkon v.
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`Primedia, Inc., et al, Case No. 11A 05872-3 (Ga. Super., Gwinnett Cnty. Aug. 29, 2011).
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`Absent the relief sought here, Defendants will face duplicative discovery requests,
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`briefing schedules, case management deadlines, court appearances, hearings, and potentially
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`preliminary injunction applications, trials, and appeals before four courts in two states. Indeed, a
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`preliminary injunction hearing is already expected to be set for February 6, 2012 in Delaware,
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`and the Georgia plaintiff is currently seeking to schedule a competing hearing. Holding the same
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`hearing in two different courts would impose an unreasonable burden on the Delaware and
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`Georgia courts, and prosecution of multiple putative class actions also would likely be
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`“detrimental to plaintiffs and the class members,” since “[a]dditional litigation would require
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`greater attorneys’ resources and possibly higher attorney’s fees, thus reducing the amount of
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`[any] recovery.” Schneider v. Vennard, 183 Cal. App. 3d 1340, 1349-50 (Cal. Ct. App. 1986).
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`Moreover, in the event the plaintiffs in the Actions obtain class certification, multiple certified
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`classes would require multiple “sets of notices which would have the potential for confusing
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`class members.” Id. at 1350. For these common sense reasons, “absent extraordinary
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`justification . . . the pendency of multiple class actions alleging the same claims on behalf of the
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`same putative class against the same defendants should be avoided.” Joseph M. McLaughlin,
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`McLaughlin on Class Actions § 5:65 (6th ed. 2009).
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`C.
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`Parallel Proceedings Invite the Risk of Inconsistent Rulings.
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`Dismissal or stay by one of the two courts is also necessary to eliminate the risk of
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`inconsistent rulings. Because the Actions filed in different jurisdictions seek similar injunctive
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`relief,5 the risk of inconsistent rulings is particularly acute here; courts in the different
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`jurisdictions could issue conflicting preliminary or permanent injunctions. For example, if one
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`court holds that the Merger may be consummated under Delaware law while another enjoins it,
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`Defendants would be bound in one state by the Merger Agreement to consummate the Merger,
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`while in another state they would be enjoined from proceeding with the Merger. Similarly, now
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`that plaintiffs have amended their petitions to seek additional disclosures after tender offer
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`materials are filed, Defendants might be ordered to disclose different information by different
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`courts. This risk of inconsistent and mutually exclusive outcomes should be avoided. See Wind
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`River, 2009 Del. Ch. LEXIS 114, at *26-27 (“[T]his Court appreciates the importance, where
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`possible, of avoiding situations where two courts of competent jurisdiction end up aligned on a
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`collision course, which could result in conflicting judgments.”); see also In re Mobile Commc’ns
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`Corp. of Am. Consol. Litig., 1991 Del. Ch. LEXIS 4, at *47 (Del. Ch. Jan. 7, 1991) (“[T]o litigate
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`the [two shareholder class actions] separately would subject the defendant to the risk of different
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`standards of conduct with respect to the same action”), aff’d, 608 A.2d 729 (Del. 1992); In re
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`Countrywide Fin. Corp. Derivative Litig., 542 F. Supp. 2d 1160, 1172 (C.D. Cal. 2008)
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`(“Proceeding in parallel also creates the risk of conflicting results in enjoining a multibillion
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`dollar merger that impacts [] innumerable shareholders.”); Witmer, 2010 WL 6634506, at *1
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`(transferring a case because adjudication in one forum will “avoid the risk of potentially
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`inconsistent outcomes”).
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`Indeed, each of the complaints expressly pleads that “[t]he prosecution of separate
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`actions by individual members of the Class would create the risk of inconsistent or varying
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`adjudications with respect to individual members of the Class that would establish incompatible
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`5 Compare Verified Amended Osborne and Hegarty Compl. ¶¶ 7, 82, 88, 92; Galo Compl. pp.
`16-17; Vickers Compl. ¶¶ 6, 69, 70, 74; Ex. A, Alber Am. Compl. ¶¶ 49, 52, 60, 62.
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`standards of conduct” for Defendants.6 Plaintiffs thus concede that the prosecution of separate
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`actions creates a serious risk of conflicting rulings and should be avoided. The same principle
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`applies to the prosecution of parallel class actions in multiple fora. A dismissal or stay in one
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`forum in favor of unified adjudication in the other will eliminate the risk that different courts
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`could impose incompatible standards of conduct on Defendants. At the same time, there is no
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`risk that any plaintiff will be deemed without judicial protection, as the putative claims are
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`identical and any relief obtained in one forum will inure to the benefit of all class members.
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`Defendants will raise no objection if the plaintiff(s) in one forum should wish to join in the
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`action in the other, and believe that counsel for all plaintiffs should participate in unified
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`representation of the class to ensure administrative efficiency.
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`D.
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`Plaintiffs’ Chosen Forum Warrants No Judicial Deference.
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`Because plaintiffs in each of the duplicative Actions purport to represent a nationwide
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`class of Inhibitex stockholders, plaintiffs’ choices of forum should not be given deference.
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`Courts generally give little deference to plaintiffs’ choice of forum in stockholder class actions.
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`See Ryan v. Gifford, 918 A.2d 341, 349 (Del. Ch. 2007) (“A shareholder plaintiff does not sue
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`for his direct benefit. . . . Thus, this Court places less emphasis on the celerity of such plaintiffs
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`and grants less deference to the speedy plaintiff’s choice of forum.”); In re Topps, 924 A.2d at
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`956-57 (“In the representative action context, . . . [a] first-filing plaintiff has no legitimacy to
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`‘call forum’ for all the other stockholders of a corporation, as if their rights turned on a
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`schoolboy playground convention.