The October 21 edition of the New York Law Journal has a roundup (regist. req'd) of recent decisions on the applicability of the SLUSA discovery stay provisions to parallel state court derivative actions. The authors find that the trend in the case law is against imposing a discovery stay in this situation, but it is worth noting that there has been some recent contrary authority that is not discussed in the article.
Quote of note: "Thus, of the eight cases analyzed, [six] denied a stay of discovery in the derivative action, frequently with the proviso that the discovery would not be shared with the federal securities action. One stayed discovery based upon the derivative action counsel's stated intent to share the fruits of that discovery with the federal securities action. Only one stayed discovery despite the absence of evidence of collusion and where the derivative complaint was filed a year before the federal securities complaint."Posted by Lyle Roberts at November 2, 2005 6:15 PM | TrackBack