Court Opinion

ID: 4075641
Source: CourtListenerOpinion
Date Created: 2016-09-30 06:14:51.316617+00
Date Added: 2024-06-11T14:32:40.806464
License: Public Domain

ACCEPTED
                                                                                              03-15-00248-CV
                                                                                                      7922603
                                                                                   THIRD COURT OF APPEALS
                                                                                              AUSTIN, TEXAS
November 24, 2015                                                                      11/20/2015 11:03:34 AM
                                                                                            JEFFREY D. KYLE
                                                                                                       CLERK
                                  No. 03-15-000248-CV
                        IN THE THIRD COURT OF APPEALS                   RECEIVED IN
                       THIRD JUDICIAL DISTRICT OF TEXAS            3rd COURT OF APPEALS
                                                                       AUSTIN, TEXAS
                                AUSTIN, TEXAS
                                                                  11/20/2015 11:03:34 AM
                                                                     JEFFREY D. KYLE
            BRIGHAM EXPLORATION COMPANY, BEN M.                  BRIGHAM,  Clerk

         DAVID T. BRIGHAM, HAROLD D. CARTER, STEPHEN C. HURLEY,
         STEPHEN P. REYNOLDS, HOBART A. SMITH, SCOTT W. TINKER,
                STATOIL ASA, AND FARGO ACQUISITION, INC.,

                                       Appellants,

                                            vs.

                  RAYMOND BOYTIM, et al., INDIVIDUALLY
            AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,

                                        Appellees.

           Appeal from the 261st Judicial District Court of Travis County, Texas
                           Trial Court No. D-1-GN-11-003205
                        The Honorable Lora Livingston, Presiding

           PLAINTIFFS-APPELLEES’ OMNIBUS ANSWERING BRIEF
             TO OPENING BRIEFS OF APPELLANTS BRIGHAM,
               STATOIL ASA AND FARGO ACQUISITION, INC.

                                           MICHAEL D. MARIN
                                           State Bar No. 00791174
                                           BOULETTE GOLDEN & MARIN L.L.P.
                                           2801 Via Fortuna Drive, Suite 530
                                           Austin, TX 78746
                                           Telephone: 512/732-8900
                                           512/732-8905 (fax)
                                           mmarin@boulettegolden.com
                                           Liaison Counsel

                                Oral Argument Requested
RANDALL J. BARON                SAMUEL H. RUDMAN
DAVID T. WISSBROECKER           MARK S. REICH
STEVEN M. JODLOWSKI             MICHAEL G. CAPECI
ROBBINS GELLER RUDMAN           ROBBINS GELLER RUDMAN
 & DOWD LLP                      & DOWD LLP
655 West Broadway, Suite 1900   58 South Service Road, Suite 200
San Diego, CA 92101             Melville, NY 11747
Telephone: 619/231-1058         Telephone: 631/367-7100
619/231-7423 (fax)              631/367-1173 (fax)
                                Class Counsel for Appellees
KENDALL LAW GROUP, LLP          THE BRISCOE LAW FIRM, PLLC
JOE KENDALL                     WILLIE C. BRISCOE
DANIEL HILL                     8150 N. Central Expressway, Suite 1575
JAMIE J. McKEY                  Dallas, TX 75206
3232 McKinney Avenue, Suite     Telephone: 214/239-4568
700                             281/254-7789 (fax)
Dallas, TX 75204
Telephone: 214/744-3000
214/744-3015 (fax)

DUNNAM & DUNNAM LLP             BRODSKY & SMITH, LLC
HAMILTON LINDLEY                EVAN J. SMITH
4125 West Waco Drive (76710)    MARC ACKERMAN
P.O. Box 8418                   Two Bala Plaza, Suite 602
Waco, TX 76714-8418             Bala Cynwyd, PA 19004
Telephone: 254/753-6437         Telephone: 610/667-6200
254/753-7434 (fax)              610/667-9029 (fax)

LEVI & KORSINSKY, LLP           KOHN, SWIFT & GRAF, P.C.
SHANE T. ROWLEY                 DENIS F. SHEILS
30 Broad Street, 24th Floor     One South Broad Street, Suite 2100
New York, NY 10004              Philadelphia, PA 19107-3389
Telephone: 212/363-7500         Telephone: 215/238-1700
866/367-6510 (fax)              215/238-1968 (fax)

THE WEISER LAW FIRM, P.C.       RYAN & MANISKAS, LLP
PATRICIA C. WEISER              KATHARINE M. RYAN
JAMES M. FICARO                 RICHARD A. MANISKAS
22 Cassatt Avenue               995 Old Eagle School Road, Suite 311
Berwyn, PA 19312                Wayne, PA 19087
Telephone: 610/225-2677         Telephone: 484/588-5516
610/408-8062 (fax)              484/450-2582 (fax)
KELLY N. REDDELL
THE REDDELL FIRM PLLC
100 Highland Park Village, Suite 200
Dallas, Texas 75205
Telephone: 214/295-3031
Additional Counsel for Appellees
                                  TABLE OF CONTENTS

                                                                                                           Page
INDEX OF AUTHORITIES .......................................................................... v

RECORD REFERENCES ........................................................................... xiii 

COUNTER-STATEMENT OF THE CASE ............................................... xiv 

STATEMENT REGARDING ORAL ARGUMENT ................................. xvi 

COUNTER-STATEMENT OF THE ISSUES ........................................... xvii 

COUNTER-STATEMENT OF THE FACTS ................................................ 1 

        I.      Background of the Acquisition .................................................. 1 

        II.     Management and Jefferies Urge the Board to Sell the
                Company .................................................................................... 1 

        III.    The Management-Driven Sales Process .................................... 2 

        IV.     After Reporting Record Production, the Board Agrees
                to a Tender Offer ........................................................................ 5 

        V.      The Acquisition .......................................................................... 7 

        VI.     Self-Dealing ............................................................................... 7 

STATEMENT OF PROCEDURAL HISTORY ............................................ 9 

        I.      Plaintiffs Seek Injunctive Relief on an Expedited
                Basis ........................................................................................... 9 

        II.     The Cash-Out Merger Is Consummated and Plaintiffs
                Amend Their Petition to Seek Damages .................................. 10 

        III.    The First Round of Class Certification Proceedings ............... 11 

                                                    -i-
                  A.       Plaintiffs Move for Class Certification .......................... 11 

                  B.       The Evidentiary Hearing on Plaintiffs’ Motion ............. 12 

                  C.       After Conducting Further Proceedings, the Trial
                           Court Grants Plaintiffs’ Motion ..................................... 14 

                  D.       The First Appeal ............................................................ 14 

         IV.      The Second Round of Class Certification Proceedings ........... 15 

                  A.       Plaintiffs Submit an Amended Trial Plan and
                           Again Move for Class Certification............................... 15 

                  B.       The Trial Court Grants Plaintiffs’ Renewed
                           Motion ............................................................................ 16 

SUMMARY OF THE ARGUMENT ........................................................... 18 

ARGUMENT ................................................................................................ 23 

         I.       This Court Reviews a Grant of Class Certification for
                  Abuse of Discretion.................................................................. 23 

         II.      The Class Definition Is Appropriate ........................................ 23 

         III.     The Trial Plan Adopted by the Trial Court Complies
                  with Brigham I and Bernal....................................................... 30 

                  A.       The Trial Plan Properly Analyzes Plaintiffs’
                           Claims ............................................................................ 31 

                           1.       The Trial Plan Properly Analyzes How
                                    Damages Will Be Proven .................................... 31 

                           2.       Plaintiffs Offer One Damages Theory ................ 33 

                                                    - ii -
      3.      The Trial Plan Properly Explains
              Plaintiffs’ Breach of Fiduciary Duty
              Claims .................................................................. 34 

      4.      The Trial Court Properly Understood and
              Explained the Role of Plaintiffs’ Claims
              Based Upon Defendants’ Non-
              Disclosures .......................................................... 37 

      5.      The Trial Plan Properly Analyzes
              Plaintiffs’ Aiding-and-Abetting Claims
              Against Statoil ..................................................... 39 

B.    The Trial Plan Properly Analyzes Defendants’
      Pleaded Defenses ........................................................... 42 

      1.      The Court Fully Understood and Gave
              Due Consideration to the Effect of
              Defendants’ Alleged Defenses of
              Acquiescence, Ratification, Estoppel,
              and Waiver........................................................... 43 

              a.       Delaware Has Repeatedly Found
                       These Defenses Inapplicable to
                       Plaintiffs’ Claims ...................................... 43 

              b.       Even if They Applied, Defendants’
                       Pleaded Defenses Do Not Preclude
                       Class Certification ..................................... 46 

              c.       Defendants Cannot Overcome the
                       Reality that These Types of Cases
                       Are Routinely Certified and Tried
                       on a Class-Wide Basis............................... 50 

      2.      The Court Properly Analyzed
              Defendants’ “Proportionate
              Responsibility” Defense ...................................... 51 
                       - iii -
IV.    Plaintiffs Satisfied the Requirements for Class
       Certification.............................................................................. 54 

       A.       The Trial Court Acted Within Its Discretion in
                Finding that Plaintiffs’ Claims Are Typical .................. 55 

       B.       The Trial Court Acted Within Its Discretion in
                Finding that Common Issues Predominate .................... 58 

       C.       The Trial Court’s Numerosity Finding Was
                Sufficiently Supported ................................................... 58 

       D.       The Trial Court Acted Within Its Discretion in
                Finding that Plaintiffs Will Fairly and
                Adequately Protect the Interests of the Class ................ 61 

                1.       Adequacy Findings Are Entitled to
                         Substantial Deference .......................................... 63 

                2.       Statoil Concedes that Adequacy Is Met
                         by Not Challenging the Vast Majority of
                         the Factors Relevant to the Adequacy
                         Determination ...................................................... 64 

                3.       The Trial Court’s Findings Regarding
                         Plaintiffs’ Familiarity with the Litigation
                         Are Amply Supported by the Record .................. 66 

                         a.        Howard Weissberg .................................... 68 

                         b.        Walter Schwimmer.................................... 72 

                         c.        Jeffery Whalen .......................................... 77 

                         d.        Robert Fioravanti ...................................... 79 

                         e.        Raymond Boytim ...................................... 82 

                                         - iv -
                                   f.       Myrna Goodman ....................................... 84 

                                   g.       Hugh Duncan ............................................ 85 

CONCLUSION ............................................................................................. 88 

CERTIFICATE OF COMPLIANCE ............................................................ 91 

CERTIFICATE OF SERVICE ..................................................................... 91 

APPENDIX

                                                  -v-
                               TABLE OF AUTHORITIES

                                                                                                           Page

CASES
Adams v. Reagan,
  791 S.W.2d 284 (Tex. App.–Fort Worth 1990, no writ) .............................. 65, 76

Andra v. Blount,
  772 A.2d 183 (Del. Ch. 2000) ............................................................................ 57

Bershad v. Curtiss-Wright Corp.,
   535 A.2d 840 (Del. 1987) ................................................................. 27, 28, 29, 49

BMG Direct Marketing, Inc. v. Peake,
  178 S.W.3d 763 (Tex. 2005) .............................................................................. 43

Brevan Howard Credit Catalyst Master Fund Ltd. v.
   Spanish Broad. Sys. Inc.,
   No. 9209-VCG, 2015 Del. Ch. LEXIS 141
   (Del. Ch. May 19, 2015) ..................................................................................... 48

Brigham Exploration Co. v. Boytim,
   No. 03-13-00191-CV, 2014 Tex. App. LEXIS 9068
   (Tex. App.-Austin Aug. 15, 2014, no pet.).................................................. passim

Bundesen v. Beck,
  No. 11,347, 1992 Del. Ch. LEXIS 42
  (Del. Ch. Feb. 12, 1992) ..................................................................................... 48

Canyon Lake Island Prop. Owners Ass’n v. Sterling/Suggs L.P.,
  No. 03-14-00208-CV, 2015 Tex. App. LEXIS 5739
  (Tex. App.–Austin June 5, 2015, no pet. h.) ...................................................... 65

Chen v. Howard-Anderson,
  87 A.3d 648 (Del. Ch. 2014) .............................................................................. 37

Chevron U.S.A., Inc. v. Kennedy,
  808 S.W.2d 159 (Tex. App.-El Paso 1991, writ dism’d w.o.j.) ......................... 60

                                                 - vi -
Cinerama, Inc. v. Technicolor, Inc.,
   663 A.2d 1156 (Del. 1995) ................................................................................. 36

Clements v. Rogers,
   790 A.2d 1222 (Del. Ch. 2001) .......................................................................... 57

Cooper v. Ross & Roberts, Inc.,
  505 A.2d 1305 (Del. Ch. 1986) .......................................................................... 52

Corwin v. KKR Fin. Holding, LLC,
  No. 629, 2015 Del. LEXIS 473
  (Del. Oct. 2, 2015) .............................................................................................. 47

Crescent/Mach I Partners, L.P. v. Turner,
   No. 17455, 2000 Del. Ch. LEXIS 145
   (Del. Ch. Sept. 29, 2000) .................................................................................... 38

DaimlerChrysler Corp. v. Inman,
  252 S.W.3d 299 (Tex. 2008) ........................................................................ 35, 41

Dale v. Town of Elsmere,
  No. 99M-01-15-VAB, 2001 Del. Super. LEXIS 161
  (Del. Super. Ct. Apr. 27, 2001) .......................................................................... 26

Dieter v. Prime Computer, Inc.,
   681 A.2d 1068 (Del. Ch. 1996) .................................................................... 24, 31

Farmers Ins. Exch. v. Leonard,
  125 S.W.3d 55 (Tex. App.–Austin 2003, no pet.) ....................................... passim

Forsyth v. Lake LBJ Inv. Corp.,
  903 S.W.2d 146 (Tex. App.–Austin 1995, writ dism’d w.o.j.) ................... passim

Frank v. Wilson & Co.,
   32 A.2d 277 (Del. 1943) ..................................................................................... 47

Gantler v. Stephens,
  965 A.2d 695 (Del. 2009) ............................................................................. 44, 47

                                                  - vii -
Garcia v. Walker,
  No. 04-05-00343-CV, 2006 Tex. App. LEXIS 1409
  (Tex. App.–San Antonio Feb. 22, 2006, no pet.) ......................................... 63, 72

Gesoff v. IIC Indus.,
  902 A.2d 1130 (Del. Ch. 2006) .......................................................................... 27

Harris Constr. Co. v. GGP-Bridgeland, LP,
  No. H-07-3468, 2009 U.S. Dist. LEXIS 69476
  (S.D. Tex. Aug. 10, 2009) .................................................................................. 52

Henry Schein Inc. v. Stromboe,
  102 S.W.3d 675 (Tex. 2002) .............................................................................. 64

Hi-Lo Auto Supply L.P. v. Beresky,
   986 S.W.2d 382 (Tex. App.–Beaumont 1999, writ mand. denied) .................... 66

In re Beatrice Cos., Inc. Litig.,
    No. 155, 1987 Del. LEXIS 1036
    (Del. Ch. Feb. 20, 1987) ..................................................................................... 24

In re Celera Corp. S’holder Litig.,
    59 A.3d 418 (Del. 2012) .............................................................................. passim

In re Celera Corp. S’holder Litig.,
    No. 6304-CVP, 2012 Del. Ch. LEXIS 66
    (Del. Ch. Mar. 23, 2012) ............................................................................. passim

In re Countrywide Corp. S’holders Litig.,
    No. 3464-VCN, 2009 Del. Ch. LEXIS 44
    (Del. Ch. March 31, 2009) .................................................................................. 26

In re Dole Food Co., Inc. S’holder Litig.,
    No. 8703-VCL, 2015 Del. Ch. LEXIS 223
    (Del. Ch. Aug. 27, 2015) ............................................................................. passim

In re Gaylord Container Corp. S’holders Litig.,
    747 A.2d 71 (Del. Ch. 1999) .............................................................................. 54

                                                 - viii -
In re JCC Holding Co. S’holder Litig.,
    843 A.2d 713 (Del. Ch. 2003) ............................................................................ 19

In re Kosmos Energy Ltd. Sec. Litig.,
    299 F.R.D. 133 (N.D. Tex. 2014) ....................................................................... 68

In re PNB Hldg. Co. S’holders Litig.,
    No. 28-N, 2006 Del. Ch. LEXIS 158
    (Del. Ch. Aug. 18, 2006) .................................................................................... 32

In re Prodigy Commc’ns Corp. S’holders Litig.,
    No. 19113, 2002 Del. Ch. LEXIS 95
    (Del. Ch. July 26, 2002) ............................................................................... 24, 27

In re Rural Metro Corp. S’holders Litig.,
    88 A.3d 54 (Del. Ch. 2014) ......................................................................... passim

In re Rural/Metro Corp. Stockholders Litig.,
    102 A.3d 205 (Del. 2014) ................................................................................... 38

In re Transkaryotic Therapies, Inc.,
    954 A.2d 346 (Del. 2008) ................................................................................... 27

In re Triarc Cos., Inc. Class & Deriv. Litig.,
    791 A.2d 872 (Del. Ch. 2001) ...................................................................... 24, 25

In re Tyson Foods, Inc. Consol. S’holder Litig.,
    919 A.2d 563 (Del. Ch. 2007) ............................................................................ 38

Intratex Gas Co. v. Beeson,
   22 S.W.3d 398 (Tex. 2000) ................................................................................ 23

Joseph v. Shell Oil Co.,
   No. 7450, 1985 Del. Ch. LEXIS 458
   (Del. Ch. Feb. 8, 1985) ....................................................................................... 33

King v. City of Austin,
   No. 03-03-00173-CV, 2004 Tex. App. LEXIS 2623
   (Tex. App.–Austin Mar. 25, 2004, no pet.) .................................................. 67, 86

                                                  - ix -
Klaassen v. Allegro Dev. Corp.,
   106 A.3d 1035 (Del. 2014) ................................................................................. 47

Louisiana-Pacific Corp. v. Andrade,
  19 S.W.3d 245 (Tex. 1999) ................................................................................ 49

Malone v. Brincat,
  722 A.2d 5 (Del. 1998) ....................................................................................... 38

Methodist Hosps. of Dallas v. Tall,
  972 S.W.2d 894 (Tex. App.–Corpus Christi 1998, no pet.) ............................... 59

Mills Acquisition Co. v. MacMillan, Inc.,
   559 A.2d 1261 (Del. 1989) ........................................................................... 36, 37

Nevins v. Bryan,
  885 A.2d 233 (Del. Ch. 2005) ............................................................................ 49

Norberg v. Security Storage Co. of Wash.,
  No. 12885, 2000 Del. Ch. LEXIS 142
  (Del. Ch. Sept. 19, 2000) ........................................................................ 28, 29, 49

Omnicare, Inc. v. NCS Healthcare, Inc.,
  809 A.2d 1163 (Del. Ch. 2002) .......................................................................... 26

Pate v. Elloway,
   No. 01-03-00187-CV, 2003 Tex. App. LEXIS 9681
   (Tex. App.–Houston [1st Dist.] Nov. 13, 20013, pet. denied) ......... 27, 66, 67, 75

Pate v. Havens,
   No. 04-0006, 2004 Tex. LEXIS 1160
   (Tex. Nov. 5, 2004)....................................................................................... 20, 51

Pate v. Havens,
   No. 04-0006, 2005 Tex. LEXIS 305
   (Tex. Apr. 8, 2005) ........................................................................... 20, 27, 50, 51

Rabkin v. Philip A. Hunt Chem. Corp.,
  498 A.2d 1099 (Del. 1985) ................................................................................. 58

                                                  -x-
Rainbow Group, Ltd. v. Johnson,
   990 S.W.2d 351 (Tex. App.–Austin 1999, pet dism’d w.o.j.) ........................... 60

Ret. Sys. v. Boeing Co.,
   711 F.3d 754 (7th Cir. 2013) .............................................................................. 87

Schultz v. Ginsburg,
   965 A.2d 661 (Del. 2009) ................................................................................... 25

Shapiro v. Pabst Brewing Co.,
   No. 7339, 1985 Del. Ch. LEXIS 496
   (Del. Ch. July 30, 1985) ............................................................................... 57, 58

Snyder Commc’ns v. Magana,
   94 S.W.3d 213 (Tex. App.–Corpus Christi 2002, pet. filed) ............................. 59

Southwestern Ref. Co. v. Bernal,
   22 S.W.3d 425 (Tex. 2000) ......................................................................... passim

Steinhardt v. Howard-Anderson,
   No. 5878-VCL, 2012 Del. Ch. LEXIS 1
   (Del. Ch. Jan. 6, 2012) .................................................................................. 28, 29
Stew. v. Wilmington Tr. SP Servs.,
   112 A.3d 271 (Del. Ch. 2015) ............................................................................ 71

Texas Workers’ Comp. Ins. Facility v. Personnel Servs.,
   895 S.W.2d 889 (Tex. App.–Austin, 1995, no writ) .......................................... 49

Turner v. Bernstein,
   768 A.2d 24 (Del. Ch. 2000) .............................................................................. 56

Weatherly v. Deloitte & Touche,
  905 S.W.2d 642 (Tex. App.–Houston [14th Dist.] 1995,
  writ dism’d w.o.j.) .............................................................................................. 76

Women’s Clinic of S. Tex. v. Alonzo,
  No. 13-12-00537, 2013 Tex. App. LEXIS 7263
  (Tex. App.–Corpus Christi June 13, 2013, pet. denied) ..................................... 59

                                                   - xi -
Yucaipa Am. Alliance Fund II, L.P. v. Riggio,
   1 A.3d 310 (Del. Ch. 2010) ................................................................................ 53

STATUTES, RULES AND REGULATIONS
Tex. Civ. Prac. & Rem. Code Ann.
  §33.002(a)(1) ................................................................................................ 51, 52
  §33.003 ............................................................................................................... 53
  §33.003(b) ........................................................................................................... 53

Tex. R. App. P.
  Rule 25.1 ............................................................................................................. 14
  Rule 38.1(e) ........................................................................................................ 55

Texas Rules of Civil Procedure
  Rule 42 ......................................................................................................... passim
  Rule 42(a) ........................................................................................................... 55
  Rule 42(b) ........................................................................................................... 55
  Rule 42(c) ........................................................................................................... 31

Texas Business Corporation Act
  Article 8.02 ......................................................................................................... 52

8 Del. C.
   §102(b)(7) ......................................................................................... 34, 35, 36, 37
   §253 .................................................................................................................... 44
   §327 .................................................................................................................... 26

                                                      - xii -
                  RECORD REFERENCES

Brigham AB ___     Brief of Brigham Appellants (September 28,
                   2015)

Statoil AB ___     Brief of Appellants Statoil ASA and Fargo
                   Acquisition, Inc. (September 28, 2015)

CR ___             Clerk’s Record Volume 1 of 1 (June 4, 2015)

1SCR ___           Supplemental Clerk’s Record Volume 1 of 1
                   (June 5, 2015)

2SCR ___           Supplemental Clerk’s Record Volume 1 of 1
                   (June 12, 2015)

3SCR___            Supplemental Clerk’s Volume III (August 12,
                   2015)

SCR Ex. 1___       Exhibit 1 to Supplemental Clerk’s Record
                   (August 14, 2015)

RR (Vol. 1)___     Reporter’s Record Volume 1 of 4 (July 9, 2015)

RR (Vol. 2) ___    Reporter’s Record Volume 2 of 4 (July 9, 2015)

RR (Vol. 3) ___    Reporter’s Record Volume 3 of 4 (July 9, 2015)

RR (Vol. 4) ___    Reporter’s Record Volume 4 of 4 (July 9, 2015)

                           - xiii -
                COUNTER-STATEMENT OF THE CASE

      Consistent with Tex. R. App. P. 38.1(d), Plaintiffs-Appellees offer this

simple statement of the case.

      This case concerns the sale of Brigham Exploration Company

(“Brigham” or the “Company”), a Delaware corporation headquartered in

Texas, to Statoil ASA (“Statoil”), a Norwegian multinational oil and gas

company, via a cash tender offer of $36.50 per share.            Plaintiffs, who

collectively owned 37,025 shares of Brigham when the deal was announced

(and over 20,000 shares when the deal closed), allege that the now-former

members of Brigham’s Board of Directors breached their fiduciary duties under

Delaware law in agreeing to and effecting the cash-out merger. Plaintiffs also

allege that Brigham and Statoil aided and abetted the Board’s breach of

fiduciary duties in connection with the buyout. CR 5. Plaintiffs seek damages

for the class as a result of defendants’ breaches of fiduciary duty. CR 8.

      This is the second interlocutory appeal stemming from three-year long

class certification proceedings before the trial and appellate courts. The instant

appeal pertains to the trial court’s April 9, 2015 order, in which it certified

plaintiffs’ claims for class treatment under Tex. R. Civ. P. 42. CR 3163-67.

The trial court entered an order certifying a class of “all holders of common

                                     - xiv -
stock of Brigham Exploration Company as of October 17, 2011” and adopted

an amended trial plan, dated March 19, 2015. Id.; Brigham AB, Appendix B.

                                 - xv -
           STATEMENT REGARDING ORAL ARGUMENT

      Plaintiffs-Appellees welcome oral argument to assist the Court in

resolving the issues presented.

                                  - xvi -
               COUNTER-STATEMENT OF THE ISSUES

      Did the trial court, with the benefit of thousands of pages of evidentiary

submissions and numerous rounds of briefing from the parties, two hearings to

specifically address Appellants’ pleaded defenses, and numerous successful

class-wide trials in cases involving the same claims and defenses asserted here,

conduct a rigorous analysis of Appellants’ pleaded defenses for purposes of

class certification?

                                    - xvii -
               COUNTER-STATEMENT OF THE FACTS

I.    Background of the Acquisition
      Brigham engages in the exploration, development and production of oil

and natural gas in the United States. CR 9.

      In the decade leading up to the sale, the Company had invested heavily in

its exploration activities, particularly in the Williston Basin, a region that has

the largest onshore oil accumulations in the United States. CR 9, 16. As a

result of that investment, the Company had steadily seen its revenues grow. In

2004, the Company reported revenue of $71.7 million.              By 2007, the

Company’s revenue had nearly doubled – to $124.7 million. Id.

      In 2008, the Company essentially struck gold, discovering several

significant oil reserves in the Vicksburg and Williston Basin. CR 16-17.

Within the next year, the Company announced several more discoveries,

including a deep Frio field discovery and three high rate discoveries in the

Bakken. Id.

II.   Management and Jefferies Urge the Board to Sell the
      Company

      As Brigham’s production was soaring, shareholders were positioned to

reap the long-term benefits of the Company’s oil discoveries.             CR 17.

Management, however, had a different idea. Id. In late 2010, Ben Brigham, the

                                      -1-
Company’s President and CEO, and his management team began formulating a

plan to sell the Company so that they could cash out tens of millions of dollars of

options and other equity holdings, at the expense of shareholders. Id.

       Unbeknownst to the Board, management quietly began working with the

Board’s long-time financial advisor, Jefferies & Company, Inc. (“Jefferies”), in

an effort to convince the Board that they should sell the Company rather than

continuing to execute on the current business plan. CR 17. On December 10,

2010, Jefferies appeared at a Board meeting to pitch a potential sale of the

Company. CR 17-18. Sensing an opportunity for a big payday, Jefferies

predictably called the conditions for a sale “favorable” and predicted that buyer

interest would be “strong.” Conveniently, Jefferies had already identified two

lists of companies for the Board to potentially approach. At the conclusion of

the meeting, the Board authorized Jefferies to contact only 10 of the suggested

16 companies on the lists. The Board also retained Jefferies, without inquiring

into whether Jefferies had any conflicts of interest (it did) that would make its

advice less reliable. Id.

III.   The Management-Driven Sales Process
       Even though the Board was considering a potential sale, the Board

decided to allow a conflicted management team and conflicted bankers, rather

than an independent special committee, to meet and negotiate with potential
                                       -2-
buyers, including Statoil. CR 18-19. Over the next two months, Jefferies

began contacting potential buyers. Id.

      These efforts, however, were not as fruitful as management and Jefferies

had predicted. CR 21. At a Board meeting on March 11, 2011, Jefferies

informed the Board that for various reasons each of the limited number of

companies contacted had declined to move forward. CR 20. However, rather

than end the process and continue to execute on its standalone business plan,

the Board decided to single-track discussions with Statoil even though Statoil

had yet to even indicate a price at which it was willing to make an offer and had

already told Brigham that it was not willing to provide an offer that included a

premium to Brigham’s stock price. CR 21-22. By April 2011, the Company’s

talks with Statoil had slowed to a crawl, which frustrated Brigham’s upper

management. CR 21-23.

      Meanwhile, the Company continued to report spectacular financial

results. CR 20-21. On February 24, 2011, the Company reported record

production volumes, revenues and operating income for the fourth quarter of

2010. Id.

      This news led to a slew of upward revisions by analysts between

February 2011 and June 2011. CR 20. Among the analysts who believed the

Company’s share price would reach $45.00 in the near term was the Board’s
                                  -3-
own advisor, Jefferies, which, on June 1, 2011, issued a report in which it set

the price target on the Company at $45.00. CR 6, 21. Notably, three months

later, Jefferies offered an opinion to Brigham shareholders in which it stated

that the $36.50 per share in consideration offered by Statoil was “fair,” despite

being $8.50 less than the price target Jefferies’ analysts had set for the

Company just months earlier. Id.

      Internally, Company management continued to refine valuation models

under various rig programs, as directed by the Board, to account for the

Company’s newfound discoveries and substantially improved outlook. CR 22-

23. On March 23, 2011, the Board held a meeting at which Eugene Shepherd,

Brigham’s then-Chief Financial Officer, provided a presentation to the Board

concerning the net asset value and profitability of the Company under 12-, 16-,

20-, and 24-rig programs. Id.

      The Board had also asked Jefferies to develop valuation models based on

these rig programs. Jefferies had developed a valuation model under a more

conservative program, which assumed that the Company would increase to 16

operated rigs by the end of 2012 and then stay constant, and an accelerated

model, which assumed that the Company would increase to 30 operated rigs by

the end of 2013. CR 22-23. Ben Brigham and his management team, as well

as Jefferies, believed the 30-rig initiative was achievable. CR 29. Under
                                     -4-
Jefferies’ analysis, the accelerated, or 30-rig model, implied a net asset value

per share of between $79.82 and $149.94, depending on the price of oil.

CR 23. Defendants did not disclose Jefferies’ 30-rig analysis to shareholders.

Id. Nor did defendants disclose or provide any information whatsoever

concerning several other accelerated drilling programs developed by the

Company. CR 22.

IV.   After Again Reporting Record Production, the Board
      Agrees to a Tender Offer
      On August 8, 2011, the Company reported that its average daily

production volumes for the second quarter of 2011 were a quarterly record of

12,206 barrels of crude oil equivalent per day, up 57% from the second quarter

of 2010. CR 24. Despite record financial results, the Board continued to allow

management to push for a sale. Id. In early September 2011, management re-

approached Statoil, which had gone silent several months earlier. CR 23-24.

      The Board did not direct Jefferies to contact other potential buyers, or to

return to the ten potential buyers contacted in January, even though Brigham’s

recent successes and newfound oil reserves had made it a more attractive sales

target. CR 24-25. Indeed, on September 28, 2011, Chevron Corp., which had

been contacted in January but initially said it was not interested, contacted

Jefferies to express interest in pursuing a deal with Brigham. Chevron

                                     -5-
requested access to the data room so that it could perform due diligence and

possibly put together a bid. CR 25. Out of fear that it would upset Statoil, the

Board instructed Jefferies not to give Chevron access to the data room. Id.

      Then, in early October, after an eight-month period when virtually no

material terms were discussed by Brigham and Statoil, including price, the terms

of a $4 billion buyout with Statoil were negotiated in mere days. CR 25-27. To

get that deal, however, Ben Brigham deceived his fellow Board members.

CR 380-81. In the days leading up to the execution of the Merger Agreement,

Ben Brigham’s eagerness to sell the Company led him to secretly make a

“handshake deal” with Statoil without seeking Board approval for the price of

$36.50. Id. Realizing what he had done, Ben Brigham tried to backtrack on his

“handshake,” but then agreed to secure Board approval for the price rather than

unwind the deal and maybe lose the offer from Statoil. Id. Notably, the walking

orders Ben Brigham had been given at the time by the Board were to hold firm at

$40. Id.

      None of this was disclosed to the Board. CR 381. On the morning of

October 17, 2011, the Company and Statoil executed the Merger Agreement,

and the Company and Statoil issued a press release announcing the tender offer.

CR 27-28.    By structuring the transaction as a tender offer, the Board

essentially eliminated its ability to shop the Company. CR 37.
                                       -6-
V.    The Acquisition
      On October 28, 2011, Statoil launched the tender offer, which was set to

expire one month later. CR 28. That same day, Ben Brigham sent a letter to

shareholders, informing them that Statoil had commenced a tender offer and

urging them to tender their shares. Id. However, during the initial tender offer

period, Statoil failed to get enough tendered shares to close the deal and

complete the acquisition. CR 28. Statoil therefore commenced a subsequent

offering period beginning on December 1, 2011 and expiring on December 7,

2011. Id. During the subsequent offering period, Statoil exercised its option,

under the Merger Agreement, to purchase newly-issued shares from the

Company so that Statoil would own enough shares to satisfy the short-form

threshold. Id.

      Statoil closed the transaction on December 8, 2011. CR 29.

VI.   Self-Dealing
      When the deal closed, Brigham’s management team made off with nearly

$100 million in merger related compensation. CR 34-36. In fact, one month

before the acquisition was announced, and while the Company was seeking a

buyer, defendant directors and certain Company executives granted themselves

what were essentially spring-loaded options by amending their existing equity

incentive package to provide for accelerated vesting of their outstanding

                                     -7-
options and restricted shares so that they could cash out in a merger with

Statoil. Id. Defendants also provided rich golden parachutes to the rest of the

management team to assure everyone at the Company was incentivized to push

for a deal with Statoil. Id.

                                     -8-
              STATEMENT OF PROCEDURAL HISTORY

      Although this action arrives at this Court before a final resolution in the

trial court, it has already generated a substantial record. The class certification

order subject to the instant appeal is the result of an extensive, multi-year class

certification process before the trial court and this Court of Appeal. A

summary of those proceedings is set forth below.

I.    Plaintiffs Seek Injunctive Relief on an Expedited Basis
      On October 17, 2011, one day after signing the merger agreement,

Brigham and Statoil jointly announced that they had entered into a merger

agreement, pursuant to which Statoil would acquire Brigham.                CR 27.

Following the announcement, five shareholder class actions were filed against

Brigham, its Board and Statoil. CR 291-97. These lawsuits sought to enjoin

the acquisition. CR 221.

      Statoil launched the tender offer on October 28, 2011 and announced that

the tender offer would expire one month later, on November 30, 2011. CR 28.

Plaintiffs took limited, expedited discovery, and promptly moved for temporary

injunctive relief, seeking to delay the close of Statoil’s tender offer until

defendants disclosed one piece of information: a 30-rig valuation analysis

prepared by Brigham’s financial advisor, Jefferies, and presented to the

Brigham Board prior to the execution of the merger agreement. CR 29, 305.
                                       -9-
Plaintiffs were unsuccessful in attempting to enjoin the tender offer based upon

this single non-disclosure, and on December 8, 2011, the deal closed. CR 29,

305.

II.    The Cash-Out Merger Is Consummated and Plaintiffs
       Amend Their Petition to Seek Damages
       Once the merger was consummated, plaintiffs consolidated the various

actions and amended their petition to seek damages. CR 4-48. In March 2012,

plaintiffs filed a consolidated amended petition for breach of fiduciary duty. Id.

Plaintiffs allege that the officers and directors of Brigham had breached their

fiduciary duties of loyalty, good faith and fair dealing, independence, and due

care in connection with the consummation of the merger by, among other

things:

       (i)     engaging in self-dealing by obtaining tens of millions of dollars in
               personal benefits for themselves;

       (ii)    making no effort to ensure that the interests of the public
               shareholders were adequately protected during the sales process
               (by, for example, establishing a special committee of independent
               directors to oversee the process); and

       (iii)   selling the Company at a significantly undervalued price.

CR 44-45.

       Plaintiffs’ consolidated petition also alleges that the directors failed to

disclose certain material information to Brigham shareholders concerning the

                                       - 10 -
sales process leading to the merger, the Company’s relationship with its

financial advisors, who were concurrently retained, as well as the impact that

those relationships had on the process, and the data and input underlying the

fairness opinion of the financial advisors as well as the methodologies

employed. CR 41-44. The petition also alleges that Brigham and Statoil aided

and abetted the breaches. CR 5.

III.   The First Round of Class Certification Proceedings

       A.    Plaintiffs Move for Class Certification
       Plaintiffs first moved for class certification in 2012. CR 678-983. In the

motion, plaintiffs sought to certify a class of “[a]ll holders of Brigham common

stock as of October 17, 2011” – the date the transaction was announced.

CR 683.

       As support for their motion, plaintiffs submitted, inter alia, deposition

testimony from the former officers and executives of Brigham. CR 708-09,

758-64. Plaintiffs also submitted sworn affidavits from each of the seven

proposed class representatives.     CR 656-76.      In the affidavits, the class

representatives confirmed, under oath, that they: (i) owned Brigham stock at the

time the merger was announced; (ii) believed that the price accepted by the

Brigham Board and offered by Statoil undervalued their holdings;

(iii) understood that the role of a class representative was to act as a fiduciary

                                      - 11 -
for the class; (iv) were familiar with the litigation through the review of

pleadings and other legal papers; (v) had kept abreast of the progress of the

litigation through discussions with their counsel; and (vi) were willing to attend

trial. Id. Plaintiffs also submitted resumes from the law firms seeking to be

appointed as class counsel. CR 850-944.

      Defendants opposed plaintiffs’ motion for class certification, arguing that

plaintiffs and their counsel were inadequate, that individual issues

predominated, that the claims of plaintiffs were atypical, and that plaintiffs’

proposed trial plan was deficient. CR 1862.

      Prior to filing its opposition, defendants deposed all of the named

plaintiffs. 3SCR 96-451. Collectively, the plaintiffs testified for nearly 30

hours. Id. The transcripts of these depositions cover 1,078 pages. Id.

      B.     The Evidentiary Hearing on Plaintiffs’ Motion
      On October 22, 2012, the trial court held an all-day hearing on plaintiffs’

motion for class certification. The hearing began with counsel for the parties

providing opening statements in support of their position on plaintiffs’ motion.

CR 1589, 1617-27.

      Then, for nearly the rest of the day, four of the seven class

representatives, all of whom had traveled from various locations across the

United States to attend the hearing, provided live testimony about a variety of
                                      - 12 -
topics relating to their adequacy as class representatives, including their

motivation for bringing the lawsuit; familiarity with the claims asserted in the

action; their role in overseeing and working with their counsel; familiarity with

the factual record in this case; and ability and willingness to fulfill their role as

class representative should the court certify the class. CR 1627-1785. Counsel

for defendants spent hours cross-examining the proposed class representatives.

CR 1647-80, 1698-1713, 1731-51, 1765-84.

       After Messrs. Weissberg, Schwimmer, Whalen and Fioravanti completed

their testimony, counsel for the parties gave lengthy closing arguments in

support of their respective positions.           CR 1591, 1794-1858.          Those

presentations addressed the numerous legal and factual arguments made in

support of, and in response to, plaintiffs’ motion for class certification. Id. In

particular, the parties addressed defendants’ challenges to plaintiffs’ showing

on the adequacy and typicality requirements. CR 1796-1845. In all, 11

exhibits were admitted into the record during the hearing. CR 1591.

       At the end of the hearing, the trial court took plaintiffs’ motion for class

certification under submission pending the submission of a reply brief from

plaintiffs’ counsel, along with a number of additional evidentiary items from

the parties. CR 1788-93. Among the evidentiary submissions was a compact

disc, compiled by defendants, containing one-hour worth of videotaped
                                - 13 -
excerpts from the depositions of the proposed class representatives which

defendants believed supported their position that the named plaintiffs were

inadequate. Id. At the trial court’s request, the parties also lodged complete

copies of the deposition transcripts of the named plaintiffs for the court’s

review. Id.

      C.      After Conducting Further Proceedings, the Trial
              Court Grants Plaintiffs’ Motion
      One-and-a-half months later, on December 18, 2012, the trial court

indicated in a letter to the parties that it had “considered the pleadings, the

evidence and the arguments of counsel,” and that it was granting plaintiffs’

motion for class certification.     CR 1077.    After defendants objected to

plaintiffs’ proposed class certification order, on February 22, 2013, the trial

court held a second hearing on plaintiffs’ motion. CR 1079-85; RR 4-14.

      One week later, on February 27, 2013, the trial court signed an order

granting class certification. CR 1195. Defendants then filed a notice of

interlocutory appeal to the class certification order under Tex. R. App. P. 25.1.

      D.      The First Appeal
      In their first appeal, defendants launched a broad attack on the trial

court’s class certification order. They argued that the case did not meet the

requirements for class certification under Rule 42, that the named plaintiffs

                                     - 14 -
cannot adequately protect the interests of absent class members, that plaintiffs’

counsel was inadequate, that the named plaintiffs do not satisfy the typicality

requirement, and that individualized issues predominated. In addition, they

argued that the trial plan adopted by the trial court was deficient on a number of

grounds.

       After a hearing, this Court reversed on narrow grounds. It explained that

the trial plan must “state the elements of [Appellants’ pleaded] defenses” and

conduct a rigorous analysis of those defenses. To that end, it directed the trial

court to conduct further proceedings regarding plaintiffs’ proposed trial plan.

Brigham Exploration Co. v. Boytim, No. 03-13-00191-CV, 2014 Tex. App.

LEXIS 9068, at *9-*10 (Tex. App.-Austin Aug. 15, 2014, no pet.) (“Brigham

I”).

IV.    The Second Round of Class Certification Proceedings

       A.    Plaintiffs Submit an Amended Trial Plan and Again
             Move for Class Certification
       Consistent with this Court’s decision, on remand the trial court held

further proceedings on defendants’ alleged defenses.

       At a December 17, 2014 status conference, the trial court instructed

plaintiffs to file an amended trial plan that the court indicated it would

“rigorously undertake every effort to evaluate its efficacy.” RR (Vol. 2) 5-6.

                                      - 15 -
      On January 30, 2015, plaintiffs renewed their motion for class

certification and submitted an amended trial plan which stated the elements of

each defense asserted by defendants, identified the issues of law and fact

arising from those defenses, and analyzed how the defenses could be tried on a

class-wide basis.    CR 119-39.     On March 2, 2015, defendants filed an

opposition to plaintiffs’ renewed class certification motion and proposed trial

plan. Defendants responded by arguing that the trial plan misstated the law and

failed to sufficiently address several of their defenses. CR 119-39. Defendants

also renewed their challenges to plaintiffs’ showing on the commonality,

typicality, adequacy and numerosity requirements of Tex. R. Civ. P. 42. Id. In

addition, defendant Statoil filed a supplemental brief in which it challenged the

adequacy of the named plaintiffs as class representatives.         3SCR 2-11.

Plaintiffs filed responsive briefs on March 16 and 19, 2015. The trial court

entertained oral argument by the parties on March 31, 2015. RR (Vol. 3) 1.

      B.     The Trial Court Grants Plaintiffs’ Renewed Motion
      On April 9, 2015, the Court certified plaintiffs’ claims for class

treatment. It entered an order certifying a class of “all holders of common

stock of Brigham Exploration Company as of October 17, 2011” and adopted

plaintiffs’ Second Amended Trial Plan. CR 3163-67; Brigham AB, App. B.

                                     - 16 -
     Defendants filed an interlocutory appeal from that order on April 27,

2015. CR 3168.

                                 - 17 -
                     SUMMARY OF THE ARGUMENT

       This is the second appeal stemming from three years of class certification

proceedings before the trial court. In the first appeal, defendants launched a

broad attack on the trial court’s class certification order and insisted, as they do

here, that a class could not be certified in this case. The Court did not credit

those arguments, but instead, reversed on the narrow issue of the trial plan’s

treatment of defendants’ pleaded defenses. Sending the case back to the trial

court, it identified a single issue for further consideration on class certification:

whether the trial plan “state[d] the elements of [Appellants’ pleaded] defenses”

and conducted a rigorous analysis of those defenses. Brigham I, 2014 Tex. App.

LEXIS 9068, at *9-*10.

       That is exactly what the trial court did. On remand, to supplement its

extensive previous work, the trial court held two additional hearings and

considered a full round of briefing specifically focused on Appellants’ pleaded

defenses. Those proceedings resulted in a lengthy, 20-page trial plan, fully half

of which is devoted to Appellants’ pleaded defenses. That plan identifies each

defense and the elements thereof, and explains in detail how the defenses will be

tried on a class-wide basis based on governing Delaware law and a number of

recent class trials in similar cases.

                                        - 18 -
         Unable to seriously challenge the trial court’s analysis, defendants stray

far beyond this Court’s opinion in Brigham I with a host of arguments unrelated

to the narrow issue presently before the Court. Defendants resort back to the

erroneous assertion that a class trial simply cannot be conducted here. In

defendants’ view, “the problems with the Order and Revised Trial Plan run

deeper than a simple failure to include sufficient ‘detail’ in the trial plan.”

Brigham AB 12, 17-18. The class, they maintain, is “hopelessly unworkable.”

Brigham AB 12.

         That notion, however, has been fundamentally rejected many times in

similar cases certified in Delaware and Texas. Courts have routinely found that

cases such as this one should be certified because breach of fiduciary claims

arising in the context of a merger transaction (as well as the defenses to those

claims) affect all shareholders equally. Courts in Delaware, which supplies the

substantive law governing plaintiffs’ claims, have put it this way: “[c]ases

[challenging the fairness of a corporate merger] are quintessential examples of

class actions.” In re JCC Holding Co. S’holder Litig., 843 A.2d 713, 722 n.20

(Del. Ch. 2003).1

1
         All citations and footnotes are omitted and emphasis is added, unless otherwise
noted.

                                         - 19 -
      These orders, like the class certification order in this case, are not simply

based on the theoretical assumption or expectation that the cases can be tried

classwide; class treatment has repeatedly been proven workable through actual

real-world experience. Numerous class cases like this one have not only been

certified, but successfully tried to judgment on a class-wide basis. In the past

two years alone, plaintiffs’ counsel here have tried two breach of fiduciary duty

cases stemming from completed acquisitions of publicly listed companies on a

class-wide basis in Delaware, despite the fact that the defendants in those

cases asserted the same defenses asserted by defendants in this case. SCR,

Ex. 1 at 17-18 (citing Dole and Rural/Metro); see also RR (Vol. 3) at 34 (citing

several additional similar class cases that have been tried). Plaintiffs’ counsel

has also tried one such class case – post-Bernal – in Texas, Pate v. Havens, No.

04-0006, 2005 Tex. LEXIS 305 (Tex. Apr. 8, 2005). Notably, the class in Pate

was first upheld by the Texas Court of Appeals, and then twice (on a petition

for review and then on a petition for rehearing) by the Texas Supreme Court

after full briefing on the merits. See id.; Pate v. Havens, No. 04-0006, 2004

Tex. LEXIS 1160 (Tex. Nov. 5, 2004). All of these cases were tried in a matter

of days, without the need for proof on individual issues.

      If cases involving the same claims, same defenses, same substantive law,

and the same type of merger transactions have been certified and successfully
                                   - 20 -
tried as class actions, why can’t that be done here? Tellingly, defendants have

no answer to this question. Defendants do not even try to reconcile their

position with the Dole and Rural/Metro trials or the other similar cases that

have likewise been tried on a class basis.

      Rather than grappling with this reality, defendants attempt to create their

own. In many instances, defendants advance arguments that are directly

contrary to controlling Delaware law. In others, defendants do not cite any

authority at all. In still others, they rely on overruled authority. For example,

defendants say plaintiffs’ class definition is “unworkable” and “invalid,” but

Delaware courts say just the opposite – that plaintiffs’ class definition is not

only proper, but “commonplace” and “ordinary.” Defendants say their defenses

require inquiries into class members’ state of mind, but Delaware courts say the

opposite – that these defenses do not apply in this type of case and, even if they

did, plaintiffs’ state of mind is “immaterial.” Defendants say damages require

an inquiry into the price received by each class member who sold into the

market, but, again, Delaware courts say the opposite – damages on a per-share

basis are the same for every shareholder and dependent on common, class-wide

testimony from an expert on the fair value of the company. These three

incorrect assertions, and variations on them, form the core of defendants’

appeal.
                                      - 21 -
      In short, the trial court’s class certification order and trial plan stand on

firm legal ground. As is evident from a record that now spans more than 4,500

pages, the trial court reached its decision only after the most rigorous of class

certification proceedings. Through those proceedings, the trial court fashioned

a trial plan that is grounded in real-world experience. That plan explains how

this case will be tried in a timely, manageable way, and it was properly adopted

by the trial court. As such, in no way does this case embody the “certify now,

worry later” approach of which defendants complain.             When the Texas

Supreme Court in Bernal spoke of “actual, not presumed” conformance with

Tex. R. Civ. P. 42, this is exactly the type of case it was talking about. The trial

court’s order granting certification should be affirmed.

                                       - 22 -
                                ARGUMENT

I.    This Court Reviews a Grant of Class Certification for
      Abuse of Discretion
      Plaintiffs-appellees agree that the standard of review is abuse of

discretion. Southwestern Ref. Co. v. Bernal, 22 S.W.3d 425, 439 (Tex. 2000).

“[T]he trial court is afforded broad discretion in defining the class and

determining whether to grant or deny a class certification.” Farmers Ins. Exch.

v. Leonard, 125 S.W.3d 55, 60 (Tex. App.–Austin 2003, no pet.) (citing

Intratex Gas Co. v. Beeson, 22 S.W.3d 398, 406 (Tex. 2000)).

II.   The Class Definition Is Appropriate
      Defendants lead with a challenge to the definition of the class. The trial

court certified a “class of all holders of Brigham common stock as of October

17, 2011” – the date of the announcement of the merger. CR 3163-67.

      Defendants argue that this class definition is “unworkable” and “invalid.”

Brigham AB 18-20. According to defendants, the certified class is overbroad

because it includes investors who held Brigham shares, but following the

announcement of the deal either (i) sold their shares on the open market, or (ii)

tendered their shares to Statoil. Id.

      This argument is directly at odds with settled Delaware law. “[I]t is

commonplace for class certification orders entered by this Court in actions

                                        - 23 -
involving the internal affairs of Delaware corporations to define the relevant

class as all persons . . . who owned shares as of a given date, and their

transferees, successors and assigns.” In re Triarc Cos., Inc. Class & Deriv.

Litig., 791 A.2d 872, 878-79 (Del. Ch. 2001).

      Defendants ignore their own authority, which states that, in merger

litigation, classes are “ordinarily” defined to include “all persons who held

shares as of the date the transaction was announced.” Brigham AB 20 (citing

In re Prodigy Commc’ns Corp. S’holders Litig., No. 19113, 2002 Del. Ch.

LEXIS 95, at *12 (Del. Ch. July 26, 2002)); see In re Celera Corp. S’holder

Litig., 59 A.3d 418, 426, 430 (Del. 2012) (upholding certification of a class

which includes shareholders as of the date of the announcement of the merger).

Such a class definition is consistent with the principle in Delaware that any

shareholder who owns stock at the time a director breaches his fiduciary duties

can assert a claim for damages. To have standing, “the plaintiff must have been

a stockholder at the time the terms of the merger were agreed upon because it is

the terms of the merger, rather than the technicality of its consummation, which

are challenged.” In re Beatrice Cos., Inc. Litig., No. 155, 1987 Del. LEXIS

1036, at *7-*8 (Del. Ch. Feb. 20, 1987); Dieter v. Prime Computer, Inc., 681
A.2d 1068, 1072 (Del. Ch. 1996) (stating “[i]t is not the Merger that constitutes

                                     - 24 -
the wrongful act of which Plaintiffs complain; it is the ‘fixing of the terms of

the transaction’”).2

       In Celera, the Delaware Supreme Court recently confronted and rejected

a challenge to the standing of a plaintiff who held shares at the time of the

announcement of the merger, but who sold the shares prior to the completion of

the merger. Celera, 59 A.3d at 426, 430; In re Celera Corp. S’holder Litig.,

No. 6304-CVP, 2012 Del. Ch. LEXIS 66, at *84-*88 (Del. Ch. Mar. 23, 2012).

The Celera court found that the plaintiff “has legal standing to represent the

class [which included shareholders at the time of the announcement of the

merger] because it held Celera stock at the time the merger was approved.” 59
A.3d at 431. In so doing, the court drew a distinction between shareholders

who held at the time of the announcement, who have standing, and those who

had purchased their shares after the proposed merger had been announced, who

do not have standing. Id. at 430.

       Similarly, in Schultz v. Ginsburg, 965 A.2d 661 (Del. 2009), which was

cited with approval by the Celera court, the Delaware Supreme Court found that

breach of fiduciary duty claims such as those at issue here are personal, and

therefore do not transfer to later purchasers. Id. at 667-68 & n.12 (noting that

2
        Defendants rely on Triarc, but fail to note that the class approved by the court in that
case actually included selling shareholders. Triarc, 791 A.2d at 879.

                                            - 25 -
this reasoning is in accord with Delaware’s strong policy against the purchase of

a lawsuit). This principle is well-rooted in Delaware law. Omnicare, Inc. v. NCS

Healthcare, Inc., 809 A.2d 1163, 1170 (Del. Ch. 2002) (the “policy animating 8
Del. C. §327 . . . has been applied to preclude stockholders who later acquire

their shares from prosecuting direct claims”).

       As plaintiffs explained to the trial court, plaintiffs were unable to locate a

single case in Delaware – hardly considered a plaintiff-friendly forum – in the

last 15 years in which a court has defined or limited a class in the way that

defendants say must be done here. None of those courts defined the class by

excluding investors who tendered their shares to the buyer. See CR 2630-3131

(Compendium of 68 Class Certification Orders). Nor did they define a class

based on those that sold after the announcement of the merger.3 Celera, 59
A.3d at 431 (finding that the class representative was typical, even though they

3
        Defendants attempt to distinguish some of these orders as settlement classes.
Brigham AB 36. However, many of the orders involve litigation classes. See, e.g., CR 2670
(Tab 1), 2709 (Tab 6), 2713 (Tab 7), 2744 (Tab 11), 2748 (Tab 12). In any event, in
Delaware, a settlement class receives the same level of scrutiny as a litigation class – i.e.,
“strict compliance with Rule 23” – to ensure that it satisfies all of the certification
requirements. Otherwise, the settlement would violate due process. In re Countrywide
Corp. S’holders Litig., No. 3464-VCN, 2009 Del. Ch. LEXIS 44, at *37-*38 (Del. Ch.
March 31, 2009). Further, like Texas, Delaware adheres to the rule that “‘[e]ach class
member must have standing to bring the suit in his own right.’” Dale v. Town of Elsmere,
No. 99M-01-15-VAB, 2001 Del. Super. LEXIS 161, at *21 n.29 (Del. Super. Ct. Apr. 27,
2001) (“‘The definition of a class cannot be so broad as to include individuals who are
without standing to maintain the action on their own behalf. Each class member must have
standing to bring the suit in his own right.’”).

                                           - 26 -
sold their shares into the open market). Texas courts, too, have rejected

defendants’ position. In the acquisition challenged by plaintiffs in the Pate

action, “[m]ore than 99% of the outstanding shares were voted in favor of the

merger.” Pate, 2003 Tex. App. LEXIS 9681, at *3. Yet, the court did not

exclude these shareholders from the class. CR 1653-58.

      Defendants also argue that a class of Brigham shareholders as of the date

of announcement of the merger cannot have claims related to a misleading

proxy. Brigham AB 19. Again, this argument finds no support in Delaware

law. See Celera, 59 A.3d at 426, 430 (discussing supplemental disclosures to

shareholders in class that included shareholders who held stock as of the date of

the announcement of the merger); Celera, 2012 Del. Ch. LEXIS 66, at *84-*88

(same); In re Transkaryotic Therapies, Inc., 954 A.2d 346, 356-57 (Del. 2008)

(discussing plaintiffs’ non-disclosure claims); Prodigy, 2002 Del. Ch. LEXIS

95, at *17-*18 (discussing remedial disclosures).

      Defendants cite this controlling authority only in passing because it is

fatal to their arguments. See Brigham AB 18-20. Defendants’ primary

authority in support of their argument, Bershad v. Curtiss-Wright Corp., 535
A.2d 840 (Del. 1987), has been overruled by the Delaware Supreme Court. As

the Chancery Court recognized in Gesoff v. IIC Indus., 902 A.2d 1130 (Del. Ch.

2006), “Kahn v. Lynch implicitly overruled the holding in Bershad.” Id. at
                                  - 27 -
1143 n.89. Norberg v. Security Storage Co. of Wash., No. 12885, 2000 Del.

Ch. LEXIS 142 (Del. Ch. Sept. 19, 2000), another decision cited by defendants,

is an unpublished trial court decision handed down before Celera. Norberg

also relies on Bershad.4

       Defendants also cite Steinhardt v. Howard-Anderson, No. 5878-VCL,

2012 Del. Ch. LEXIS 1 (Del. Ch. Jan. 6, 2012). But, just as the unsuccessful

objector did in Celera, defendants overstate the holding of Steinhardt in

arguing that a shareholder who elects to sell his or her shares on the open

market is improperly included in the class. In Steinhardt, the lead plaintiff did

not simply “sell stock in the open market.” Instead, as lead plaintiff, he

received confidential information about the defendant company during

4
        Norberg is also factually inapposite. There, a shareholder filed a complaint alleging
breach of fiduciary duty against the company’s directors and majority shareholders. 2000
Del. Ch. LEXIS 142, at *1-*2. While that action was pending, the defendants offered the
dissenting shareholders who sought appraisal a settlement, which was approved by the court,
that would allow them to accept the merger consideration. Id. at *3. After filing his original
unfairness claim and after the settlement agreement was offered, Norberg tendered his shares
to the company for the merger consideration without any caveat that he would continue to
pursue litigation. Id. at *7. The court found that Norberg had acquiesced because he
“abandoned his appraisal claim, challenged the fairness of the price and process and later,
despite his declared assessment of the unfairness of the transaction, freely and voluntarily
accepted the merger consideration.” Id. at *25. Unlike in Norberg, plaintiffs did not pursue
an appraisal claim and certainly have not settled their claims against defendants. Celera,
2012 Del. Ch. LEXIS 66, at *44 (distinguishing Norberg on these grounds).

        In addition, even though the Norberg court found that the plaintiff had acquiesced in
the merger, it still contemplated the certification of a class and reserved a decision on that
issue pending the proposal of an adequate class representative. 2000 Del. Ch. LEXIS 142, at
*29.

                                           - 28 -
discovery and, while possessing that inside information, shorted the company’s

stock before the market learned of the strength of the class’s claims.

Steinhardt, 2012 Del. Ch. LEXIS 1, at *6-*7. While the court dismissed

Steinhardt from the case, the court did not hold categorically that a lead

plaintiff simply cannot sell his or her shares before the challenged transaction is

consummated. Rather, because a lead plaintiff is a fiduciary to the class, the

court in Steinhardt relied on the principle that “‘[i]t is an act of disloyalty for a

fiduciary to profit personally from the use of information secured in a

confidential relationship.’” Id. at *32. Here, by contrast, defendants do not

claim and could not establish that plaintiffs used their fiduciary position to

profit from the use of confidential information. See Celera, 2012 Del. Ch.

LEXIS 66, at *58-*60 (distinguishing Steinhardt and refusing to find atypical

and inadequate a class representative who sold shares into the open market).

       Since Celera, no court has relied upon Norberg, Bershad or Steinhardt to

preclude a shareholder’s claim based upon the doctrines of acquiescence or

waiver, to pare down a proposed class, or to deny a motion for class

certification. Defendants omit this fact in their appeal. The class definition

approved by the trial court is the proper formulation for breach of fiduciary

                                       - 29 -
duty actions under Delaware law brought in connection with tender offers, such

as this one.5

III.   The Trial Plan Adopted by the Trial Court Complies with
       Brigham I and Bernal
       As required by Tex. R. Civ. P. 42 and Bernal, the trial court adopted a

trial plan in granting class certification. That plan, 20 pages in length, reflects

the court’s “rigorous analysis” of the class claims and is the result of numerous

hearings and thousands of pages of briefing and related submissions. Brigham

AB, App. B.

       It analyzes each of the claims certified for class treatment. Id. at 2-4.

For plaintiffs’ claims for breach of fiduciary duty, it identifies the governing

law and the applicable burden of proof (see id. at 2-3); for plaintiffs’ aiding-

and-abetting claim, it identifies the standard governing the claim (see id.). It

further identifies plaintiffs’ theories and explains how plaintiffs intend to prove

their claims, identifying the common, class-wide evidence that plaintiffs will

introduce at trial to show liability, causation and damages. Id. at 13-17. It also

5
         Defendants’ repeated characterization of this case as a “securities class action” (see
Statoil AB xi, 2) reflects a fundamental misunderstanding of the claims asserted here. This
is a case for breach of fiduciary duty under Delaware law, not for violations of federal
securities statutes, and the requirements for proving a fiduciary duty claim (such as standing)
differ from those necessary to prove a securities fraud claim.

                                            - 30 -
explains how plaintiffs intend to calculate and allocate damages to the class.

Id. at 16.

       In addition, as directed by this Court in Brigham I, the trial plan states

the elements of each defense asserted by defendants (see Brigham AB, App. B

at 4-12), identifies the common issues of law and fact arising from those

defenses (see id. at 16-20), and explains how the defenses will be tried in a

manageable, time efficient manner. See id.; Tex. R. Civ. P. 42(c). As such, the

trial plan complies with Bernal’s mandate that it explain how plaintiffs’ claims

and defendants’ defenses can be tried on a class-wide basis.

       A.    The Trial Plan Properly Analyzes Plaintiffs’ Claims

             1.     The Trial Plan Properly Analyzes How
                    Damages Will Be Proven
       Citing no legal authority, defendants first contend that computing

damages in this case would raise individualized issues, because it would require

the fact-finder to identify and evaluate the sales price for each share sold by

class members following the announcement of the deal. Brigham AB 24-25.

This contention is easily dispensed.

       As explained above, under Delaware law, “[i]t is not the Merger that

constitutes the wrongful act of which Plaintiffs complain; it is the ‘fixing of the

terms of the transaction.’” Dieter, 681 A.2d at 1072. Thus, it is the investors

                                       - 31 -
who held shares at the time of the announcement of the merger who are

damaged by defendants’ misconduct. Celera, 59 A.3d at 426, 430.

      Consistent with this principle, damages for victims of a breach of

fiduciary duty in the context of a merger are determined by measuring the

difference between the fair value of the company and the price offered. The

first part of the equation – fair value – is established through expert testimony

about the value of company acquired. The second part of the equation – price

offered – is simply the per share amount offered by the acquiror. This is clearly

explained in the trial plan adopted by the trial court. Brigham AB, App. B at

16-17.

      This has long been the accepted damages measure in breach of fiduciary

duty cases stemming from a merger. Only a couple of months ago, after a

plaintiffs’ verdict against two directors in a class action stemming from the

acquisition of Dole Foods, the Delaware Court of Chancery employed this very

formula to award $2.74 per share to each of the Dole shareholders who were

harmed by the directors’ breach of fiduciary duty. In re Dole Food Co., Inc.

S’holder Litig., No. 8703-VCL, 2015 Del. Ch. LEXIS 223, at *149-*150 (Del.

Ch. Aug. 27, 2015); see also In re PNB Hldg. Co. S’holders Litig., No. 28-N,

2006 Del. Ch. LEXIS 158, at *5 (Del. Ch. Aug. 18, 2006) (“I conclude that the

fair value of a share of PNB on the date of the Merger was $52.34, which is
                                   - 32 -
$11.34 per share higher than the consideration offered in the Merger.”); In re

Rural Metro Corp. S’holders Litig., 88 A.3d 54, 107 (Del. Ch. 2014) (entering

judgment and awarding damages to the stockholder class at an identical $4.17

per share for the plaintiff and each eligible class member).

      Nothing about this formula requires the fact-finder to “identify all the

different sales prices and the dates of the sales [for those shareholders who

elected to sell into the open market after the announcement of the deal] in order

to compute damages,” as defendants argue. Brigham AB 24. Such an inquiry

is irrelevant under Delaware law. Joseph v. Shell Oil Co., No. 7450, 1985 Del.

Ch. LEXIS 458, at *14 (Del. Ch. Feb. 8, 1985) (“In short, if a finding of

damages occurs, the damages will be mathematically allocated on a per share

basis to all the stockholders in similar circumstances. There is a total absence

of individual issues and therefore there would be no reason for the Court to

make a separate finding of damages as to each share or each shareholder.”).

             2.     Plaintiffs Offer One Damages Theory
      Defendants also contend that the trial plan “fails to address the impact of

plaintiffs’ conflicting damages theories on typicality and predominance.”

Brigham AB 41.

      This argument makes no sense, as plaintiffs only offer one method of

establishing damages. Plaintiffs intend to establish damages by measuring the
                                     - 33 -
difference between the fair value of the company and the price offered. See

Brigham AB, Appendix B at 16.

      In any event, whether pitched under the guise of “individualized

damages” or “conflicting damages theories,” defendants’ argument provides no

ground for reversal. As explained above, Delaware law does not require a

separate finding of damages as to each share or each shareholder. See supra

§III.A.1. If liability and damages are established, each class member will

receive an identical amount per share for each share of Brigham stock they

owned at the time of the announcement of the deal. Dole, 2015 Del. Ch.

LEXIS 223, at *154-*155 (awarding damages to the stockholder class at an

identical $2.74 per share to each eligible class member); Rural Metro, 88 A.3d

at 107 (entering judgment and awarding damages to the stockholder class at an

identical $4.17 per share for the plaintiff and each class member). Because

each shareholder is being awarded an identical amount per share, this damages

measure does not raise commonality or typicality issues.

             3.    The Trial Plan Properly Explains Plaintiffs’
                   Breach of Fiduciary Duty Claims
      Defendants also contend that the trial plan is deficient because it did not

analyze, under 8 Del. C. §102(b)(7), the applicability of the exculpatory

                                     - 34 -
provision in Brigham’s charter, and because it did not mention that plaintiffs

supposedly must prove that the Board acted in bad faith. Brigham AB 40.

      As an initial matter, the trial plan approved by the court did mention and

discuss, at length, both of these issues. The trial plan specifically references

bad faith in connection with its discussion of defendants’ §102(b)(7) defense.

See Brigham AB, Appendix B at 10. In addition, the trial plan repeatedly

discusses the duty of good faith, and “‘acting in bad faith’ and ‘not acting in

good faith’ are two sides of the same coin.” Dole, 2015 Del. Ch. LEXIS 223, at

*129; Brigham AB, Appendix B at 7, 9-11, 17.

      Defendants essentially fault the trial court for not finding, at the class

certification stage, that plaintiffs’ claims are precluded as a matter of law. This,

of course, would have been improper. “‘[D]eciding the merits of the suit in

order to determine the scope of the class or its maintainability as a class action

is not appropriate.’” DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 315

(Tex. 2008).

      Defendants argue that plaintiffs must prove that the Board acted in bad

faith to prevail on their claims. Brigham AB 40. First, this issue has no impact

on class certification, because, even if plaintiffs must show bad faith, that

showing would need to be made by all class members – making it a common

issue. Defendants do not contend otherwise.
                                  - 35 -
      Second, defendants’ assertion is incorrect as a substantive matter. As the

Delaware Supreme Court has made clear: “When a board of directors’ loyalty is

questioned . . . courts determine whether a conflict has deprived stockholders of

a ‘neutral decision-making body.’” Cinerama, Inc. v. Technicolor, Inc., 663
A.2d 1156, 1170 (Del. 1995) (emphasis in original). It further explained that

“the manipulation of the disinterested majority by an interested director vitiates

the majority’s ability to act as a neutral decision-making body.” Id. at 1170

n.25 (citing Mills Acquisition Co. v. MacMillan, Inc., 559 A.2d 1261, 1279

(Del. 1989)); Rural Metro, 88 A.3d at 85 (“The presence of an exculpatory

provision does not eliminate the underlying duty of care or the potential for

fiduciaries to breach that duty.”).

      Here, the Board and management were not only conflicted as a result of

the $80 million they stood to gain in special payments if the deal closed, but

Ben Brigham failed to comply with his “rigorous affirmative duty of

disclosure” to his fellow Board members before seeking approval of the

merger. See Mills, 559 A.2d at 1283; CR 688-89 (alleging that B. Brigham

failed to disclose to the Board that he had a made a deal with Statoil for $36.50,

when the Board had told him to hold firm at $40). Such misconduct deprives

defendants of any protection provided by 8 Del. C. §102(b)(7) and the

exculpatory provision in Brigham’s charter. Dole, 2015 Del. Ch. LEXIS 223,
                                   - 36 -
at *97-*98, *124-*134 (citing Mills and finding that 8 Del. C. §102(b)(7) did

not exculpate two directors who breached their duty of loyalty by deceiving the

special committee).

             4.    The Trial Court Properly Understood and
                   Explained the Role of Plaintiffs’ Claims Based
                   Upon Defendants’ Non-Disclosures

      Defendants also contend that the trial court “demonstrate[d] a lack of

rigor” when it included reference to the duty of candor (also commonly referred

to as the duty to disclose) in the class certification order and trial plan.

Defendants say the breach of duty of candor is “a nonexistent legal claim.”

Brigham AB 39.

      This is incorrect. Delaware recognizes that directors who fail to disclose

material facts to shareholders in connection with a merger, or make a false

representation, have violated their legal duties to shareholders.       As the

Delaware Chancery Court in Chen v. Howard-Anderson, 87 A.3d 648 (Del. Ch.

2014) recently explained in rejecting the very argument defendants make here:

      [D]efendants argue that because the Merger closed, and because it
      was not a short-form merger or a merger involving a controlling
      stockholder, it is no longer possible for this court to award a
      remedy for a breach of the duty of disclosure, warranting
      summary judgment in their favor. That is an incorrect statement
      of current Delaware law.

                                    - 37 -
      If the plaintiffs prove at trial that the defendants committed a non-
      exculpated breach of the fiduciary duty of disclosure, then
      damages can be awarded using a quasi-appraisal measure.

Id. at 691 (citing In re Orchard Enters., Inc. S’holder Litig., 88 A.3d 1 (Del.

2014)) (surveying Delaware decisions); see also Malone v. Brincat, 722 A.2d 5,

9 (Del. 1998). This so-called “nonexistent legal claim” recently resulted in a

$75.7 million plaintiffs’ verdict after a class trial in Rural/Metro. In re

Rural/Metro Corp. Stockholders Litig., 102 A.3d 205, 213 (Del. 2014) (post-

trial decision setting the amount of the advisor’s liability for false information

in proxy statement at $75.7 million).

      Defendants also contend that plaintiffs dropped this claim, making too

much out of plaintiffs’ statement that they are not seeking specific monetary

damage for the alleged non-disclosures. Brigham AB 34-35. But just because

plaintiffs do not seek specific monetary relief on the basis of the non-

disclosures does not mean that the non-disclosure allegations are irrelevant to

plaintiffs’ claims and have no role in this case. Under Delaware law, non-

disclosure allegations implicate the duty of care and the duty of loyalty. In re

Tyson Foods, Inc. Consol. S’holder Litig., 919 A.2d 563, 597-98 (Del. Ch.

2007) (“where there is reason to believe that the board lacked good faith in

approving a disclosure, the violation implicates the duty of loyalty”);

Crescent/Mach I Partners, L.P. v. Turner, No. 17455, 2000 Del. Ch. LEXIS
                                      - 38 -
145 (Del. Ch. Sept. 29, 2000) (“The fiduciary duty of disclosure arises as a

subset of a director’s fiduciary duties of loyalty and care.”).

       Thus, as the trial plan explains, plaintiffs will make an affirmative

showing on non-disclosure in their case-in-chief. See Brigham AB, App. B at

16. The trial plan correctly analyzes the duty of candor within the context of

plaintiffs’ claims for care and loyalty. See Brigham AB, App. B at 16. The

trial plan also correctly recognizes that, if plaintiffs prove a breach of the duty

of candor, it will defeat several of defendants’ affirmative defenses, because

those defenses require that shareholders were informed of all material facts

surrounding the acquisition. Brigham AB, App. B at 7-8, 19-20; see infra

§III.B.1.b. And, importantly, the trial plan explains how the non-disclosures

can be proved through evidence common to the class. Brigham AB, App. B at

16.

              5.     The Trial Plan Properly Analyzes Plaintiffs’
                     Aiding-and-Abetting Claims Against Statoil

       Appellees are at a loss to explain Statoil’s argument that the trial plan

“failed to account” for and “ignored” the “knowing participation” element of

plaintiffs’ aiding-and-abetting-claim under Delaware law. Statoil AB 17. This

assertion is blatantly false.

                                      - 39 -
      The trial plan clearly identifies the “knowing participation” element of an

aiding-and-abetting claims, citing the relevant authority, and lays out the

standard plaintiffs must meet to satisfy this element. It states:

      To prevail on their claim for aiding and abetting a breach of
      fiduciary duty, plaintiffs must prove: (1) the existence of a
      fiduciary relationship; (2) a breach of the fiduciary’s duty;
      (3) knowing participation in that breach by Statoil; and
      (4) damages proximately caused by the breach. As to the third
      element – knowing participation, plaintiffs must show that the
      buyout group “‘sought to induce the breach of a fiduciary
      duty’” or “‘make factual allegations from which knowing
      participation may be inferred.’”

See Statoil AB, App. B at 4.

      In its brief, Statoil also complains that the trial plan ignores the four ways

in which a plaintiff can satisfy the “knowingly participation” element of an

aiding-and-abetting claim. See Statoil AB 17. But the exact language cited by

Statoil is incorporated into the trial plan. Compare Statoil AB 17 with

Brigham AB, App. B at 4-5.

      Additionally, Statoil, like Brigham, faults the trial court for not finding at

the class certification stage that plaintiffs could not prevail on the merits of

their aiding-and-abetting claims, speculating that the claims would have been

dismissed in Delaware. Statoil AB 18. As noted above, this would have been

improper, because a trial court does not decide the merits of a suit in

determining whether class certification is appropriate. See supra, III.A.3.
                                      - 40 -
      At the class certification stage, a trial court must only understand the

nature and extent of the claims sought, so that it can determine if the claims can

be tried class-wide. Daimler Chrysler, 252 S.W.3d at 315. That the trial court

did. As explained in the trial plan, plaintiffs’ aiding and abetting claim is

predicated on plaintiffs’ breach of fiduciary duty claim. Brigham AB, App. B

at 15. Plaintiffs’ claims share three of the same elements and thus, will rely on

much of the same proof, such as internal Brigham and Statoil documents,

testimony from Brigham’s directors and officers and certain of its executives, e-

mails and other correspondence between Brigham and Statoil, and documents

and testimony from the financial advisors retained by Brigham and Statoil. All

of this evidence is common to the class, and Statoil does not suggest otherwise.

      It is clear under Delaware law that aiding-and-abetting claims in the

merger context rest on common, class-wide proof. See Rural Metro, 88 A.3d
54 (finding, after class-wide trial, that the directors of Rural Metro Corp. had

breached their fiduciary duties to a class of shareholders in connection with a

sale of the company and that the Board’s financial advisor had aided and

abetted that violation). This is precisely why Statoil levies an attack on the

                                      - 41 -
merits of plaintiffs’ claim, rather than arguing that the aiding-and-abetting

claim raises individual issues.6

       B.      The Trial Plan Properly Analyzes Defendants’
               Pleaded Defenses
       As noted above, the trial court’s analysis of defendants’ defenses was the

focus of this Court’s decision in Brigham I, 2014 Tex. App. LEXIS 9068, at *9-

*10. Defendants nevertheless bury their arguments concerning their defenses

in the middle of their brief – the position typically reserved for an appellant’s

weakest arguments. Understandably so, as they find no support in Delaware

law.

       Defendants focus on five of the 13 alleged defenses – acquiescence,

ratification, estoppel, waiver and the proportionate responsibility. Brigham AB

25-33. Defendants say the 20-page trial plan adopted by the trial court, more

than half of which is dedicated to defendants’ pleaded defenses, “glosses over”

how these defenses bear on the class certification analysis under Tex. R. Civ. P.

42. Brigham AB 26. They are wrong, for the reasons discussed below.

6
        Despite contending that plaintiffs’ aiding-and-abetting claims have no merit – calling
them “outlandish” – Statoil notably has never moved for summary judgment in the four years
this action has been pending. Statoil AB 2. The reason for that is simple: discovery has
turned up considerable evidence that Statoil sought to induce a breach of fiduciary duty. For
example, Statoil was informed that Ben Brigham did not have Board authorization to agree
to a deal at $36.50, yet nevertheless encouraged him to obtain full Board approval of the
deal. CR 434-35.

                                           - 42 -
             1.    The Court Fully Understood and Gave Due
                   Consideration to the Effect of Defendants’
                   Alleged Defenses of Acquiescence, Ratification,
                   Estoppel, and Waiver
      The rigorous analysis required under Bernal at class certification is not a

one-way street. That standard applies equally to both plaintiffs’ claims and

defendants’ defenses. Thus, just as plaintiffs cannot obtain class certification

by relying solely on assertions of commonality and predominance, defendants

cannot defeat certification by asserting myriad defenses and then proclaiming

that they must be allowed to pursue these defenses on an individual-by-

individual basis. As the Texas Supreme Court recognized in BMG Direct

Marketing, Inc. v. Peake, 178 S.W.3d 763 (Tex. 2005), one of defendants’

primary authorities, “in many cases it would be unfair to allow a defendant to

preclude class certification simply by alleging an affirmative defense.” Id. at

778. Yet that is exactly what defendants attempt to do here.

                   a.     Delaware Has Repeatedly Found These
                          Defenses Inapplicable to Plaintiffs’
                          Claims
      Defendants do not grapple with the most troubling flaw in their position.

The Delaware Supreme Court has already rejected the notion the acquiescence,

ratification, waiver and estoppel doctrines have any application to plaintiffs’

claims.

                                     - 43 -
      In Gantler v. Stephens, 965 A.2d 695 (Del. 2009), the Delaware Supreme

Court held that shareholders do not “ratify” a merger by tendering their shares:

“the ratification doctrine does not apply to transactions where shareholder

approval is statutorily required.” Id. at 714. Here, as defendants acknowledge,

shareholder approval – i.e., shareholders being convinced to tender their shares

to Statoil – was “statutorily required” in order for Statoil to execute the top-up

option and complete the back-end of the short-form merger. See 8 Del. C. §253

(requiring threshold of shares to complete short-form merger). Because

shareholder approval was statutorily required, defendants’ “ratification”

defense is baseless as a matter of law.

      Similarly baseless is the assertion that the acquiescence, waiver and

estoppel doctrines are a defense to plaintiffs’ claims. As noted above, in

Celera, the Delaware Supreme Court held that a plaintiff (NOERS) who sold

all of its shares into the open market before the merger closed was not subject

to “equitable defenses” such as “waiver” and “acquiescence.” 59 A.3d at 431.

Just like here, Celera involved the acquisition of a publicly traded company via

a tender offer with a back-end top-up option. Id. at 425. An objector, BFV,

argued that NOERS had acquiesced in the merger and had waived its claims by

selling its shares. Id. at 426-27, 431. The court overruled the objection, finding

that plaintiff had standing to pursue its claims, that plaintiff was an adequate
                                     - 44 -
class representative, and that the trial court had correctly certified a class which

included shareholders who held shares at the date of the Board’s approval of

the merger agreement. Id. at 431; Celera, 2012 Del. Ch. LEXIS 66, at *36

(“the mere act of tendering one’s shares while simultaneously pursuing an

equitable claim is not sufficient to show acquiescence”).

      In so doing, the Delaware Supreme Court affirmed the findings of the

Chancery Court, which held that such equitable defenses did not apply for at

least two reasons. First, “[w]here a squeeze-out merger extinguishes the

minority’s legal right to remain shareholders of the corporation, ‘the “choice”

between accepting the possibly inadequate merger consideration and pursuing a

possibly inadequate appraisal remedy’ is not ‘a meaningful choice.’” Celera,

2012 Del. Ch. LEXIS 66, at *39; Celera, 59 A.3d at 431. Here, too, because

defendants structured the deal as a tender offer, and because the Board granted

Statoil the right to purchase newly-issued shares so as to allow it to cross the

90% short-form threshold (upon obtaining 50% of the outstanding shares), class

members were left without a meaningful choice. Celera, 59 A.3d at 431

(“where minority shareholders are faced with a choice between accepting an

inadequate merger buy-out or pursuing inadequate appraisal, the shareholders

did not acquiesce in the merger by accepting the buy-out”).

                                       - 45 -
      Second, the requirement that a shareholder show “unequivocal approval

of the transaction” could not be met. Unlike the ordinary context of a long-

form merger with a shareholder vote, in the context of a two-tiered tender offer

with a back-end top-up option (again, the structure of the transaction at issue

here), shareholders are “‘powerless to do anything about’” the merger. Celera,

2012 Del. Ch. LEXIS 66, at *43. Defendants ignore this controlling authority.

                    b.     Even if They Applied, Defendants’
                           Pleaded Defenses Do Not Preclude Class
                           Certification

      Notably, despite authority holding that defendants’ defenses do not apply

as a matter of law, the trial court did not just dismiss them out of hand as

inapplicable. It instead assumed that the defenses applied to plaintiffs’ claims

and analyzed their role at a class trial. Brigham AB, App. B at 19-20.

      As defendants acknowledge, an essential factual predicate for applying

the acquiescence, ratification, waiver, and estoppel doctrines is that the

shareholder was fully informed of all material facts. Brigham AB 26. Here, as

part of their duty of care and duty of loyalty claims, plaintiffs contend that the

class was not fully informed when they tendered their shares to Statoil. CR 41-

54. Plaintiffs will make this showing in their case-in-chief.

      As explained in the trial plan, if plaintiffs establish that defendants did

not disclose these facts, plaintiffs will prevail on their claims and will negate
                                      - 46 -
one of the essential elements of the defenses. Gantler, 965 A.2d at 712 (where

the plaintiff alleges a “cognizable claim that the [14D-9] contained a material

misrepresentation, [that allegation] eliminates an essential predicate for

applying the doctrine [of ratification], namely, that the shareholder vote was

fully informed”). If plaintiffs do not establish that defendants withheld material

information, plaintiffs’ claims fail and defendants are entitled to judgment on

that claim, without the need for a separate finding on the defenses. See Corwin

v. KKR Fin. Holding, LLC, No. 629, 2015 Del. LEXIS 473, at *21 (Del. Oct. 2,

2015) (addressing the impact of a showing of nondisclosure of material

information on the ratification defense). Either way, these defenses will be

disposed of as the parties litigate the merits of plaintiffs’ claims.

       Ignoring this, defendants say that their defenses will require an inquiry

into the state of mind of each individual class member. Brigham AB 28. But

this is not the law in Delaware. In Delaware, a shareholder’s state of mind is

irrelevant. Klaassen v. Allegro Dev. Corp., 106 A.3d 1035, 1047 (Del. 2014)

(“For the defense of acquiescence to apply, conscious intent to approve the act

is not required . . . .”); see id. (plaintiff’s “conscious intent” is immaterial to an

acquiescence finding); Frank v. Wilson & Co., 32 A.2d 277, 283 (Del. 1943)

(“Conscious intent is not an element, nor does ratification require a change of

                                       - 47 -
position or prejudice.”); Bundesen v. Beck, No. 11,347, 1992 Del. Ch. LEXIS

42, at *26 (Del. Ch. Feb. 12, 1992) (“Estoppel does not require intent . . . .”).

      In Brevan Howard Credit Catalyst Master Fund Ltd. v. Spanish Broad.

Sys. Inc., No. 9209-VCG, 2015 Del. Ch. LEXIS 141 (Del. Ch. May 19, 2015),

the Delaware Chancery Court was recently confronted with this issue in the

context of a motion to compel discovery into the state of mind of shareholders.

Id. at *13. The court rejected the motion on the ground that the discovery was

irrelevant:

      Plaintiffs point out . . . that they should at least be able to take
      discovery about the state of mind of their predecessors, assuming
      those predecessors can be identified . . . . The problem with that
      assertion, again, is that acquiescence is focused on the
      understanding of the Defendant. The record is clear that the
      Plaintiffs and their predecessors, owners of Series B Preferred
      Stock at the time the complained-of debt was incurred, had actual
      or constructive notice that SBS intended to acquire the debt, and
      stood silent. Their intent in so doing is not pertinent here.

Id. at *13-*14. The court further explained that acquiescence requires “‘the

other party to believe’” that the plaintiffs had acted in a way to lead them to

believe “‘the act ha[d] been approved. For the defense of acquiescence to

apply, conscious intent to approve the act is not required, nor is a change of

position or resulting prejudice.’” Id. at *13 n.18.

      Defendants eschew this authority in favor of several inapplicable

decisions from Texas which arise under different circumstances. They do not
                                     - 48 -
involve Delaware substantive law and certainly do not involve a breach of

fiduciary duty claim by a shareholder. Instead, they involve claims under

Texas common law for negligence stemming from plaintiff’s exposure to

asbestos (Louisiana-Pacific Corp. v. Andrade, 19 S.W.3d 245, 247 (Tex.

1999)), a misrepresentation claim under Texas common law against an

employee leasing company (Texas Workers’ Comp. Ins. Facility v. Personnel

Servs., 895 S.W.2d 889, 890 (Tex. App.–Austin, 1995, no writ)), and personal

injury claims under Texas common law for mental anguish caused by the sight

and sound of an explosion at an oil refinery (Bernal, 22 S.W.3d at 429). The

only Delaware authority cited by defendants, Nevins v. Bryan, 885 A.2d 233

(Del. Ch. 2005), likewise did not involve a merger, shareholder-plaintiffs, or a

breach of fiduciary duty claim, but instead, involved a plaintiff who challenged

his removal as a director of a non-profit corporation.

      Defendants also regurgitate their argument that Delaware courts have

applied the doctrines of waiver and acquiescence to dismiss lawsuits (see

Brigham AB 30), citing Norberg and Bershad, but, as discussed above, those

decisions have been overruled on the points for which defendants cite them and

are no longer good law. See supra §II.

                                     - 49 -
                    c.     Defendants Cannot Overcome the Reality
                           that These Types of Cases Are Routinely
                           Certified and Tried on a Class-Wide
                           Basis
      The legal and practical realities concerning the acquiescence, ratification,

waiver, and estoppel doctrines explain why these cases are routinely certified

and tried on a class-wide basis, even though these defenses are routinely

pleaded by defendants.

      This Court need look no further than two recent trials from Delaware to

recognize that potential defenses such as acquiescence will not, as defendants

contend, “require countless mini-trials.” See Brigham AB 29. As here, Dole

and Rural Metro were two breach of fiduciary duty cases stemming from a

completed acquisition of a publicly listed company. And, as here, defendants

asserted defenses based upon the doctrines of acquiescence, ratification, waiver

and estoppel. SCR, Ex. 1 at 32-38 (Rural Metro, Answer to Verified Second-

Amended Complaint); id. (Dole Food, Answer and Affirmative Defenses).

These defenses did not prevent a class-wide trial in those actions and they will

not do so here, either. In fact, all of the claims and defenses in the Dole and

Rural Metro cases were resolved, in plaintiffs’ favor, in a single trial.

      Similarly, in Pate, defendants asserted that plaintiffs’ claims “were

extinguished by the fully informed shareholder vote approving and ratifying the

                                     - 50 -
merger.” App. A at 3. Yet, the certified class included “‘all persons or entities,

other than defendants, who were Pennzoil-Quaker State Corp. shareholders of

record on August 1, 2002.’” CR 1058. After class certification was upheld by

the Texas Court of Appeals, the case was tried to verdict on a class-wide basis

in three weeks. See Pate, 2004 Tex. LEXIS 1160; Pate, 2005 Tex. LEXIS 305.

      Defendants simply have no explanation as to why plaintiffs’ claims

cannot be tried on a class-wide basis, when it is routinely done in other actions

involving the same claims, same defenses and transactions structured in the

same way. Cases such as Pate, Rural/Metro and Dole – only a few of many

examples – have proven that cases such as this do not create manageability or

commonality problems.

             2.     The Court Properly Analyzed Defendants’
                    “Proportionate Responsibility” Defense
      Recognizing that their defenses based on the doctrines of acquiescence,

ratification, waiver and estoppel will not carry the day, defendants rushed to

amend their answer after Brigham I to add a purported defense based upon the

doctrine of proportionate responsibility under Tex. Civ. Prac. & Rem. Code

Ann. §33.002(a)(1). In their appeal, defendants claim the trial court must

submit a question to the jury apportioning responsibility for harm between the

                                      - 51 -
parties, and that the trial court failed to account for this “defense.” Brigham

AB 38-39.

      This doctrine, however, is a creature of Texas substantive law and does

not apply to plaintiffs’ claims.      Plaintiffs’ claims are governed by the

substantive law of Delaware because Brigham was a Delaware corporation – a

point defendants do not dispute.        Article 8.02 of the Texas Business

Corporation Act provides that the internal affairs (including the actions of its

Board Members) of a foreign corporation doing business in Texas are

controlled by the substantive law of the state of incorporation.          Texas’

proportionate responsibility statute, Tex. Civ. Prac. Rem. Code Ann.

§33.002(a)(1), is substantive, not procedural law. Harris Constr. Co. v. GGP-

Bridgeland, LP, No. H-07-3468, 2009 U.S. Dist. LEXIS 69476, at *3 n.1 (S.D.

Tex. Aug. 10, 2009) (“Texas proportionate responsibility statutes reflect a

substantive state policy” and are not procedural); cf. Cooper v. Ross & Roberts,

Inc., 505 A.2d 1305, 1307 (Del. Ch. 1986) (“prejudgment interest, like the issue

of damages, is substantive, and the state whose laws govern the substantive

legal questions also govern the question of prejudgment interest”). Thus, this

“defense” is not available to defendants here.

      In any event, defendants offer nothing to establish that the doctrine of

proportionate responsibility would play any role at a trial on plaintiffs’ claims.
                                    - 52 -
Any finding of proportionate fault must, of course, be grounded in some legally

culpable act by plaintiffs. See Tex. Civ. Prac. & Rem. Code Ann. §33.003.

      But, tellingly, defendants are silent on this point, failing to identify any

legal duty owed by plaintiffs to defendants. Defendants’ omission is not an

oversight. While directors of a company owe a fiduciary duty to plaintiffs in

connection with an acquisition, the reverse is not true.              Non-insider

shareholders do not owe legal duties to a company or its directors under

Delaware law. Yucaipa Am. Alliance Fund II, L.P. v. Riggio, 1 A.3d 310, 357

n.245 (Del. Ch. 2010) (“the board owes fiduciary duties to the company,

something Yucaipa, as a stockholder, generally does not”). As such, there is no

duty for plaintiffs to breach, and they cannot be held liable for some percentage

of harm caused by defendants’ misconduct.

      Defendants also need to provide evidence of wrongdoing (along with

some evidence establishing a causal connection between that wrongdoing and

the harm) before any question regarding proportionate responsibility can be

submitted to the jury. Tex. Civ. Prac. & Rem. Code §33.003(b). Again, despite

having many opportunities to do so, defendants have never made any such

showing or even explained what their showing at trial might entail.

      In their appeal, defendants contend that “[s]hareholders who chose to sell

in the open market . . . are potentially responsible for all or part of any alleged
                                       - 53 -
harm.”    Brigham AB 38.         Again, defendants cite no authority for this

proposition because there is none. As a matter of law, selling shares into the

open market is not a basis for the jury to re-apportion fault between the parties

because it is not a legally culpable act. Shareholders are free to sell their shares

into the open market. In re Gaylord Container Corp. S’holders Litig., 747 A.2d
71, 78 (Del. Ch. 1999) (“stockholders . . . are ordinarily free to sell their shares,

and purchasers who . . . ordinarily free to buy those shares”); Brigham AB 38-

39. To plaintiffs’ knowledge, no court – in Delaware or elsewhere – has found

that shareholders bear some responsibility for the harm caused by a board’s

failure to fulfill its fiduciary duties. Nor have they applied the doctrine of

comparative fault to diminish or preclude a shareholder’s recovery in

circumstances even remotely similar to those presented by this case.

IV.    Plaintiffs Satisfied the Requirements for Class Certification
       Defendants also raise challenges to the trial court’s findings on several of

the class certification requirements. Rule 42 of the Texas Rules of Civil

Procedure authorizes a trial court to certify actions for class treatment.

Certification of a proposed class is appropriate where the party proposing a

class action shows that: (i) the class is so numerous that joinder of all members

is impracticable; (ii) there are questions of law or fact common to the class;

(iii) the claims or defenses of the representative parties are typical of the claims
                                       - 54 -
or defenses of the class; and (iv) the representative parties will fairly and

adequately protect the interests of the class. Tex. R. Civ. P. 42(a). Common

questions of fact or law must predominate over questions affecting only

individual members, and a class action must be superior to other available

methods for the fair and efficient adjudication of the controversy. Tex. R.

Civ. P. 42(b).

      On appeal, defendants do not raise any objections to the trial court’s

findings regarding commonality. As such, defendants have waived any claim

of error on this prerequisite and it is not at issue on this appeal. Tex. R. App.

38.1(e) (the appellant’s brief must state concisely all issues or points presented

for review).

      A.       The Trial Court Acted Within Its Discretion in
               Finding that Plaintiffs’ Claims Are Typical
      In a variation on their previous argument that the class definition is

overbroad, defendants contend that the trial court’s finding that plaintiffs’

claims are typical of the Class is in error. In particular, they argue that

plaintiffs’ claims are atypical of the claims of the class because plaintiffs sold

their shares into the open market and did not tender their shares to Statoil.

Brigham AB 43.

                                      - 55 -
      This is another argument that has been considered and rejected by the

Delaware Supreme Court. In Celera, 59 A.3d 418, the Delaware Supreme

Court held that there was no atypicality between the plaintiffs, who had not

tendered their shares, and the class members who had had tendered shares.

Defendants cite Celera in passing, but fail to acknowledge its holding. Indeed,

as noted above, despite the fact that the doctrines of acquiescence, ratification,

waiver or estoppel are regularly asserted by defendants, these cases are tried on

a class-wide basis. See supra §III.B.1.c.

      In Delaware, when a corporate fiduciary commits a breach of duty, all

shareholders at the time of the merger announcement are identically harmed.

Turner v. Bernstein, 768 A.2d 24, 33 (Del. Ch. 2000) (“[i]n challenges to

corporate mergers brought on behalf of the shareholders not affiliated with the

defendants, it is virtually never the case that there is any legitimate basis that a

defendant might be found liable to some plaintiffs but not others”). That

certainly holds true in this case. All Brigham shareholders at the time the

merger agreement was announced became victims of the unfair process used to

force the acquisition; all were denied fair value of their shares; and all were

harmed by defendants’ self-dealing. Bernal, 22 S.W.3d at 435 (the claims of

the class representative need not be identical or perfectly coextensive with

                                       - 56 -
those of the class as a whole; the claims need only be substantially similar with

those of the class).

      Defendants say that “[n]umerous courts have held that the disparity

between tendering and non-tendering shareholders prevents plaintiffs from

satisfying the typicality requirement” – citing Andra v. Blount, 772 A.2d 183

(Del. Ch. 2000), and Shapiro v. Pabst Brewing Co., No. 7339, 1985 Del. Ch.

LEXIS 496 (Del. Ch. July 30, 1985) – both of which were decided before

Celera.

      Andra has no relevance here for numerous reasons. Most importantly, as

at least one Delaware court succinctly stated, “Andra was not an acquiescence

case.” Clements v. Rogers, 790 A.2d 1222, 1239 (Del. Ch. 2001). Nor did it

involve class certification. Andra, 772 A.2d at 196.

      Shapiro, issued nearly 30 years ago, likewise did not involve class

certification. In Shapiro, minority shareholders claimed that appraisal was not

an available remedy at a time when it was believed that appraisal was the

exclusive remedy for minority shareholders. Shapiro, 1985 Del. Ch. LEXIS

496, at *10. The trial court dismissed plaintiffs’ claims because plaintiff did

not allege “facts which, if true, would render the appraisal remedy inadequate.”

Id. at *12. In a subsequent decision, the Delaware Supreme Court effectively

overturned the Shapiro decision by making clear that appraisal was not an
                                  - 57 -
exclusive remedy. See Rabkin v. Philip A. Hunt Chem. Corp., 498 A.2d 1099,

1108 (Del. 1985). Therefore, a plaintiff would no longer be required to plead

why appraisal was “inadequate.” Even though it was issued more than 30 years

ago, no Delaware court has relied on or cited Shapiro for the proposition cited

by defendants.

      B.     The Trial Court Acted Within Its Discretion in
             Finding that Common Issues Predominate
      Both of defendants’ arguments concerning predominance are nothing

more than a regurgitation of their previous arguments as to the trial plan’s

treatment of their defenses.

      First, citing no Delaware law, defendants say each shareholder will need to

be examined individually about their state of mind to determine if defendants’

affirmative defenses apply. Brigham AB 44. But, as discussed above, this is not

true. See supra §III.B.1.b. Second, defendants argue that it is necessary to

individually evaluate whether each shareholder suffered damage as a result of the

merger. Brigham AB 44-45. Again, this is incorrect. See supra §III.A.1.

      C.     The Trial Court’s Numerosity Finding Was
             Sufficiently Supported
      Although defendants did not raise any issue as to the trial court’s finding

on numerosity in their first appeal, they do so here. Echoing an argument at

least one Texas court has characterized as “pure sophistry,” defendants contend

                                     - 58 -
that certification must be denied because plaintiffs have not shown the precise

number of shareholders who still held their shares at the close of the tender

offer. Brigham AB 45; Snyder Commc’ns v. Magana, 94 S.W.3d 213, 239-40

(Tex. App.–Corpus Christi 2002, pet. filed).

      The Court need not reach this issue, however, as it has been waived.

“Where error exists at the time of an initial appeal, an appellant waives its right

to complain in a subsequent appeal of the error it failed to present in the initial

appeal.” Women’s Clinic of S. Tex. v. Alonzo, No. 13-12-00537, 2013 Tex.

App. LEXIS 7263, at *4 (Tex. App.–Corpus Christi June 13, 2013, pet. denied).

      In any event, this argument fails on substantive grounds for two reasons.

First, defendants’ challenge is predicated on the incorrect assertion that the

class is overbroad because it includes shareholders who sold their shares prior

to the completion of the merger. As explained above, so long as shareholders

held stock at the time of the announcement, they are properly included within

the class. See supra §II.

      Second, even if certification was proper only as to shareholders who held

their shares as of the close of the tender offer, the numerosity prerequisite

would still be satisfied. The numerosity requirement, in particular, “is not

based on numbers alone.” Methodist Hosps. of Dallas v. Tall, 972 S.W.2d 894,

898 (Tex. App.–Corpus Christi 1998, no pet.). Rather, the test is whether
                                - 59 -
joinder of all members is practicable in view of the size of the class and

includes such factors as judicial economy, the nature of the action, geographical

location of class members, and the likelihood that class members would be

unable to prosecute individual lawsuits. Rainbow Group, Ltd. v. Johnson, 990
S.W.2d 351, 357 (Tex. App.–Austin 1999, pet dism’d w.o.j.). Defendants do

not challenge any of these factors, conceding that they are met.

      As to the size of the class, there is sufficient evidence to support a

finding that there are enough class members to render joinder impracticable.

As defendants acknowledge, there were over one hundred million shares of

Brigham stock issued and outstanding at the time of the announcement. CR

130; CR 459 (117,318,932 shares outstanding prior to the acquisition). Even if

a large percentage of shareholders disposed of their shares before the close of

the tender offer, which is unlikely given the short, one-and-a-half month tender

offer period, there would still be thousands of shareholders within the class.

This is easily enough to satisfy numerosity. Chevron U.S.A., Inc. v. Kennedy,

808 S.W.2d 159, 161-62 (Tex. App.-El Paso 1991, writ dism’d w.o.j.) (finding

no error in certification of a class comprised of 20 identifiable members).

                                     - 60 -
      D.     The Trial Court Acted Within Its Discretion in
             Finding that Plaintiffs Will Fairly and Adequately
             Protect the Interests of the Class

      Defendants’ adequacy challenge rests on arguments made in the Statoil

Appellants’ brief. Brigham AB 46-47. In its brief, Statoil offers a novel and

unprecedented perspective on class certification, contending that plaintiffs are

inadequate class representatives, but only as to the aiding-and-abetting claim

against Statoil. It makes no argument as to plaintiffs’ adequacy as to the

underlying claim for breach of fiduciary duty against Brigham and the

individual defendants.

      Yet Statoil cites not a single case – in Texas or elsewhere – in which a

court has found a plaintiff to be an adequate representative for purposes of one

claim, but inadequate for purposes of another. There is none. In Texas, courts

do not evaluate adequacy on a claim-by-claim (or defendant-by-defendant)

basis. And indeed, the Class plaintiffs seek to represent here was not defined in

this manner. Instead, adequacy is determined by evaluating a plaintiff’s ability

to fairly and adequately protect the interests of the entire class – here, the

former shareholders of Brigham.

      To establish his or her adequacy, a plaintiff must only demonstrate that he

or she is familiar with the “basic issues” of the case and actively involved in the

litigation. Here, as discussed below, the record – which includes affidavits,
                                      - 61 -
nearly 30 hours deposition testimony and live testimony from the plaintiffs at the

class certification hearing – contains ample evidence supporting the trial court’s

findings concerning plaintiffs’ adequacy. Going well beyond what is necessary

to qualify as a class representative, plaintiffs established that they conducted

independent investigations both before and after the case was filed; initiated the

litigation because they were “surprised,” “befuddled” and “upset” about the

merger; have reviewed key pleadings, depositions and other materials produced

by defendants and third parties in litigation; have assisted and directed counsel

throughout the litigation; and have participated in discovery and attended

important hearings. Several plaintiffs have done even more. As such, they are

familiar with the key facts and issues supporting their claims – the terms, timing

and structure of the merger, Brigham and its operations, Brigham’s directors and

executives, the buyer (Statoil), the scope of the class, and the duties upon which

their claims are based, among other things.          Quite clearly, plaintiffs are

committed to protecting the interests of class members, and Statoil’s plea for

reversal does nothing to refute the trial court’s findings in this regard.

      To the extent it is necessary for plaintiffs to be familiar with Statoil,

again, there is ample evidence in the record to support a finding that they are.

In addition to the testimony described above, plaintiffs testified that they are

familiar through their research with Statoil and its operations, its assets, and its
                                     - 62 -
role in the buyout of Brigham. And, contrary to Statoil’s contention, plaintiffs

understood that Statoil is a defendant and explained the actions of Statoil that

led to the suit. Statoil’s suggestion that this is a “lawyer-driven” litigation –

and that the trial court qualified plaintiffs as class representatives without any

serious vetting of their qualifications – is completely baseless.

              1.     Adequacy Findings Are Entitled to Substantial
                     Deference

       Statoil faces a tall task in seeking reversal on adequacy grounds.

“Adequacy of representation is a question of fact” and must be determined based

on the individual circumstances of each case. Farmers, 125 S.W.3d at 66.

Because adequacy is a fact question left to the discretion of the trial court, “the

trial court does not abuse its discretion in finding adequacy if there is evidence to

support the finding.” Id. at 66; Garcia v. Walker, No. 04-05-00343-CV, 2006

Tex. App. LEXIS 1409, at *5-*6 (Tex. App.–San Antonio Feb. 22, 2006, no pet.)

(“Under an abuse of discretion standard, we defer to a trial court’s rulings when

discretionary matters depend on the resolution of conflicting facts.”).

       In conducting appellate review, it also makes a difference how the named

plaintiffs demonstrated their adequacy to the trial court. The deference to the

trial court’s findings is heightened where, as here, a class representative

testifies live at an evidentiary hearing, enabling the trial court to assess the

                                       - 63 -
person’s credibility and demeanor. “A trial court has discretion to rule on class

certification issues, and some of its determinations – like those based on its

assessment of the credibility of witnesses, for example – must be given the

benefit of the doubt.” Henry Schein Inc. v. Stromboe, 102 S.W.3d 675, 691

(Tex. 2002); Farmers, 125 S.W.3d at 68 (“the trial court is in the best position

to weigh the credibility of Leonard and Sawyer as well as to determine the

ability and integrity of class counsel to represent the entire class”).

      Notably, even if defendants could meet their burden, to obtain reversal

defendants would need to show that there was no factual basis for the trial

court’s findings for all seven plaintiffs. While the presence of multiple class

representatives helps to ensure that the class claims are vigorously prosecuted,

Tex. R. Civ. P. 42 does not require more than one representative. A single

representative is sufficient to support a class certification order.

             2.     Statoil Concedes that Adequacy Is Met by Not
                    Challenging the Vast Majority of the Factors
                    Relevant to the Adequacy Determination

      To appreciate how narrow Statoil’s adequacy challenge is, it is necessary

to understand the framework under which a trial court determines whether a

plaintiff should be qualified as a class representative.

      There are two components to the adequacy determination. First, it must

appear that the representatives, through their attorneys, will vigorously
                                      - 64 -
prosecute the class claims. Forsyth v. Lake LBJ Inv. Corp., 903 S.W.2d 146,

150 (Tex. App.–Austin 1995, writ dism’d w.o.j.). Factors affecting this

determination include the following: (1) counsel’s adequacy; (2) the plaintiff’s

personal integrity; (3) the representative’s familiarity with the litigation and his

belief in the grievance’s legitimacy; (4) whether the class is unmanageable,

based on geographical limitations; and (5) whether the plaintiff can afford to

finance the class action. Id. Second, there must be an absence of antagonism

or conflict between the representative’s interests and those of the class

members. Adams v. Reagan, 791 S.W.2d 284, 291 (Tex. App.–Fort Worth

1990, no writ).

      Of those two components, courts focus especially on the second

component – intra-class conflicts of interest.        “The primary issue to be

considered is whether conflict or any antagonism exists between the interests of

the [named plaintiffs] and those of the remainder of the class. However, “the

conflict must be fundamental and go to the heart of the litigation.” Canyon Lake

Island Prop. Owners Ass’n v. Sterling/Suggs L.P., No. 03-14-00208-CV, 2015

Tex. App. LEXIS 5739, at *19 (Tex. App.–Austin June 5, 2015, no pet. h.).

Here, Statoil does not challenge the trial court’s finding that the plaintiffs are

free of conflicts that would prevent them from effectively representing other

shareholders.
                                       - 65 -
       Nor does Statoil challenge the trial court’s findings on four of the five

factors relevant to the determination as to whether a class member will

vigorously pursue the claims. Forsyth, 903 S.W.2d at 150. This alone is fatal

to Statoil’s appeal, as a plaintiff can qualify as a class representative even if one

factor weighs against a finding of adequacy. See Hi-Lo Auto Supply L.P. v.

Beresky, 986 S.W.2d 382, 388-89 (Tex. App.–Beaumont 1999, writ mand.

denied) (upholding the trial court’s adequacy finding even though the court

assumed “[defendant] proved it [was] being targeted by unscrupulous plaintiffs’

lawyers” and the plaintiff lacked personal integrity).

              3.     The Trial Court’s Findings Regarding
                     Plaintiffs’ Familiarity with the Litigation Are
                     Amply Supported by the Record

       Even as to the one factor it does challenge – familiarity with the

litigation, Statoil cannot meet its heavy burden of establishing that there was no

factual basis for the trial court’s finding. Statoil AB 9-17.

       Although Statoil may prefer a higher standard, plaintiffs must only

demonstrate that they are familiar with the “basic issues” of the case and are

actively involved in the litigation. Farmers, 125 S.W.3d at 67 (“A class

representative should be familiar with the basic issues, including composition

of the class and damages sought.”); Pate v. Elloway, No. 01-03-00187-CV,

2003 Tex. App. LEXIS 9681, at *16 (Tex. App.–Houston [1st Dist.] Nov. 13,
                                       - 66 -
20013, pet. denied) (same). Class representatives are “not required to fully

comprehend the legal terms and pleadings.” King v. City of Austin, No. 03-03-

00173-CV, 2004 Tex. App. LEXIS 2623, at *13 (Tex. App.–Austin Mar. 25,

2004, no pet.).

      As in Pate, 2003 Tex. App. LEXIS 9681, which involved breach of

fiduciary duty claims stemming from the Shell-Pennzoil merger, the named

plaintiffs here have “demonstrated familiarity with the basic issues in the case.”

Id. at *13-*19. They initiated the litigation because they were upset with the

merger price; sought and retained counsel to investigate and pursue their

claims; have reviewed the key pleadings; conducted independent investigations

both before and after the case was filed; have assisted and directed counsel

throughout the litigation; have participated in discovery, including sitting for

deposition, and are willing to participate at trial; and understand that they have

a responsibility to ensure that class members are treated fairly. This is more

than enough to satisfy adequacy.

      Statoil does its best to ignore much of the named plaintiffs’ testimony. In

fact, outside of a single snippet from each of the plaintiffs’ depositions, Statoil

does not cite or discuss any of the over 1,000 pages of plaintiffs’ testimony. Nor

does Statoil discuss the many hours of plaintiffs’ live testimony before the trial

                                      - 67 -
court during the class certification proceedings.7 Statoil’s one-sided approach to

the evidentiary record flouts a fundamental tenet of appellate procedure: “[t]he

appellate court reviews the entire record” – not isolated snippets – “to determine

if the trial court abused its discretion in [granting] certification.” Forsyth, 903
S.W.2d at 149. When the entire record is reviewed, it is plain that there was

ample support for the trial court’s finding that plaintiffs are familiar with the facts

and issues of the case, including the facts supporting their aiding-and-abetting

claim against Statoil, and are actively involved in the litigation.

                       a.      Howard Weissberg

       Mr. Weissberg established that he has taken an active role in and is

familiar with the litigation. Id. at 150.

       Mr. Weissberg, like three other class representatives (Messrs. Fioravanti,

Whalen and Schwimmer) traveled hundreds of miles to personally attend and

testify at the class certification hearing. CR 1627-80. His live testimony allowed

the court to look him in the eye and judge for itself whether he could fairly

7
        The extensive process by which the trial court vetted the class representatives
distinguishes this case from Statoil’s primary authority, In re Kosmos Energy Ltd. Sec. Litig.,
299 F.R.D. 133 (N.D. Tex. 2014). In Kosmos, the “sole piece of evidence” in support of
adequacy was a declaration which contained “no detail.” Id. at 146-47. Here, in contrast,
plaintiffs offered, in addition to affidavits, extensive deposition and hearing testimony to
establish their adequacy. Also unlike here, Kosmos involved a federal securities claim
brought under the PSLRA, which “raised the adequacy threshold.” Id. at 140.

                                            - 68 -
represent the class. Mr. Weissberg also expressed a willingness to appear at trial.

CR 979.

      Before purchasing Brigham stock, Mr. Weissberg investigated the

Company through its stock price charts and earnings records, as well as

numerous articles about the Company. CR 1629, 1632. Mr. Weissberg even

performed his own economic valuation of Brigham based on the information he

obtained through his independent investigation. CR 1643.

      Mr. Weissberg became involved in the case after seeing the public

announcement of the acquisition by Statoil. CR 1631. After seeing that

Brigham shareholders would only receive $36.50 per share, he contacted a law

firm. CR 1633. “[A]s soon as I saw the announcement, I felt that there was

something wrong, that I was not going to get my long-term benefits from this

deal.” CR 1631.

      Since then, Mr. Weissberg has reviewed the pleadings, including

verifying the initial petition and reviewing the amended petition. CR 978. He

reviewed deposition transcripts and key documents produced by defendants

during the expedited discovery process. Id. Mr. Weissberg also read the

lengthy Proxy Statement filed by Brigham with the Securities and Exchange

Commission. 3SCR 406-08. He is familiar with the amount of money that Ben

Brigham and the other individual defendants made in connection with the deal.
                                    - 69 -
3SCR 383; CR 2036; CR 2042-43 (identifying David Brigham and Harold

Carter and explaining what actions Mr. Carter failed to take).

      He has also read the depositions of two Brigham employees taken in this

action. 3SCR 399. To bolster his independent personal knowledge, Mr.

Weissberg has reviewed between six and 12 detailed memoranda provided by

his counsel, which described the claims, the status of the litigation, and his role

as a class representative. 3SCR 386-87, 390. In addition, he has actively

participated in discovery, sitting for deposition and providing responses to

defendants’ special interrogatories. CR 1645, 2047.

       Mr. Weissberg also testified that he closely monitors his attorneys,

staying in touch with them as a “regular routine.” 3SCR 398; CR 1634-38. He

speaks with his attorneys “[o]n a regular basis. Sometimes once, twice a

week.” CR 1638; 3SCR 398 (testifying at his deposition that he communicates

with his attorneys “[q]uite frequently”). In the first stage of the litigation, when

plaintiffs moved for injunctive relief, Mr. Weissberg advised his attorneys

regarding the motion for preliminary injunction. CR 978. Further, for months

before the class certification hearing, Mr. Weissberg participated in regular

conference calls with class counsel and the other class representatives, during

which they discussed plaintiffs’ legal theories and experts to potentially be

retained. CR 1637-38. Mr. Weissberg also demonstrated his familiarity with
                                - 70 -
Statoil, explaining that he was familiar with Statoil’s headquarters in Norway

and its operations in the United States. CR 2040; 3SCR 30. He knew that

Fargo was the legal entity Statoil created to absorb Brigham in the merger. CR

2040.8

       Statoil suggests that Mr. Weissberg did not understand that he was suing

Statoil, but omits his testimony – provided earlier in the deposition – directly

to the contrary.

         Q.    Who are you suing in this lawsuit, sir?

         A.    A lot of people, Statoil, Brigham, Bud Brigham, Brigham
               Company.

CR 2041. Mr. Weissberg testified similarly at the hearing. CR 1675 (“Q. Now,

as you sit here today, do you understand that you’ve sued Statoil? A. Yes.”).

In fact, during cross examination, defendants suggested, as they do here, that

Mr. Weissberg did not understand during his deposition that he was suing

Statoil. However, Mr. Weissberg refuted this point. CR 1676 (“Q. Right. But

on the day of the deposition, you did not, right? A. I did know we sued

8
        Statoil overlooks the fact that plaintiffs’ fiduciary duty and aiding-and-abetting
claims significantly overlap and are based on the same underlying events. Thus, to the
extent plaintiffs demonstrate knowledge of the facts supporting the fiduciary duty claim,
plaintiffs likewise demonstrate knowledge of the facts supporting the aiding-and-abetting
claim. Stewart v. Wilmington Tr. SP Servs., 112 A.3d 271, 319 n.225 (Del. Ch. 2015)
(“because of the significant overlap in their respective elements, much of the evidence for
proving an aiding and abetting claim already would be coming in to prove the breach of
fiduciary duty claim under the fiduciary duty carve-out to in pari delicto”).

                                          - 71 -
Statoil.”). Mr. Weissberg then explained he sued Statoil because it is the

company that bought Brigham, that Statoil is now responsible for Brigham, and

that Brigham is no longer in business. CR 1679-80.

      At most, Statoil has cited conflicting testimony about Mr. Weissberg’s

knowledge of Statoil. But that is not a basis for reversal. Garcia, 2006 Tex.

App. LEXIS 1409, at *5-*6 (“Under an abuse of discretion standard, we defer

to a trial court’s rulings when discretionary matters depend on the resolution of

conflicting facts.”). Because there was ample evidence to support the trial

court’s finding that Mr. Weissberg was familiar with the litigation, including

the claims against Statoil, the trial court did not abuse its discretion. Farmers,
125 S.W.3d at 66.

                    b.     Walter Schwimmer

      Like Mr. Weissberg, Dr. Schwimmer sat for deposition and testified live

at the class certification hearing. CR 1681-1716. Dr. Schwimmer traveled

from Los Angeles to attend the class certification hearing. CR 1681.

      Dr. Schwimmer, a retired physician, was deeply familiar with Brigham

through his personal research. He investigated Brigham before purchasing any

stock in the Company, through his annual subscriptions to investment letters,

articles available on the internet, and various news reports, including a Forbes

magazine article. CR 1684; 3SCR 339-40. Upon learning of the deal, he was
                                      - 72 -
“surprised” and called attorneys to inquire further about a potential lawsuit. Id.

Notably, he did not immediately file suit.          Instead, he “wanted more

information” and carefully investigated the acquisition and any potential claims

before deciding whether to file suit. CR 1687.

         Only after investigating the merger further did Dr. Schwimmer decide to

initiate a lawsuit. CR 1685-86. He did not “think [it] was right” that the

Brigham directors were making off with between $40 and $60 million as a

result of the deal, and that “there was a breach and it should definitely be

acknowledged.” CR 1686-87. He also “felt that the price [shareholders] got

for the shares was not adequate. And that the board, which is supposed to

represent all of the share owners and not just themselves, did something that

was unfair to the public share owners.” CR 1695. When asked what he was

trying to achieve through the lawsuit, Dr. Schwimmer testified that “I’d like to

see a monetary value of what the true value of what the company was being

made to all the former owners.” Id.

         After filing suit, he has continued to conduct his own investigation. He

receives “an ongoing service” of publications which he reviews on a monthly

basis.    He read several analyst reports and articles about the Brigham

acquisition and provided them to counsel. 3SCR 339-40, 344; CR 1686-87. As

part of his independent research, Dr. Schwimmer also investigated Statoil and
                                     - 73 -
its involvement in the development of oil reserves in the Bakken, the same area

in which Brigham operated. 3SCR 344.

      Dr. Schwimmer also stays abreast of the status of the litigation in

numerous ways. He reads the memoranda provided by his attorneys (3SCR

345; CR 1688); participates in regular conference calls with the other class

representatives, who owned Brigham stock (CR 1726-28); and maintains

regular contact with his attorneys, who had “spent a lot, a lot, a lot of time” on

this matter. CR 2006. Further, Dr. Schwimmer appeared for deposition and

provided discovery responses based upon his personal knowledge. CR 1693.

Dr. Schwimmer expressed a willingness to be involved through a trial in this

case. CR 661.

      Additionally, Dr. Schwimmer received and reviewed drafts of various

pleadings in the litigation, including the petition before it was filed. CR 1701,

1709. Dr. Schwimmer also confirmed that he had “received drafts of the

various pleadings and amended pleadings in the litigation, as well as reviewed

discovery requests and responses and correspondence from [his] counsel

regarding the litigation.” CR 660-61; 3SCR 290-92.

      Contrary to Statoil’s assertion, Dr. Schwimmer never testified that he did

not understand he was suing Statoil. At his deposition, defense counsel asked

Dr. Schwimmer directly:
                                      - 74 -
      Q.     Who are you suing?

      A.     I’ll tell you from my own memory. We’re suing the
             management, the board of directors of Brigham. We’re
             also suing Statoil and . . . .

3SCR 351.

      Nor, as Statoil suggests, was Dr. Schwimmer unable to explain why he

was suing Statoil. Statoil AB 12, 14. He testified, “I have knowledge as to

why we are suing Statoil.” 3SCR 362. When asked at deposition how

shareholders’ interests were not taken into consideration, he explained that

Brigham and Statoil had made a “handshake deal” for $36.50 which was not

disclosed to the rest of the Board. 3SCR 352-53. He further explained that

Statoil had offered Brigham and its directors a “special deal” – unavailable

from other potential buyers – that resulted in millions of dollars in payments to

the defendants and lucrative job positions with Statoil after the deal closed.

3SCR 353.

      Nevertheless, Statoil maintains that the trial court erred in finding Dr.

Schwimmer adequate because he relied, in part, on his attorneys when

determining whether to sue Statoil. But there is nothing inadequate about a

class representative who consults their attorneys before deciding to bring a

claim. In fact, this is exactly what a plaintiff should do to ensure the class is

protected. Pate, 2003 Tex. App. LEXIS 9681, at *18 (plaintiffs stayed
                                     - 75 -
informed by reading articles relating to the merger and stayed in regular contact

with his attorneys). Indeed, although it is not the case here, Texas courts have

upheld the appointment of class representatives even where most, if not all, of a

plaintiffs’ knowledge originated from the attorney. Weatherly v. Deloitte &

Touche, 905 S.W.2d 642, 654 (Tex. App.–Houston [14th Dist.] 1995, writ

dism’d w.o.j.) (upholding class certification where the class representatives

“filed th[e] suit only after learning about their claims from their attorney”);

Adams, 791 S.W.2d at 291 (the trial court did not abuse its discretion in

certifying the class, although the class representatives were admittedly “hand-

picked” or selected as representatives).

       Of course, Statoil offers no support for the proposition that plaintiffs’

counsel should not be providing information to their clients or advising them as

to the viability of certain legal claims (because none exists). This is especially

true in a complex case such as this, where virtually all of the events supporting

the claim took place behind closed doors and were never made public.

       In sum, Dr. Schwimmer established his ability to vigorously represent

the class, and the trial court’s factual findings in this regard are well supported.

Forsyth, 903 S.W.2d at 150.

                                       - 76 -
                      c.   Jeffery Whalen

      The record is clear that Mr. Whalen is actively involved in and

knowledgeable about the litigation. Mr. Whalen sat for deposition and testified

live at the class certification hearing after traveling over a thousand miles from

California. CR 1717-50.

      Mr. Whalen, a retired pharmacist, purchased 1,200 shares of Brigham

stock in 2010 and 2011, intending to hold the stock as a long-term investor.

CR 1719. He purchased the stock after investigating the Company through the

North Dakota Industrial Commission’s oil and gas website and after

“monitoring [the oil production of] Brigham and some other companies.”

CR 1718.

      Like the other named plaintiffs, Mr. Whalen became upset when he

learned of the deal through the news online, particularly the price accepted by

the Brigham Board. In his own words, Mr. Whalen explained he “was

befuddled that it would be sold and at the share price it was sold for.”

CR 1719. “When I saw the offer I was upset,” Mr. Whalen testified. 3SCR

422. After consulting various internet and news articles concerning the deal,

Mr. Whalen contacted attorneys and indicated that he wanted to be part of a

lawsuit. CR 1720-21. He also determined that wanted to serve as a class

representative. Id.
                                      - 77 -
      Mr. Whalen explained that he actively monitors his attorneys. He speaks

with his attorneys, through emails, conference calls and face-to-face meetings,

“on an ongoing basis, I can say twice a week.” CR 1725-30; CR 657, 2028.

He participates in conference calls with class counsel and the other plaintiffs

about the status of the lawsuit, and the retention of experts. Id. He has also

participated in discovery by gathering documents and helping prepare

interrogatory responses to address defendants’ discovery requests. CR 657. He

has reviewed and verified the pleadings, including the initial petition and the

amended petition. Id. And – in addition to testifying at a deposition and at the

class certification hearing – he would participate in settlement negotiations and

would travel to Texas to attend trial. 3SCR 423.

      At deposition, Mr. Whalen explained who Ben Brigham, David Brigham,

Stephen Reynolds, Hobart Smith and Statoil were, and that each was a named

defendant.   3SCR 432-34.       In addition, Mr. Whalen had independently

reviewed information about Brigham online, such as news, and had visited

Brigham’s website. 3SCR 431. Mr. Whalen had also reviewed at least seven

memoranda from his attorneys. 3SCR 415-16.

      It is simply not true, as Statoil contends, that Mr. Whalen does not know

he was suing Statoil. Compare Statoil AB 12-13 with 3SCR 434 (“Q. Are you

suing Statoil, as well? A. Yes.”). Although he indicated that some of the
                                   - 78 -
reasons he was suing Statoil were subject to confidential discussions with his

attorneys, Mr. Whalen went on to explain at deposition that he was suing

Statoil and provided several reasons why.        3SCR 434 (“Q. Other than

conversations with your lawyers, do you know why you are suing Statoil and

Fargo Acquisition? A. Based upon my review of activity and the assets of the

company, and the stock price, that’s one reason why I would sue Brigham

Exploration and Statoil.”); 3SCR 422 (explaining that he was “dissatisfied with

the amount” offered by Statoil); 3SCR 434 (“[Brigham] has been undervalued

and the stockholders are suffering from that financially.”).

      In short, Mr. Whalen amply demonstrated the level of involvement with

the case that the law requires. Forsyth, 903 S.W.2d at 150.

                   d.     Robert Fioravanti

      Mr. Fioravanti, a retired supervisor at Monsanto, is from Massachusetts.

CR 1752-53. He also sat for a deposition and testified live at the class

certification hearing. CR 1752-1785. Mr. Fioravanti expressed a willingness to

appear at trial. 3SCR 220.

      Mr. Fioravanti learned of the merger when he received a received a call

from his broker notifying him that the Brigham Board had agreed to sell the

Company to Statoil. As with the other plaintiffs, he was disappointed at the

sale price of $36.50 per share because Brigham stock had hit $40.00 per share
                                    - 79 -
the week prior to the announcement. CR 1755-56. After learning that several

lawsuits had been filed against Brigham, he contacted plaintiffs’ attorneys,

telling them that he “agreed with what they were doing, because [he] believe[d]

that Statoil should have paid more money for Brigham Exploration.” CR 1757.

      Before filing the lawsuit, Mr. Fioravanti conducted online research

concerning numerous oil and gas companies, including Brigham. 3SCR 1754-

55; id. at 1757. He conducted an investigation of Statoil and, through that

investigation, discovered that Statoil was producing 40,000 barrels of oil per

day. CR 1754-55. In addition, he reviewed articles about the acquisition of

Brigham by Statoil (3SCR 192-93); visited the library to read articles about

Brigham in financial magazines such as Forbes, Fortune, Smart Money and

Kiplinger (id.); reviewed the depositions of the other named plaintiffs (3SCR

204); and reviewed the merger agreement, as well as the financial opinion

provided by Jefferies and Co. to the Brigham Board when the merger was

approved. 3SCR 204, 214.

      Mr. Fioravanti stayed apprised of the merger through the financial press

and has reviewed everything sent to him by his attorneys. CR 1758, 1760.

Since the case was filed, Mr. Fioravanti has had “many” discussions with his

attorneys, during which his views had been “accepted and responded to.”

CR 1761-62. Those discussions included numerous conference calls involving
                                  - 80 -
his attorneys and the other class representatives. CR 1760-61. In that regard,

Mr. Fioravanti testified that he communicated roughly twice per week with

attorneys about the lawsuit. 3SCR 193-94. He has also communicated with

other Brigham shareholders. Id.

      Like the other plaintiffs, Mr. Fioravanti had reviewed the pleadings and

other legal papers filed in this matter. 3SCR 204; CR 672. In addition to

reviewing the pleadings, as discussed above, he has also reviewed the merger

agreement (3SCR 214); the fairness opinion offered by Jefferies to the Brigham

Board of Directors regarding the value of the Company (3SCR 203-04);

numerous memoranda and other documents provided to him by his attorneys

(3SCR 191-92); and the interrogatories propounded by defendants to the

plaintiffs (CR 1765). He made clear at the class certification hearing that he

reads everything from the litigation that is sent to him. CR 1760.

      Mr. Fioravanti’s extensive knowledge of the case extends to Statoil. He

fully understood that he was suing Statoil. 3SCR 205 (“Q. Who are you suing?

A. Brigham Exploration. Q. Who else? A. Statoil.”). He had specifically

performed research on Statoil and understood details about the company such

as the number of barrels of oil Statoil was producing per day and the number of

rail cars being used to transport oil in the Bakken. 3SCR 192, 201. He also

clearly explained at deposition why he was suing Statoil, because “they didn’t
                                    - 81 -
pay a fair value of [Brigham’s] worth.” 3SCR 205. Indeed, in the same

breadth that Statoil says “the named plaintiffs’ deposition testimony

demonstrated conclusively that they had no knowledge to support an aiding-

and-abetting claim,” Statoil cites testimony in which Mr. Fioravanti explains

why he was suing Statoil. Compare Statoil AB12 with Statoil AB 14.

       In short, Mr. Fioravanti’s testimony makes clear that he will fairly and

adequately represent the class, as the trial court found. Forsyth, 903 S.W.2d at

150.

                    e.    Raymond Boytim

       Mr. Boytim, a resident of Texas, held 23,500 shares of Brigham common

stock worth over $850,000 at the time of the tender offer and 19,000 shares at

the time the acquisition closed. CR 666; 3SCR 105-06.

       As with the other plaintiffs, Mr. Boytim has been informed about the

case from day one. Mr. Boytim testified that he has remained informed about

the case by reviewing transcripts from the depositions of Brigham’s former

directors and executives, as well as by doing his own independent investigation

after the merger was announced. 3SCR 102-21. As an investor with significant

holdings in Brigham, it should come as no surprise that Mr. Boytim also

conducted an independent investigation of Brigham before the merger. 3SCR

105-07.
                                     - 82 -
      Not surprisingly, at deposition, Mr. Boytim had no problem identifying

many of the defendants and their role at Brigham or Statoil. 3SCR 121-22. He

knew so much about Brigham that he also conducted and prepared his own

valuation analysis of the Company. 3SCR 107.

      Because Mr. Boytim understands his fiduciary duties to the class, he has

also met with his attorneys on several occasions (3SCR 108); he has been

regularly communicating with his attorneys through email and by telephone

(3SCR 119); he has fully participated in discovery, including responding to

interrogatories and document requests propounded by defendants (3SCR 123)

and preparing for and submitted to several hours of deposition testimony.

3SCR 104. Mr. Boytim testified that he had reviewed drafts of the pleadings.

3SCR 128. In his affidavit in support of the motion for class certification, he

stated that he has reviewed the significant pleadings, including the petition.

CR 964.

      He testified that he understands that he is suing Brigham, Statoil and the

parties that made the decision to sell the Company. 3SCR 115. Like the other

plaintiffs, he was upset at the merger price, which he felt was too low. 3SCR

127. He was upset with the way the deal was consummated, testifying that the

Board of Directors had “ramrod[ded]” the merger through. 3SCR 117. He also

                                    - 83 -
provided a detailed explanation of the actions of Statoil which had led him to

file suit. 3SCR 117-18.

      As is evident from the record, Mr. Boytim is familiar with the claims and

will vigorously represent the class. Forsyth, 903 S.W.2d at 150.

                    f.    Myrna Goodman

      There is also no abuse of discretion regarding trial court’s adequacy

findings regarding Myrna Goodman. Throughout the action Ms. Goodman has

“actively monitored the litigation and overseen counsel and will continue to do

so.” CR 664. She has done so through consistent contact with her attorneys, as

she testified that she has had approximately 20 conversations, in person and by

email. 3SCR 253-54. She has likewise reviewed several memoranda from her

attorneys regarding her duties as a class representative. Id. at 255.

      Ms. Goodman has also reviewed documents from the case, including

“key pleadings, such as the Complaint and Preliminary Injunction motion,” as

well as any documents and deposition testimony from the case. 3SCR 254-55;

CR 664. Understanding and appreciating her fiduciary duties to the class, she

has participated in discovery and would travel to Austin for trial. 3SCR 260;

CR 664.

      At deposition, Ms. Goodman testified that she sued Brigham and the

remaining principals of Brigham, including Ben Brigham and David Brigham.
                                     - 84 -
3SCR 247. When asked about “the purpose of the lawsuit,” she explained that

“the shareholders want to get more income [from] the stock” – which is entirely

consistent with the objectives of the other named plaintiffs and in the interest of

the shareholder class. 3SCR 246.

      Like the other named plaintiffs, Ms. Goodman demonstrated her

commitment to vigorously represent the class. Forsyth, 903 S.W.2d at 150.

                    g.     Hugh Duncan

      Mr. Duncan, a retired attorney, also established that he is familiar with

the litigation and has been an active class representative. Mr. Duncan sued

because he was “sorely disappointed in the result that was obtained in the

merger agreement with Statoil. [He] thought that the agreed upon price was

wholly inadequate.” CR 517.

      Mr. Duncan is yet another plaintiff who was familiar with Brigham prior

to the lawsuit. He had conducted an investigation of Brigham in connection

with his initial investment. 3SCR 163. After the merger was announced, he

remained informed by reviewing articles relating to the merger. 3SCR 159-60,

165. He has also obtained and provided to class counsel information about the

expected productivity of Brigham’s wells in North Dakota. 3SCR 146. Mr.

Duncan testified that Brigham’s shareholders were not informed of the

negotiations between Ben Brigham and Statoil and the process leading up to the
                                      - 85 -
merger. 3SCR 163-64. He testified that he understood Brigham’s accelerated

drilling plans. 3SCR 172-73. He testified about his familiarity with the process

leading up to the sale of Brigham to Statoil. 3SCR 158-59, 161. Although a

class representative is not required to be familiar with legal terms (see King,

2004 Tex. App. LEXIS 2623, at *13), Mr. Duncan also explained the duties of

loyalty and due care upon which plaintiffs’ claims are based. 3SCR 173.

      In addition, after the lawsuit was filed, Mr. Duncan received significant

pleadings and related materials, including the Complaint, the motion for

preliminary injunction, the transcript from the hearing on the motion for

preliminary injunction, Court orders and correspondence from counsel

regarding Statoil’s tender offer, and Brigham’s Proxy Statement. CR 675. He

has also received numerous documents produced by defendants during the

course of this litigation, including presentations to the Brigham Board by its

financial advisor before the merger. CR 675-76. He also received the

deposition of one of the key witnesses in the case. Id.

      Mr. Duncan clearly established that he has been actively pursuing the

litigation. He testified that he communicated regularly with his attorneys

regarding the status of the litigation. 3SCR 108, 119, 171. He testified that he

had reviewed defendants’ interrogatories and provided all information available

to him. 3SCR 176. He testified that he had provided all of the document he
                                  - 86 -
had collected in the process of his evaluation of Brigham. 3SCR 142. Mr.

Duncan had also met with his attorneys at least four times. 3SCR 147. And

Mr. Duncan, like all of the plaintiffs, sat for several hours of deposition. Id. As

he explained, “I am trying to keep abreast of my responsibilities as a

shareholder and a possible class representative, felt an obligation to keep up

with the litigation, you know. And my lawyers have been very good about

keeping me informed.” 3SCR 146. He testified that he would attend trial.

3SCR 178.

       With respect to Statoil, Mr. Duncan testified that he reviewed the merger

agreement between Brigham and Statoil, and was familiar with Statoil. 3SCR

142, 145, 165. As the testimony cited by defendant shows, Mr. Duncan fully

understood that he was suing Statoil.                When asked about this issue at

deposition, Mr. Duncan referred to the pleadings and said, “I believe we

are . . . .” 3SCR 178.

       In short, Mr. Duncan is well suited to represent the class, and he

established as much to the trial court. Forsyth, 903 S.W.2d at 150.9

9
        Statoil’s citation to City of Livonia Emps.’ Ret. Sys. v. Boeing Co., 711 F.3d 754 (7th
Cir. 2013), highlights its desperate and misguided attempt to show that this case is being
controlled by the plaintiffs’ attorneys. Boeing did not involve class certification, did not
involve the adequacy of a plaintiff and – in fact – did not even involve any of the attorneys
on this case. Rather, it dealt with the use of certain facts provided by a confidential witness
in connection with an amended complaint filed in a §10(b)(5) securities case. Id. at 759-60.

                                            - 87 -
                                     CONCLUSION

       For the foregoing reasons, plaintiffs respectfully request that this Court

affirm the trial court’s class certification order and trial plan.

DATED: November 20, 2015                   Respectfully submitted,
                                           BOULETTE GOLDEN & MARIN L.L.P.
                                           MICHAEL D. MARIN
                                           Texas Bar #00791174

                                                       /s/ Michael D. Marin
                                                      MICHAEL D. MARIN
                                           2801 Via Fortuna Drive, Suite 530
                                           Austin, TX 78746
                                           Telephone: 512/732-8900
                                           512/732-8905 (fax)
                                           Liaison Counsel
                                           ROBBINS GELLER RUDMAN
                                            & DOWD LLP
                                           SAMUEL H. RUDMAN
                                           MARK S. REICH
                                           MICHAEL G. CAPECI
                                           58 South Service Road, Suite 200
                                           Melville, NY 11747
                                           Telephone: 631/367-7100
                                           631/367-1173 (fax)
                                           ROBBINS GELLER RUDMAN
                                            & DOWD LLP
                                           RANDALL J. BARON
                                           DAVID T. WISSBROECKER
                                           STEVEN M. JODLOWSKI
                                           655 West Broadway, Suite 1900
                                           San Diego, CA 92101
                                           Telephone: 619/231-1058
                                           619/231-7423 (fax)

    Lead counsel in this case have repeatedly been recognized as the top attorneys in the field
of corporate governance litigation and have never been found to be inadequate (despite
seeking and obtaining class certification in hundreds of cases during their lengthy careers).
In addition, the record in this case speaks for itself.

                                            - 88 -
Class Counsel for Plaintiffs-Appellees
KENDALL LAW GROUP, LLP
JOE KENDALL
DANIEL HILL
JAMIE J. McKEY
3232 McKinney Avenue, Suite 700
Dallas, TX 75204
Telephone: 214/744-3000
214/744-3015 (fax)
THE BRISCOE LAW FIRM, PLLC
WILLIE C. BRISCOE
8150 N. Central Expressway, Suite 1575
Dallas, TX 75206
Telephone: 214/239-4568
281/254-7789 (fax)
DUNNAM & DUNNAM LLP
HAMILTON LINDLEY
4125 West Waco Drive (76710)
P.O. Box 8418
Waco, TX 76714-8418
Telephone: 254/753-6437
254/753-7434 (fax)
BRODSKY & SMITH, LLC
EVAN J. SMITH
MARC ACKERMAN
Two Bala Plaza, Suite 602
Bala Cynwyd, PA 19004
Telephone: 610/667-6200
610/667-9029 (fax)
LEVI & KORSINSKY, LLP
SHANE T. ROWLEY
30 Broad Street, 24th Floor
New York, NY 10004
Telephone: 212/363-7500
866/367-6510 (fax)
KOHN, SWIFT & GRAF, P.C.
DENIS F. SHEILS
One South Broad Street, Suite 2100
Philadelphia, PA 19107-3389
Telephone: 215/238-1700
215/238-1968 (fax)

- 89 -
THE WEISER LAW FIRM, P.C.
PATRICIA C. WEISER
JAMES M. FICARO
22 Cassatt Avenue
Berwyn, PA 19312
Telephone: 610/225-2677
610/408-8062 (fax)
RYAN & MANISKAS, LLP
KATHARINE M. RYAN
RICHARD A. MANISKAS
995 Old Eagle School Road, Suite 311
Wayne, PA 19087
Telephone: 484/588-5516
484/450-2582 (fax)
KELLY N. REDDELL
THE REDDELL FIRM PLLC
100 Highland Park Village, Suite 200
Dallas, Texas 75205
Telephone: 214/295-3031
Additional Counsel for Plaintiffs-
Appellees

- 90 -
                    CERTIFICATE OF COMPLIANCE

      I certify that the foregoing document contains 17,753 words, excluding

the portions excluded by Texas Rule of Appellate Procedure 9.4(i)(1). It was

prepared in Microsoft Word using 14-point typeface for body text and 12-point

typeface for footnotes. In making this certificate of compliance, I am relying

on the word count provided by the software used to prepare the document.

                                                   /s/ Michael D. Marin
                                                  MICHAEL D. MARIN

                       CERTIFICATE OF SERVICE

      I hereby certify that a true and correct copy of the foregoing document

will be electronically filed using a certified Electronic Filing Service Provider,

which will send electronic notification of such filing to the following counsel of

record on the 20th day of November, 2015, or alternatively, a copy will be sent

via U.S. Mail, to the parties listed in the attached service list.

                                                   /s/ Michael D. Marin
                                                  MICHAEL D. MARIN

                                      - 91 -
BRIGHAM EXPLORATION
Service List – 11/20/2015 (11-0184)
Page 92

COUNSEL FOR DEFENDANT(S)
Timothy R. McCormick                             Debora B. Alsup
Michael W. Stockham                              Thompson & Knight LLP
Timothy E. Hudson                                98 San Jacinto Blvd., Suite 1900
Thompson & Knight LLP                            Austin, TX 78701
1722 Routh Street, Suite 1500                     Telephone: 512/469-6100
Dallas, TX 75201-2533                             512/469-6180 (fax)
 Telephone: 214/969-1700                          Email: debora.alsup@tklaw.com;
 214/969-1751 (fax)                                      danley.cornyn@tklaw.com
 Email: timothy.mccormick@tklaw.com;
         michael.stockham@tklaw.com;
         tim.hudson@tklaw.com

Russell S. Post
Alexander Fields
Parth Gejji
Christopher R. Cowan
Beck Redden LLP
1221 McKinney Street, Suite 4500
Houston, Texas 77010
   Telephone: 713/951-3700
   713/951-3720
   Email: rpost@beckredden.com
            falexander@beckredden.com
            pgejji@beckredden.com
            ccowan@beckredden.com

                                        - 92 -
BRIGHAM EXPLORATION
Service List – 11/20/2015 (11-0184)
Page 93

COUNSEL FOR PLAINTIFF(S)
Michael D. Marin                               Evan J. Smith
Boulette Golden & Marin LLP                    Marc L. Ackerman
2801 Via Fortuna Drive, Suite 530              Brodsky & Smith, LLC
Austin, TX 78746                               Two Bala Plaza, Suite 602
   Telephone: 512/732-8900                     Bala Cynwyd, PA 19004
   512/732-8905 (fax)                             Telephone: 610/667-6200
   Email: mmarin@boulettegolden.com               610/667-9029 (fax)
                                                  Email: esmith@brodsky-smith.com;
                                                          mackerman@brodsky-
                                                          smith.com
Shane T. Rowley                                Hamilton Lindley
Levi & Korsinsky, LLP                          Dunnam & Dunnam LLP
30 Broad Street, 24th Floor                    4125 West Waco Drive (76710)
New York, NY 10004                             P.O. Box 8418
   Telephone: 212/363-7500                     Waco, TX 76714-8418
   866/367-6510 (fax)                             Telephone: 254/753-6437
   Email: srowley@zlk.com                         254/753-7434 (fax)
                                                 Email: hlindley@dunnamlaw.com

Joe Kendall                                    Denis F. Sheils
Daniel Hill                                    Kohn, Swift & Graf, P.C.
Jamie J. McKey                                 One South Broad Street
Kendall Law Group, LLP                         Suite 2100
3232 McKinney Avenue, Suite 700                Philadelphia, PA 19107-3389
Dallas, TX 75204                                  Telephone: 215/238-1700
  Telephone: 214/744-3000                         215/238-1968 (fax)
  214/744-3015 (fax)                              Email: dsheils@kohnswift.com
 Email: jkendall@kendalllawgroup.com;
        dhill@kendalllawgroup.com;
        jmckey@kendalllawgroup.com

                                      - 93 -
BRIGHAM EXPLORATION
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Page 94

Samuel H. Rudman                                Randall J. Baron
Mark S. Reich                                   David T. Wissbroecker
Michael G. Capeci                               Steven M. Jodlowski
Robbins Geller Rudman & Dowd LLP                Robbins Geller Rudman & Dowd LLP
58 South Service Road, Suite 200                655 West Broadway, Suite 1900
Melville, NY 11747                              San Diego, CA 92101
   Telephone: 631/367-7100                         Telephone: 619/231-1058
   631/367-1173 (fax)                              619/231-7423 (fax)
   Email: srudman@rgrdlaw.com;                     Email: rbaron@rgrdlaw.com;
           mreich@rgrdlaw.com;                              dwissbroecker@rgrdlaw.com;
           mcapeci@rgrdlaw.com                              sjodlowski@rgrdlaw.com

Patricia C. Weiser                              Katharine M. Ryan
James M. Ficaro                                 Richard A. Maniskas
The Weiser Law Firm, P.C.                       Ryan & Maniskas, LLP
22 Cassatt Avenue                               995 Old Eagle School Road, Suite 311
Berwyn, PA 19312                                Wayne, PA 19087
   Telephone: 610/225-2677                         Telephone: 484/588-5516
   610/408-8062 (fax)                              484/450-2582 (fax)
   Email: pw@weiserlawfirm.com;                    Email: kryan@rmclasslaw.com;
            jmf@weiserlawfirm.com                          rmaniskas@rmclasslaw.com

Kelly N. Reddell                                Willie C. Briscoe
The Reddell Firm PLLC                           The Briscoe Law Firm
100 Highland Park Village, Suite 200            8150 N. Central Expressway, Suite 1575
Dallas, Texas 75205                             Dallas, TX 75206
   Telephone: 214/295-3031                        214/239-4568
   Email: kelly@reddell-law.com                   281/254-7789(Fax)
                                                  Email:wbriscoe@thebriscoelawfirm.com

                                       - 94 -
                            No. 03-15-000248-CV
                   IN THE THIRD COURT OF APPEALS
                  THIRD JUDICIAL DISTRICT OF TEXAS
                           AUSTIN, TEXAS

       BRIGHAM EXPLORATION COMPANY, BEN M. BRIGHAM,
    DAVID T. BRIGHAM, HAROLD D. CARTER, STEPHEN C. HURLEY,
    STEPHEN P. REYNOLDS, HOBART A. SMITH, SCOTT W. TINKER,
           STATOIL ASA, AND FARGO ACQUISITION, INC.,

                                 Appellants,

                                      vs.

           RAYMOND BOYTIM, ET AL., INDIVIDUALLY
      AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,,

                                  Appellees.

     Appeal from the 261st Judicial District Court of Travis County, Texas
                     Trial Court No. D-1-GN-11-003205
                  The Honorable Lora Livingston, Presiding

                                 APPENDIX

A    Havens v. Pate, No. 2002-16085, Defendants’ Fourth          Hand-filed on
     Amended Original Answer (Harris Cnty. Dist. Ct. Aug. 19,    03/19/15 by
     2005)                                                       district clerk
                                                                 without Bates
                                                                 numbering
APPENDIX A