Troutman Pepper Litigation Team Prevails in Class Action Case Spanning Eight Years and Three Courts
LOS ANGELES – Troutman Pepper successfully represented Frank B. Stewart, the former chairman of Stewart Enterprises Inc. (STEI), prevailing in a class action lawsuit. The suit spanned eight years and three courts in Louisiana, filed on the heels of an announcement that STEI, once the second largest publicly traded death care company in the country, would be acquired by its largest competitor, Service Corp., Inc. (SCI).
In 2013, SCI announced its intention to acquire Stewart Enterprises for $1.4 billion. Shortly after the deal was announced, plaintiffs’ class action lawyers filed suit in the Civil District, Orleans Parish, claiming proxy violations and breaches of fiduciary duty by Mr. Stewart and other members of the STEI board. In a joint effort with allied defense counsel based in New Orleans, Troutman Pepper attorneys defeated the motion for a preliminary injunction. The stockholders approved the merger and the deal closed in 2014, following an extensive review by the Federal Trade Commission and divestiture requirements.
“The case proceeded through completion of discovery, including experts,” said Partner Pamela Palmer, who together with Partner Kevin Crisp, defended Mr. Stewart in the litigation. “Despite attempts by the plaintiffs to position Mr. Stewart as being on ‘both sides of the deal,’ the facts showed that he was not.” Palmer said. A special committee of the board negotiated the deal and Mr. Stewart, who was not a member and did not participate in the negotiation, voted for the merger at the special committee’s recommendation, even though he held a potential blocking vote.
On the eve of trial in the Civil District, Orleans Parish, the defendants moved successfully for summary judgment. The trial court mastered business judgment rule principles and rejected the unfounded claims against Mr. Stewart. The defendants triumphed again in the Fourth Circuit Court of Appeal of Louisiana, which issued a unanimous opinion affirming summary judgment in May 2021. Plaintiffs’ counsel sought a writ of review by the Supreme Court of Louisiana, which was denied unanimously on October 1, 2021.
Troutman Pepper’s Business Litigation Practice Group has a long, successful track record defending and prosecuting high-stakes commercial matters in federal, state, trial, and appellate courts throughout the United States. The firm is experienced in litigating complex multi-district cases, class actions, and single-case litigations.
About Troutman Pepper
Troutman Pepper is a national law firm with more than 1,200 attorneys strategically located in 23 U.S. cities. The firm’s litigation, transactional, and regulatory practices advise a
diverse client base, from start-ups to multinational enterprises. The firm provides sophisticated legal solutions to clients’ most pressing business challenges, with depth across industry sectors, including construction, energy,
finance, health sciences, insurance, private equity, real estate, and technology, among others. Learn more at troutman.com.