Constar Shareholders Obtain $23.5 Million Recovery
On December 19, 2012, the court granted final approval of the $23.5 million settlement in In re Constar International Inc. Securities Litigation, pending since September 2003 in the United States District Court for the Eastern District of Pennsylvania. Plaintiffs asserted claims arising out of a November 2002 initial public offering of Constar International stock. “This was a very hard-fought case where defendants repeatedly pressed every issue,” said Robbins Geller partner Steven W. Pepich, who worked on the case from the outset.
Defendants challenged the pleadings with both a motion to dismiss and a motion for judgment on the pleadings. After losing both motions, defendants opposed class certification with arguments similar to those rejected in their two earlier unsuccessful motions. After the district court granted class certification, defendants appealed that ruling to the United States Court of Appeals for the Third Circuit. Robbins Geller attorneys briefed and argued the appeal for plaintiffs, and obtained a complete victory for plaintiffs and the class in In re Constar International Inc. Securities Litigation, 585 F.3d 774 (3d Cir. 2009).
Even after losing on appeal, defendants continued to mount an aggressive defense, and it took another three years to resolve the case. Scores of depositions and substantial expert witness discovery were undertaken, along with pretrial motions to exclude expert testimony. Defendants’ summary judgment motions were fully briefed and pending when the case settled. “Ironically, defendants made the case much stronger by continuing to litigate every issue. As a result, a much larger recovery was obtained for shareholders,” Pepich said.
By litigating for over nine years, defendants caused the insurance carriers to pay millions of dollars in additional defense costs that might have been avoided if they had resolved the case earlier. “This litigation should be a lesson to the defense bar and insurance carriers that our firm will fight for as long as it takes to put forth the strongest possible case on the merits,” added Pepich. “These cases rarely get better for defendants as litigation progresses.”
In re Constar International Inc. Securities Litigation, No. 03-CV-05020, Final Judgment and Order of Dismissal with Prejudice (E.D. Pa. Dec. 19, 2012).