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Article

Abstract

This Article examines the influence of civil procedure on the legal framework that supports securities markets in the United States and in Germany. It does so by way of comparing parallel shareholder actions against Deutsche Telekom for securities disclosure violations arising out of the same facts and allegations-the first set of actions filed in federal district court in Manhattan, the second filed in district court in Frankfurt, Germany. Deutsche Telekom was accused in both actions of misrepresenting the value of its real estate holdings in its financial disclosures and for failing to disclose negotiations for the acquisition of the U.S. company VoiceStream in its July 2000 offering. But the cases proceeded very differently and produced dramatically different outcomes. Within five years, and after full discovery, the U.S. class action plaintiffs negotiated a $120 million settlement with the Deutsche Telekom defendants. Meanwhile, the parallel claims by German shareholders, the first of which were filed in 2001, were ultimately dismissed by the German courts in 2012, despite Germany's 2004 adoption of a new and unprecedented aggregate litigation mechanism (dubbed "the Deutsche Telekom law") to afford thousands of complaining German shareholders a reasonable mechanism for pursuing a just and speedier resolution of their claims. Finally, in 2014, the German Supreme Court (Bundesgerichtshof) ruled in favor ofplaintiffs on a separate claim, but, to date, German shareholders still have not received any monetary damages. Building on prior research (with lrica Gorga) about the importance of litigation discovery for U.S. corporate and securities laws, this Article examines how German civil procedure gets in the way of private enforcement

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