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On December 1, 2016, Parker Hannifin Corporation and CLARCOR Inc. announced that the companies have entered into a definitive agreement under which Parker will acquire CLARCOR for approximately $4.3 billion in cash, including the assumption of net debt. The transaction has been unanimously approved by the board of directors of each company. Upon closing of the transaction, expected to be completed by or during the first quarter of Parker’s fiscal year 2018, CLARCOR will be combined with Parker’s Filtration Group to form a leading and diverse global filtration business. Bass, Berry & Sims has served CLARCOR as primary corporate and securities counsel for 10 years and served as lead counsel on this transaction. Read more here.

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Securities Law Exchange BlogSecurities Law Exchange blog offers insight on the latest legal and regulatory developments affecting publicly traded companies. It focuses on a wide variety of topics including regulation and reporting updates, public company advisory topics, IPO readiness and exchange updates including IPO announcements, M&A trends and deal news.

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Chris Lazarini Outlines Factors to be Considered in a Declaratory Judgment Action

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July 20, 2015

Bass, Berry & Sims attorney Chris Lazarini analyzed Emerman vs. Financial Commodity Investments, LLC in which the court dismissed defendants' declaratory judgment claim. The court considered the following factors in its dismissal:

  1. Whether the declaratory action would settle the controversy;
  2. Whether the declaratory action served a useful purpose in clarifying the legal relations in issue; 
  3. Whether the declaratory remedy was being used merely to gain a tactical advantage in ongoing, parallel proceedings in another court; 
  4. Whether the declaratory action would cause friction between federal and state courts and improperly encroach upon state jurisdiction; and 
  5. Whether an alternative approach provided a more effective means of resolving the dispute.

Chris provided the analysis for Securities Litigation Commentator (SLC). The full text of the analysis is below and used with permission from the publication. If you would like to receive additional content from the SLC, please visit the SLC website to sign up for the newsletter.

Emerman vs. Financial Commodity Investments, LLC, No. 1:13cv2546 (N.D. Ohio, 6/15/15) 

*Declaratory relief may be appropriate in the early stages of litigation to give the parties direction whether a course of conduct may lead to future damages, and is generally not appropriate where the alleged injury is already complete.

**Factors to consider in a declaratory judgment action include: (1) whether the declaratory action will settle the controversy; (2) whether the declaratory action serves a useful purpose in clarifying the legal relations in issue; (3) whether the declaratory remedy is being used merely to gain a tactical advantage where there are ongoing, parallel state and federal proceedings; (4) whether the declaratory action would cause friction between federal and state courts and improperly encroach upon state jurisdiction; and (5) whether an alternative approach affords a more effective means of resolving the dispute. 

Plaintiffs brought this fraud and breach of fiduciary duty action after suffering significant losses in Defendants' commodity trading program. In an earlier opinion, the Court allowed Plaintiffs to file a second amended complaint after the deadline for filing amendments had passed, finding no prejudice where discovery was ongoing and the dispositive motion deadline had not passed (SLA 2015-06). Defendants responded to the second amended complaint, denying wrongdoing and asserting barratry, civil conspiracy, abuse of process, and declaratory judgment as counterclaims. Plaintiffs moved to dismiss the counterclaims. 

Conducting a Twombly analysis, the Court dismisses the barratry ("frequently exciting or stirring up quarrels and suits, either at law or otherwise"), civil conspiracy, and abuse of process claims. The Court finds each of these claims to be vague, conclusory and lacking sufficient factual support to state a claim for relief that is plausible on its face. In contrast to its prior ruling, the Court declines Defendants' request for leave to amend the civil conspiracy and abuse off process claims. The Court finds that Defendants offered no reasonable basis for allowing the amendments, noting that discovery had closed, the dispositive motion deadline was fast approaching, and Defendants knew of Plaintiffs' challenges to the claims from prior pleadings, but did not plead the claims with greater specificity.

The Court gives more deference to the declaratory judgment claim. Following Sixth Circuit guidance on the Declaratory Judgment Act, the Court considers whether issuing a declaration would be "useful and fair." First, the Court finds that issuing a declaration would not bring an end to the litigation because Defendants' counterclaim was not directed at all of Plaintiffs' claims. Second, the Court finds that issuing a declaration would not clarify the legal issues surrounding the factual question of whether Defendants made a material change to their trading program. Finally, the Court concludes that the issues will be more effectively resolved by allowing the parties to address the claims and defenses through the normal course of litigation. Because these factors weigh against Defendants' declaratory judgment claim, the Court declines to exercise jurisdiction over the claim and dismisses it.


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