Continued Decline in Federal Stockholders' Lawsuits

The latest available data from the federal courts show that during July 2015 the government reported the filing of 14 new stockholders' lawsuits in the district courts. According to the case-by-case information analyzed by the Transactional Records Access Clearinghouse (TRAC), this number continues the average year-to-year decline since stockholders' suits peaked during FY 2010 - FY 2011 period, following the 2008 economic downturn.

When the average monthly FY 2015 civil filings of this type are compared with the monthly average during FY 2014, their number was down by 28 percent. And compared to the monthly average during FY 2011, this year such lawsuits have dropped by 42 percent. These comparisons of the number of civil filings for stockholders' suits-related suits are based on case-by-case court records which were compiled and analyzed by TRAC (see Table 1).

There is considerable month-to-month fluctuation in these federal filings, however. The month-to-month trend in stockholders' lawsuits going back five years is shown more clearly in Figure 1. The vertical bars in Figure 1 represent the number of civil stockholders' suits filed each month. The superimposed line on the bars plots the six-month moving average so that natural fluctuations are smoothed out.

Figure 1. Stockholders' Lawsuits Filed Over the Past Five Years

Jurisdiction

Figure 2. Jurisdiction for
Stockholders' Civil Filings

Within limits set by Congress and the Constitution, the federal district courts have jurisdiction to hear cases falling under any one of several categories. The single largest number of civil filings of these matters through July 2015 was under the classification "Diversity", accounting for 71.4 percent of civil filings. The remaining suits (28.6%) were recorded because a "Federal Question" was involved.

These ratios have remained very similar over the years. From fiscal year 2008 to date, roughly three out of every four such cases have been filed based on diversity grounds, and the remaining quarter have cited a federal question as their basis.

Each month, TRAC offers a free report focused on one area of civil litigation in the U.S. district courts. In addition, subscribers to the TRACFed data service can generate custom reports by district, office, nature of suit or federal jurisdiction via the TRAC Data Interpreter.