For the second time in recent weeks, a New York state judge has rejected a “disclosure-only” shareholder settlement of litigation over a merger deal. In a Jan. 7 ruling, Judge Shirley Kornreich lashed out at the tactics of a plaintiffs firm and rejected a proposed agreement to resolve claims over Martin Marietta Materials Inc.'s $2.7 billion acquisition of Texas Industries Inc.

The decision come less than a month after Judge Melvin Schweitzer refused to approve a settlement that would have ended litigation over Verizon Communication Inc.'s $130 billion purchase of Vodaphone Group plc's interest in Verizon Wireless.

In the Martin Marietta case, the plaintiffs—represented by New York's Brualdi Law Firm—claimed that proxy materials explaining the deal to shareholders were inadequate. The firm's clients are an investment partnership called City Trading Fund and its two individual investors, who held just $1,200 of Martin Marietta stock as of last April. The settlement required the companies to add more disclosures to their proxies. The plaintiffs lawyers would have received $500,000 in the deal.