California Court Of Appeal Finds Caremark To Be Too Steep A Hill For Plaintiff To Climb

In January 2018, the media began reporting on  two security vulnerabilities affecting Intel Corporation's microprocessors - dubbed "Spectre" and "Meltdown".  Following these disclosures, Intel's stock price fell and its market capitalization...

Federal Court Applies Demand Excused Test When Demand Was Allegedly Made

I must confess that I confess that I am nonplused by a recent ruling by U.S. District Court Judge James A. Teilborg in SinglePoint Direct Solar LLC v. Curiel, 2022 U.S. Dist. LEXIS 19880.  The case involved, among other things, a derivative claim...

Professor Bainbridge's Quibble Might Be No Quillet

In this post, UCLA Law School Professor Stephen Bainbridge quibbles my description of Delaware's two-step approach to the special litigation committee defense in derivative suits.  In particular, he points out that Delaware not only adds a second...

Court Orders Discovery In Derivative Action Challenging Racial Diversity

Last year, the City of Pontiac General Employees' Retirement System filed a derivative suit against the Board of Directors and Chief Executive Officer of Cisco Systems, Inc.  The gist of the complaint was that the "Defendants publicly misrepresented...

Unsuccessful Derivative Plaintiff Found Personally Liable For Defendant's Attorneys' Fees

I expect that most plaintiffs in derivative actions do not expect to pay a defendant's attorneys' fees if they lose because under the "American Rule" each side pays their own attorneys' fees, regardless of who wins.  A contract may, of course,...

Does A Plaintiff In A Derivative Action Have A Protectable Interest?

When allegations of corporate misfeasance surface at public companies, derivative actions are sure to follow.  Often, actions will be filed in both state and federal court.  This is what happened when "sexual misconduct" claims were made made public...

Dismissal Of State Court Derivative Action Yields Dismissal Of Parallel Federal Action

I first wrote about the preclusive effect, if any, of a dismissal of a parallel derivative action some nine years ago when I wrote about Vice Chancellor J. Travis Laster's ruling in La. Mun. Police Emples. Ret. Sys. v. Pyott, 46 A.3d 313, (2012).  ...

Does Requiring Shareholder Demand Increase Firm Value?

California, like many other states, imposes a demand requirement on shareholders who want to maintain a derivative action.  Thus, Corporations Code Section 800(b)(2) requires that a plaintiff allege in its complaint with particularity "plaintiff’s...

Nevada's Director Liability Standard Defeats Another Derivative Suit

NRS 78.138(3) imposes a statutory presumption that other than in cases of a change in control of the corporation, directors and officers, in deciding upon matters of business, act in good faith, on an informed basis and with a view to the interests...

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