A Recent Reminder That Omitting This Averment May Doom A Derivative Claim

Section 800 of the California Corporations Code applies to actions brought in the name of any domestic or foreign corporation, aka derivative actions. It is similar, but not the same as, Delaware Court of Chancery Rule 23.1 and Federal Rule of Civil...

Court of Appeal Applies Caremark/Marchand To Directors of a California Corporation But The Result May Surprise You

Over the years, I have commented on the fact that the California Court of Appeal has yet to apply In re Caremark International Inc., 698 A.2d 959 (Del. Ch. 1996) to the directors of a California corporation.  See Still No California Caremark? and ...

Will Corporate DEI Efforts Engender Caremark Claims?

In a posting on the Business Law Prof Blog, Professor Stefan J. Padfield recently highlighted a complaint filed by America First Legal Foundation with the U.S. Equal Employment Opportunity Commission. The complaint alleges that McDonald's...

Nevada Supreme Court Affirms Contemporaneous Ownership Requirement In LLC Derivative Action

I a short order of affirmance issued last week, the Nevada Supreme Court affirmed a basic requirement of derivative litigation. J. McDonald Co. v. Tropical & Losee, LLC, 2022 WL 6833521 (Nev. Oct. 11, 2022).  The case involved an attempt by J....

A First Sighting Of Zuckerberg Decision In California

Last year, the Delaware Supreme Court adopted a tripartite test for assessing demand futility allegations in derivative actions.  United Food & Commercial Workers Union vZuckerberg262A.3d1034 (Del.2021).  Under this test, courts are to...

Why A River Runs Through Every Derivative Action

I was perplexed by Judge Cindee F. Mayfield's repeated references to "derivate claims" in a recent unpublished opinion - JBB Investment Partners v. Fair, Cal. Ct. of Appeal Case No. No. A160098 (June 9, 2022). Was this a typographical error or was...

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 declined...

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...

1 2 3 4