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California › Derivative Suit

DLA Piper

Legal Shopping Spree Continues in Internal Affairs Disputes: Key Case Developments

DLA Piper on

The first half of 2025 saw numerous developments in the strategies and counterstrategies between corporations and their stockholders in efforts to find the most favorable law and courts to decide disputes between them....more

Sheppard Mullin Richter & Hampton LLP

California Court of Appeal Holds That Derivative Litigation Settlement Procedural Rules Apply Even In Intra-Shareholder Suits in...

Sheppard Mullin Richter & Hampton LLP on

In Norman v. Strateman, No. A170356, 2025 WL 1802786 (Cal. App., 1st Dist., June 20, 2025), the California Court of Appeal held that a settlement of derivative claims reached among all shareholders of a close corporation was...more

Allen Matkins

Just What Are The Duties Of A Controlling Shareholder And How Should Claims Of Breach Be Brought?

Allen Matkins on

In a recent post, Professor Stephen Bainbridge discusses the question of when a controlling shareholder owes fiduciary duties to minority shareholders.  Knowing when controlling shareholder owes fiduciary duties is one thing,...more

Allen Matkins

Does Personal Animosity Vitiate The Business Judgment Rule?

Allen Matkins on

Under the business judgment rule, "a director is not liable for a mistaken business judgment which is made in good faith and in what he or she believes to be in the best interest of the corporation, where no conflict of...more

Allen Matkins

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

Allen Matkins on

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. Last Friday,...more

Allen Matkins

Alleged Corporate Murder Merits A Jury Trial

Allen Matkins on

The California Constitution declares that trial by jury is an "inviolate right" that "shall be secured to all".  Cal. Const. Art. I, §16.  Despite this expansive language, this right in the civil context is generally limited...more

Allen Matkins

A First Sighting Of Zuckerberg Decision In California

Allen Matkins on

Last year, the Delaware Supreme Court adopted a tripartite test for assessing demand futility allegations in derivative actions. United Food & Commercial Workers Union v. Zuckerberg 262 A.3d 1034 (Del. 2021). Under this...more

Allen Matkins

Why A River Runs Through Every Derivative Action

Allen Matkins on

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...more

Sheppard Mullin Richter & Hampton LLP

California Court of Appeal Clarifies that a Derivative Plaintiff Must Demonstrate Both “Contemporaneous” and “Continuous”...

Sheppard Mullin Richter & Hampton LLP on

In Sirott v. Superior Court, 2022 Cal. App. LEXIS 389 (Cal. App. May 5, 2022), the First Appellate District of the California Court of Appeal (Humes, J.) analyzed the ownership requirements a plaintiff must satisfy to pursue...more

Allen Matkins

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

Allen Matkins on

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...more

Allen Matkins

Nevada Supreme Court Finds California Precedent "Persuasive" In Appeal Of Derivative Action

Allen Matkins on

What, if any, is the standing of a corporation in a derivative action?  Until this month, that question was yet to be addressed by the Nevada Supreme Court.  We now have an answer....more

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