Bar Exam Toolbox Podcast Episode 167: Listen and Learn -- Direct and Derivative Actions (Corporations)
Board Diversity Podcast
Securities Litigation and Disclosure Issues
Podcast: CFTC Issues LIBOR Transition Relief for Swaps
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
Companies that are serious about managing director and officer litigation risk have been adopting choice of forum provisions. Such provisions continue to permit shareholders to sue directors and officers if shareholders want...more
On June 1, 2023, the United States Supreme Court issued a unanimous opinion that makes it more difficult for shareholders to bring Section 11 claims against companies that go public via direct listings. The case involved a...more
In a recent 6-5 ruling, an en banc panel of the Ninth Circuit affirmed the dismissal of a derivative suit asserting Exchange Act violations against The Gap, Inc. and its directors. The district court had dismissed the suit —...more
The Ninth Circuit Court of Appeals recently agreed to rehear en banc the dismissal—based on a Delaware exclusive forum selection bylaw provision—of a shareholder derivative suit asserting violations of Section 14(a) of the...more
In Lee v. Fisher, 34 F.4th 777 (9th Cir. 2022), the Ninth Circuit affirmed the dismissal of a shareholder derivative suit against The Gap Inc. (Gap), alleging violations of Section 14(a) of the Securities Exchange Act of...more
Earlier this year the United States Courts of Appeals for the Seventh and Ninth Circuits each addressed the question of whether an exclusive forum provision adopted by a Delaware company and requiring derivative litigation...more
As we have previously discussed, Lee v. Robert J. Fisher et al., Case No. 20 Civ. 6163 (N.D. Ca.), is one of a growing number of derivative lawsuits brought against public companies (in this case, The Gap Inc.) alleging...more
The Seventh Circuit issued a resounding message: Delaware forum selection clauses in corporate bylaws cannot lawfully prevent a plaintiff from bringing claims under the Securities Exchange Act of 1934 (the Exchange Act or the...more
A recent ruling by the Seventh Circuit in Seafarers Pension Plan v. Bradway addresses the issue of where shareholder derivative lawsuits may be filed when the company at issue has a forum selection clause in its bylaws. The...more
As discussed in a previous client alert, The Boeing Company (Boeing) has faced shareholder litigation arising from the fatal crashes of two 737 MAX airplanes. In one such derivative suit filed under Section 14(a) of the...more
The Situation: A number of shareholder derivative lawsuits in federal court have been filed seeking to hold directors and officers of major companies accountable for alleged failures to uphold their companies' stated...more
The rash of shareholder derivative actions alleging violations of fiduciary duties tied to companies’ diversity measures are continuing to take a beating in the Northern District of California. We previously posted about the...more
This week, another shareholder derivative suit was dismissed based on a forum selection clause contained in the company’s bylaws. In November 2020, a shareholder filed a derivative action alleging that directors and officers...more
On March 19, 2021, the United States District Court for the Northern District of California ordered the dismissal of Natalie Ocegueda v. Zuckerberg, Case No. 20-cv-04444-LB, a shareholder derivative suit purportedly on behalf...more
As Troutman Pepper recently reported, the second half of 2020 brought a new wave of board diversity derivative litigation. These shareholder suits claimed boards of directors of public companies allegedly breached their...more
A shareholder derivative action which had alleged that Facebook’s lack of diversity caused a negative effect on its stock price was rejected by a California federal magistrate judge last week. The court held that the...more
On March 15, 2019, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery declined to dismiss a derivative suit brought by minority stockholders of Pilgrim’s Pride Corporation (the “Company”) against the Company’s...more
In Bushansky v. Soon-Shiong, 2018 Cal. App. LEXIS 493 (Cal. App. May 25, 2018), the California Court of Appeal, Fourth Appellate District, affirmed the dismissal of a shareholder derivative action brought in the Superior...more
NantKwest, Inc. describes itself as "a pioneering clinical-stage immunotherapy biotechnology company headquartered in San Diego, California with certain operations in Culver City and El Segundo, California and Woburn,...more
The Delaware Supreme Court held yesterday that the dismissal of a shareholder derivative action for lack of demand futility can preclude other derivative actions as long as the plaintiff in the dismissed case adequately...more
The Delaware Supreme Court requested further consideration of the federal due-process issues that might arise where a court is asked to hold that a shareholder derivative action is precluded because a prior derivative action...more
As we have previously discussed, there has been a growing trend of corporations’ adopting various types of bylaws to define the bounds of shareholder litigation. These include forum-selection bylaws and fee-shifting bylaws...more
A recent decision in the Delaware Supreme Court, in conjunction with the broad California exceptions to the internal affairs doctrine, may dictate the legal landscape of shareholder litigation in California in the near...more
At the end of last week, the North Carolina General Assembly passed significant legislation affecting the State’s business legal climate. With large bipartisan majorities, the Legislature adopted Senate Bill 853 (SB 853),...more