Pyott v. Louisiana Municipal Police Employees’ Retirement System
- Case Date: 8/21/2012
- Project Name: Civil Justice Reform
On April 4, 2013, the Delaware Supreme Court overturned a lower-court decision that eliminated virtually all limits on the number of shareholder derivative lawsuits that may be filed against a corporation and its directors based on a single event. The lower court had held that a decision dismissing a derivative action filed by one group of shareholders is not binding on other shareholders seeking to assert an identical claim. The Supreme Court’s decision was a victory for WLF, which filed a brief urging reversal. It agreed with WLF that all shareholders of a corporation are in “privity” with one another with respect to derivative claims – because they are all asserting the same interests of the corporation against its board of directors – and thus should be bound by any judgment entered against another group of shareholders. WLF argued that unless preclusive effect is given to the first decision, corporations will face an endless series of derivative actions.
More Information and Downloads:
8/21/2012: Download the Brief
Litigation Update: Court Cracks Down On Multiple Shareholder Derivative Suits