business judgment rule in Iowa

2026“Less than three months 6 We recognize that “the business judgment rule governs only where a director is shown not to have a self interest in the transaction at issue.” Cookies Food Prods., Inc., by Rowedder v. Lakes Warehouse Distrib., Inc., 430 N.W.2d 447, 453 (Iowa 1988).

2024The district court concluded that Keith’s actions were protected by the business-judgment rule, “which affords directors the presumption that their de- cisions are informed, made in good faith, and honestly believed by them to be in the best interests of the company.” Cookies Food Prods., 430 N.W.2d at 453 .

2020Cookies Food Prods., Inc. v. Lakes Warehouse Distrib., Inc., 430 N.W.2d 447, 451 (Iowa 1988); cf. Hanrahan v. Kruidenier, 473 N.W.2d 184, 186 (Iowa 1991) (characterizing the statutory standard as “the business judgment rule,” and stating “[w]hen directors act in good faith in making a business decision, when the decision is reasonably prudent, and when the directors believe it to be in the corporate interest, there can be no liability”).

2011The business judgment rule applies “[w]hen directors act in good faith in making a business decision, when the decision is reasonably prudent, and when the directors believe it to be in the corporate interest....” Hanrahan v. Kruidenier, 473 N.W.2d 184, 186 (Iowa 1991).

2026So the district court did not err in applying the business-judgment rule and deferring to the Board’s interpretation of “audit.” 10 True, this case was decided on summary judgment while Oberbillig was “tried at law.” Id. at 149 .

2026See id. at 155-56.

2026See State v. Carroll, 767 N.W.2d 638, 644 (Iowa 2009) (“We have repeatedly held we will not consider issues raised for the first time in a reply brief.”); Iowa R.

2018See id. (concluding Cookies Food Products, Inc. does not apply to minority-shareholder oppression claim alleging freeze-out of minority shareholders).

2017See Farmland Foods Inc. v. Dubuque Human Rights Comm’n, 672 N.W.2d 733, 743 (Iowa 2003) (noting the employer’s right to 44 exercise “business judgment and expertise”); Woodbury County v. Iowa Civil Rights Comm’n, 335 N.W.2d 161, 167 (Iowa 1983) (“An employer is entitled to make his own policy and business judgments, and may, for example, fire an adequate employee if his reason is to hire one who will be even better, as long as this is not a pretext for discrimination.” (quoting Loeb, 600 F.2d at 1012 n.6)).

2017See Farmland Foods Inc. v. Dubuque Human Rights Comm’n, 672 N.W.2d 733, 743 (Iowa 2003) (noting the employer’s right to 44 exercise “business judgment and expertise”); Woodbury County v. Iowa Civil Rights Comm’n, 335 N.W.2d 161, 167 (Iowa 1983) (“An employer is entitled to make his own policy and business judgments, and may, for example, fire an adequate employee if his reason is to hire one who will be even better, as long as this is not a pretext for discrimination.” (quoting Loeb, 600 F.2d at 1012 n.6)).

2017“The business judgment rule is a presumption that in making a business decision, not involving self-interest, the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company.” Whalen v. Connelly, 593 N.W.2d 147, 154 (Iowa 1999) (citation omitted).

2011Ass’n v. Solum, 527 N.W.2d 244, 248 (N.D.1995) (“We hold the business-judgment rule applies to a board’s actions regarding repairs to the common areas of a condominium.”); Schwarzmann v. Ass’n of Apartment Owners of Bridgehaven, 33 Wash.App. 397 , 655 P.2d 1177, 1181 (1982) (“Absent a showing of fraud, dishonesty, or incompetence, it is not the court’s job to second-guess the actions of [condominium] directors.”).

2011Ass’n, 279 Conn. 728 , 904 A.2d 188, 192 (2006) (noting the court reviews “whether the [action] reflects reasoned or arbitrary and capricious decision making”); Papalexiou v. Tower W.

2011Ass’n, 279 Conn. 728 , 904 A.2d 188, 192 (2006) (noting the court reviews “whether the [action] reflects reasoned or arbitrary and capricious decision making”); Papalexiou v. Tower W.

2011Ass’n v. Solum, 527 N.W.2d 244, 248 (N.D.1995) (“We hold the business-judgment rule applies to a board’s actions regarding repairs to the common areas of a condominium.”); Schwarzmann v. Ass’n of Apartment Owners of Bridgehaven, 33 Wash.App. 397 , 655 P.2d 1177, 1181 (1982) (“Absent a showing of fraud, dishonesty, or incompetence, it is not the court’s job to second-guess the actions of [condominium] directors.”).

2011Ass’n v. Solum, 527 N.W.2d 244, 248 (N.D.1995) (“We hold the business-judgment rule applies to a board’s actions regarding repairs to the common areas of a condominium.”); Schwarzmann v. Ass’n of Apartment Owners of Bridgehaven, 33 Wash.App. 397 , 655 P.2d 1177, 1181 (1982) (“Absent a showing of fraud, dishonesty, or incompetence, it is not the court’s job to second-guess the actions of [condominium] directors.”).

2011See, e.g., Lamden v. La Jolla Shores Clubdominium Homeowners Ass’n, 21 Cal.4th 249 , 87 Cal.Rptr.2d 237 , 980 P.2d 940, 950 (1999) (holding “courts should defer to the board’s authority and presumed expertise” when it discharges its duty to repair a common area after a “reasonable investigation, in good faith and with regard for the best interests of the community association and its members”); Colorado Homes, Ltd. v. Loerch-Wilson, 43 P.3d 718, 724 (Colo.App.2001) (“We perceive no reason why [the business judgment rule] should not apply in this case insofar as the issue for resolution is whet

2011See, e.g., Lamden v. La Jolla Shores Clubdominium Homeowners Ass’n, 21 Cal.4th 249 , 87 Cal.Rptr.2d 237 , 980 P.2d 940, 950 (1999) (holding “courts should defer to the board’s authority and presumed expertise” when it discharges its duty to repair a common area after a “reasonable investigation, in good faith and with regard for the best interests of the community association and its members”); Colorado Homes, Ltd. v. Loerch-Wilson, 43 P.3d 718, 724 (Colo.App.2001) (“We perceive no reason why [the business judgment rule] should not apply in this case insofar as the issue for resolution is whet

2011See, e.g., Lamden v. La Jolla Shores Clubdominium Homeowners Ass’n, 21 Cal.4th 249 , 87 Cal.Rptr.2d 237 , 980 P.2d 940, 950 (1999) (holding “courts should defer to the board’s authority and presumed expertise” when it discharges its duty to repair a common area after a “reasonable investigation, in good faith and with regard for the best interests of the community association and its members”); Colorado Homes, Ltd. v. Loerch-Wilson, 43 P.3d 718, 724 (Colo.App.2001) (“We perceive no reason why [the business judgment rule] should not apply in this case insofar as the issue for resolution is whet

2000See Alsea Veneer, Inc., 862 P.2d at 100 .

1999Seaford Funding, 672 A.2d at 70 ; see also Spiegel, 571 A.2d at 777 .

1999“The business judgment rule is a presumption that in making a business decision, not involving self-interest, the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company.” Spiegel, 571 A.2d at 774 . 6 “The burden is on the party challenging the decision to establish facts rebutting the presumption.” Aronson v. Lewis, 473 A.2d 805, 812 (Del.1984).

1999Seaford Funding, 672 A.2d at 70 ; see also Spiegel, 571 A.2d at 777 .

1999Seaford Funding, 672 A.2d at 70 .

1999“The business judgment rule is a presumption that in making a business decision, not involving self-interest, the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company.” Spiegel, 571 A.2d at 774 . 6 “The burden is on the party challenging the decision to establish facts rebutting the presumption.” Aronson v. Lewis, 473 A.2d 805, 812 (Del.1984).

1991Auerbach v. Bennett, 47 N.Y.2d 619, 634-35 , 393 N.E.2d 994, 1002-03 , 419 N.Y.S.2d 920, 929 (1979); see also Kann v. Keystone Resources, Inc., 575 F.Supp. 1084, 1090 (W.D.Penn.1983) (to prove corporate officer breached fiduciary duty by voting on his own compensation, it must be established that that act amounted to corporate waste or fraud).

1991Auerbach v. Bennett, 47 N.Y.2d 619, 634-35 , 393 N.E.2d 994, 1002-03 , 419 N.Y.S.2d 920, 929 (1979); see also Kann v. Keystone Resources, Inc., 575 F.Supp. 1084, 1090 (W.D.Penn.1983) (to prove corporate officer breached fiduciary duty by voting on his own compensation, it must be established that that act amounted to corporate waste or fraud).

1991Auerbach v. Bennett, 47 N.Y.2d 619, 634-35 , 393 N.E.2d 994, 1002-03 , 419 N.Y.S.2d 920, 929 (1979); see also Kann v. Keystone Resources, Inc., 575 F.Supp. 1084, 1090 (W.D.Penn.1983) (to prove corporate officer breached fiduciary duty by voting on his own compensation, it must be established that that act amounted to corporate waste or fraud).

1988Norlin, 744 F.2d at 265 ; Morrissey v. Curran, 650 F.2d 1267,1274 (2d Cir.1981); Cohen v. Ayers, 596 F.2d 733, 739 (7th Cir.1979).

1988Norlin, 744 F.2d at 265 ; Morrissey v. Curran, 650 F.2d 1267, 1274 (2d Cir.1981); Cohen v. Ayers, 596 F.2d 733, 739 (7th Cir.1979).

1988Norlin, 744 F.2d at 265 ; Morrissey v. Curran, 650 F.2d 1267,1274 (2d Cir.1981); Cohen v. Ayers, 596 F.2d 733, 739 (7th Cir.1979).

1988Norlin, 744 F.2d at 265 ; Morrissey v. Curran, 650 F.2d 1267, 1274 (2d Cir.1981); Cohen v. Ayers, 596 F.2d 733, 739 (7th Cir.1979).

1988See Smith v. Van Gorkom, 488 A.2d 858, 872 (Del.1985).

1988See Smith v. Van Gorkom, 488 A.2d 858, 872 (Del.1985).

1983Abbey, 603 F.2d at 729; Gall, 418 F.Supp. at 519-20 ; Zapata, 430 A.2d at 785-86 .

1983Abbey v. Control Data Corp., 603 F.2d 724 , 730 (8th Cir.1979), cert. denied, 444 U.S. 1017 , 100 S.Ct. 670 , 62 L.Ed.2d 647 (1980); Watts v. Des Moines Register and Tribune, 525 F.Supp. 1311, 1326 (S.D.Iowa 1981); Rosengarten v. International Telephone & Telegraph Corp., 466 F.Supp. 817, 822-23 (S.D.N.Y.1979); Maldonado v. Flynn, 485 F.Supp. 274, 285-86 (S.D.N.Y.1980), rev’d in part, 671 F.2d 729 (2d Cir.1982); Gall v. Exxon Corp., 418 F.Supp. 508, 519-20 (S.D.N.Y.1976).

1983Abbey, 603 F.2d at 729; Gall, 418 F.Supp. at 519-20 ; Zapata, 430 A.2d at 785-86 .

1983Abbey v. Control Data Corp., 603 F.2d 724 , 730 (8th Cir.1979), cert. denied, 444 U.S. 1017 , 100 S.Ct. 670 , 62 L.Ed.2d 647 (1980); Watts v. Des Moines Register and Tribune, 525 F.Supp. 1311, 1326 (S.D.Iowa 1981); Rosengarten v. International Telephone & Telegraph Corp., 466 F.Supp. 817, 822-23 (S.D.N.Y.1979); Maldonado v. Flynn, 485 F.Supp. 274, 285-86 (S.D.N.Y.1980), rev’d in part, 671 F.2d 729 (2d Cir.1982); Gall v. Exxon Corp., 418 F.Supp. 508, 519-20 (S.D.N.Y.1976).

1983Abbey v. Control Data Corp., 603 F.2d 724 , 730 (8th Cir.1979), cert. denied, 444 U.S. 1017 , 100 S.Ct. 670 , 62 L.Ed.2d 647 (1980); Watts v. Des Moines Register and Tribune, 525 F.Supp. 1311, 1326 (S.D.Iowa 1981); Rosengarten v. International Telephone & Telegraph Corp., 466 F.Supp. 817, 822-23 (S.D.N.Y.1979); Maldonado v. Flynn, 485 F.Supp. 274, 285-86 (S.D.N.Y.1980), rev'd in part, 671 F.2d 729 (2d Cir.1982); Gall v. Exxon Corp., 418 F.Supp. 508, 519-20 (S.D.N.Y.1976).

1983Abbey v. Control Data Corp., 603 F.2d 724 , 730 (8th Cir.1979), cert. denied, 444 U.S. 1017 , 100 S.Ct. 670 , 62 L.Ed.2d 647 (1980); Watts v. Des Moines Register and Tribune, 525 F.Supp. 1311, 1326 (S.D.Iowa 1981); Rosengarten v. International Telephone & Telegraph Corp., 466 F.Supp. 817, 822-23 (S.D.N.Y.1979); Maldonado v. Flynn, 485 F.Supp. 274, 285-86 (S.D.N.Y.1980), rev’d in part, 671 F.2d 729 (2d Cir.1982); Gall v. Exxon Corp., 418 F.Supp. 508, 519-20 (S.D.N.Y.1976).

1983There Chief Judge Stuart first held that Iowa courts would apply the business judgment rule and preclude judicial interference with the decision of an independent disinterested corporate committee even though the defendant directors who appointed the committee were themselves alleged to have committed fraud and various breaches of fiduciary duty. 525 F.Supp. at 1314, 1325 .

1983There Chief Judge Stuart first held that Iowa courts would apply the business judgment rule and preclude judicial interference with the decision of an independent disinterested corporate committee even though the defendant directors who appointed the committee were themselves alleged to have committed fraud and various breaches of fiduciary duty. 525 F.Supp. at 1314, 1325 .