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7 California opinions name it 2 courts 2013–2023 2 in the last five years
The cases below were cited by California courts in a sentence that names this issue. Sides come from how each citing opinion treated the case (Syfertize flag on that citation), so a case can appear on both: that is where the law is contested. A red or yellow chip is the case's own overall treatment.
| Case | Followed | Cited |
|---|---|---|
Aronson v. Lewisgreen2 sentences2023Where a decision of the board of directors is challenged in the derivative suit, the Aronson test 13 asks ‘whether, under the particularized facts alleged, a reasonable doubt is created that: (1) the directors are disinterested and independent [or] (2) the challenged transaction was otherwise the product of a valid exercise of business judgment.’ (Aronson v. Lewis (Del. 1984) 473 A.2d 805, 814 (Aronson); accord Bader, supra, 179 Cal.App.4th at p. 791 ; Oakland Raiders[, supra,] 93 Cal.App.4th [at p.] 587 . . .) But where ‘the board that would be considering the demand did not make a business d 2023Where a decision of the board of directors is challenged in the derivative suit, the Aronson test 13 asks ‘whether, under the particularized facts alleged, a reasonable doubt is created that: (1) the directors are disinterested and independent [or] (2) the challenged transaction was otherwise the product of a valid exercise of business judgment.’ (Aronson v. Lewis (Del. 1984) 473 A.2d 805, 814 (Aronson); accord Bader, supra, 179 Cal.App.4th at p. 791 ; Oakland Raiders[, supra,] 93 Cal.App.4th [at p.] 587 . . .) But where ‘the board that would be considering the demand did not make a business d | 3 | 4 |
Bader v. Andersongreen2 sentences2023Where a decision of the board of directors is challenged in the derivative suit, the Aronson test 13 asks ‘whether, under the particularized facts alleged, a reasonable doubt is created that: (1) the directors are disinterested and independent [or] (2) the challenged transaction was otherwise the product of a valid exercise of business judgment.’ (Aronson v. Lewis (Del. 1984) 473 A.2d 805, 814 (Aronson); accord Bader, supra, 179 Cal.App.4th at p. 791 ; Oakland Raiders[, supra,] 93 Cal.App.4th [at p.] 587 . . .) But where ‘the board that would be considering the demand did not make a business d 2023Where a decision of the board of directors is challenged in the derivative suit, the Aronson test 13 asks ‘whether, under the particularized facts alleged, a reasonable doubt is created that: (1) the directors are disinterested and independent [or] (2) the challenged transaction was otherwise the product of a valid exercise of business judgment.’ (Aronson v. Lewis (Del. 1984) 473 A.2d 805, 814 (Aronson); accord Bader, supra, 179 Cal.App.4th at p. 791 ; Oakland Raiders[, supra,] 93 Cal.App.4th [at p.] 587 . . .) But where ‘the board that would be considering the demand did not make a business d | 3 | 3 |
Rales v. Blasband Ex Rel. Easco Hand Tools, Inc.red2 sentences2023Where a decision of the board of directors is challenged in the derivative suit, the Aronson test 13 asks ‘whether, under the particularized facts alleged, a reasonable doubt is created that: (1) the directors are disinterested and independent [or] (2) the challenged transaction was otherwise the product of a valid exercise of business judgment.’ (Aronson v. Lewis (Del. 1984) 473 A.2d 805, 814 (Aronson); accord Bader, supra, 179 Cal.App.4th at p. 791 ; Oakland Raiders[, supra,] 93 Cal.App.4th [at p.] 587 . . .) But where ‘the board that would be considering the demand did not make a business d 2023Where a decision of the board of directors is challenged in the derivative suit, the Aronson test 13 asks ‘whether, under the particularized facts alleged, a reasonable doubt is created that: (1) the directors are disinterested and independent [or] (2) the challenged transaction was otherwise the product of a valid exercise of business judgment.’ (Aronson v. Lewis (Del. 1984) 473 A.2d 805, 814 (Aronson); accord Bader, supra, 179 Cal.App.4th at p. 791 ; Oakland Raiders[, supra,] 93 Cal.App.4th [at p.] 587 . . .) But where ‘the board that would be considering the demand did not make a business d | 2 | 4 |
Apple Inc. v. Superior Court of Santa Clara Cnty.green2 sentences2023If the derivative plaintiff satisfies this burden, then demand will be excused as futile’ ( Rales, supra, [634 A.2d] at p. 934; accord Bader, supra, [179 Cal.App.4th] at pp. 791–792 [summarizing Rales]).” (Apple Inc. v. Superior Court (2017) 18 Cal.App.5th 222, 233 , fn. omitted (Apple).)9 Here, the parties agree that the Rales test applies to plaintiffs’ allegation of demand futility. 9 Aronson was overruled on another point not relevant here. 2023If the derivative plaintiff satisfies this burden, then demand will be excused as futile’ ( Rales, supra, [634 A.2d] at p. 934; accord Bader, supra, [179 Cal.App.4th] at pp. 791–792 [summarizing Rales]).” (Apple Inc. v. Superior Court (2017) 18 Cal.App.5th 222, 233 , fn. omitted (Apple).)9 Here, the parties agree that the Rales test applies to plaintiffs’ allegation of demand futility. 9 Aronson was overruled on another point not relevant here. | 2 | 2 |
Oakland Raiders v. NATIONAL FOORBALL LEAGUEgreen2 sentences2017Where a decision of the board of directors is challenged in the derivative suit, the Aronson test asks “whether, under the particularized facts alleged, a reasonable doubt is created that: (1) the directors are disinterested and independent [or] (2) the challenged transaction was otherwise the product of a valid exercise of business judgment.” (Aronson v. Lewis (Del. 1984) 473 A.2d 805, 814 (Aronson); 2 accord Bader, supra, 179 Cal.App.4th at p. 791 ; Oakland Raiders v. National Football League (2001) 93 Cal.App.4th 572, 587 (Oakland Raiders).) But where “the board that would be considering th 2017Where a decision of the board of directors is challenged in the derivative suit, the Aronson test asks “whether, under the particularized facts alleged, a reasonable doubt is created that: (1) the directors are disinterested and independent [or] (2) the challenged transaction was otherwise the product of a valid exercise of business judgment.” (Aronson v. Lewis (Del. 1984) 473 A.2d 805, 814 (Aronson); 2 accord Bader, supra, 179 Cal.App.4th at p. 791 ; Oakland Raiders v. National Football League (2001) 93 Cal.App.4th 572, 587 (Oakland Raiders).) But where “the board that would be considering th | 1 | 2 |
Leyte-Vidal v. Semelgreen1 sentence2021If the derivative plaintiff 9 7 satisfies this burden, then demand will be excused as futile.’ ” (Apple Inc., supra, 18 Cal.App.5th at p. 233 ; accord Leyte-Vidal v. Semel (2013) 220 Cal.App.4th 1001, 1009-1010 .) “ ‘ “[T]he court must be apprised of facts specific to each director from which it can conclude that that particular director could or could not be expected to fairly evaluate the claims of the shareholder plaintiff.” [Citation.] Thus, the court, in reviewing the allegations to support demand futility, must be able to determine on a director-by-director basis whether . . . each posse | 1 | 1 |
Dula v. Stategreen2 sentences2020(City of Birmingham, supra, 177 A.3d at p. 55.) 15 To establish demand futility sufficient to survive demurrer, the complaint’s allegations must support a reasonable doubt that a majority of the board was disinterested because they breached their duty of loyalty. “[D]emand will be excused based on a possibility of personal director liability only in the rare case when a plaintiff is able to show director conduct that is ‘so egregious on its face that board approval cannot meet the test of business judgment, and a substantial likelihood of director liability therefore exists.’ ” (Citigroup, sup 2020(City of Birmingham, supra, 177 A.3d at p. 55.) 15 To establish demand futility sufficient to survive demurrer, the complaint’s allegations must support a reasonable doubt that a majority of the board was disinterested because they breached their duty of loyalty. “[D]emand will be excused based on a possibility of personal director liability only in the rare case when a plaintiff is able to show director conduct that is ‘so egregious on its face that board approval cannot meet the test of business judgment, and a substantial likelihood of director liability therefore exists.’ ” (Citigroup, sup | 1 | 1 |
Pirelli Armstrong Tire Corporation Retiree Medical Benefits Trust v. Rainesgreen2 sentences2015Cir. 2008) 534 F.3d 779, 782-783 [applying Delaware law].) There are two tests for analyzing demand futility under Delaware law: the Aronson test and the Rales test. 2015Cir. 2008) 534 F.3d 779, 782-783 [applying Delaware law].) There are two tests for analyzing demand futility under Delaware law: the Aronson test and the Rales test. | 1 | 1 |
Bezirdjian v. O'Reillygreen2 sentences2015Ch. 2003) 825 A.2d 275, 286 .) “These rare cases include those in which a board decides to undertake illegal activity.” (Rosenbloom v. Pyott (9th Cir. 2014) 765 F.3d 1137, 1149 .) “The Rales test requires that the plaintiff allege particularized facts establishing a reason to doubt that ‘the board of directors could have properly exercised its independent and disinterested business judgment in responding to a demand.’” (Wood v. Baum (Del. 4 Even where the underlying conduct alleged in the complaint constitutes corporate wrongdoing, the Board retains the power to refuse to sue “if it deem[s] th 2015Ch. 2003) 825 A.2d 275, 286 .) “These rare cases include those in which a board decides to undertake illegal activity.” (Rosenbloom v. Pyott (9th Cir. 2014) 765 F.3d 1137, 1149 .) “The Rales test requires that the plaintiff allege particularized facts establishing a reason to doubt that ‘the board of directors could have properly exercised its independent and disinterested business judgment in responding to a demand.’” (Wood v. Baum (Del. 4 Even where the underlying conduct alleged in the complaint constitutes corporate wrongdoing, the Board retains the power to refuse to sue “if it deem[s] th | 1 | 1 |
| Case | Negative | Cited |
|---|---|---|
| No negative-treatment citations attached to this issue in California. Read the followed side critically anyway. | ||
| Case | Cited | Years |
|---|---|---|
Brehm v. Eisner
green
2 sentences2015(Aronson v. Lewis (Del. 1984) 473 A.2d 805 , 814 overruled on another ground by Brehm v. Eisner (Del. 2000) 746 A.2d 244, 253-254 .) The Rales test applies where the subject of a derivative suit is not a board decision but rather a board’s inaction leading to an alleged violation of the board’s oversight duties. 2015(Aronson v. Lewis (Del. 1984) 473 A.2d 805 , 814 overruled on another ground by Brehm v. Eisner (Del. 2000) 746 A.2d 244, 253-254 .) The Rales test applies where the subject of a derivative suit is not a board decision but rather a board’s inaction leading to an alleged violation of the board’s oversight duties. | 2 | 2015–2023 |
Shields v. Singleton
green
2 sentences2017Plaintiffs were "required to allege facts 'with particularity' ( § 800(b)(2) ) sufficient to 'create a reasonable doubt that, as of the time the complaint is filed, the board of directors could have properly exercised its independent and disinterested business judgment in responding to a demand.' " ( Bader , supra , 179 Cal.App.4th at p. 797 , 101 Cal.Rptr.3d 821 .) Broad or conclusory allegations are insufficient ( Shields , supra , 15 Cal.App.4th at p. 1621 , 19 Cal.Rptr.2d 459 ), as are "facts relating to the structural bias common to corporate boards ...." ( Oakland Raiders , supra , 93 Ca 2017Plaintiffs were "required to allege facts 'with particularity' ( § 800(b)(2) ) sufficient to 'create a reasonable doubt that, as of the time the complaint is filed, the board of directors could have properly exercised its independent and disinterested business judgment in responding to a demand.' " ( Bader , supra , 179 Cal.App.4th at p. 797 , 101 Cal.Rptr.3d 821 .) Broad or conclusory allegations are insufficient ( Shields , supra , 15 Cal.App.4th at p. 1621 , 19 Cal.Rptr.2d 459 ), as are "facts relating to the structural bias common to corporate boards ...." ( Oakland Raiders , supra , 93 Ca | 2 | 2017–2017 |
In Re Citigroup Inc. Shareholder Derivative Litigation
green
2 sentences2020(City of Birmingham, supra, 177 A.3d at p. 55.) 15 To establish demand futility sufficient to survive demurrer, the complaint’s allegations must support a reasonable doubt that a majority of the board was disinterested because they breached their duty of loyalty. “[D]emand will be excused based on a possibility of personal director liability only in the rare case when a plaintiff is able to show director conduct that is ‘so egregious on its face that board approval cannot meet the test of business judgment, and a substantial likelihood of director liability therefore exists.’ ” (Citigroup, sup 2020(City of Birmingham, supra, 177 A.3d at p. 55.) 15 To establish demand futility sufficient to survive demurrer, the complaint’s allegations must support a reasonable doubt that a majority of the board was disinterested because they breached their duty of loyalty. “[D]emand will be excused based on a possibility of personal director liability only in the rare case when a plaintiff is able to show director conduct that is ‘so egregious on its face that board approval cannot meet the test of business judgment, and a substantial likelihood of director liability therefore exists.’ ” (Citigroup, sup | 1 | 2020–2020 |
In Re the Walt Disney Co. Derivative Litigation
green
2 sentences2015Ch. 2003) 825 A.2d 275, 286 .) “These rare cases include those in which a board decides to undertake illegal activity.” (Rosenbloom v. Pyott (9th Cir. 2014) 765 F.3d 1137, 1149 .) “The Rales test requires that the plaintiff allege particularized facts establishing a reason to doubt that ‘the board of directors could have properly exercised its independent and disinterested business judgment in responding to a demand.’” (Wood v. Baum (Del. 4 Even where the underlying conduct alleged in the complaint constitutes corporate wrongdoing, the Board retains the power to refuse to sue “if it deem[s] th 2015Ch. 2003) 825 A.2d 275, 286 .) “These rare cases include those in which a board decides to undertake illegal activity.” (Rosenbloom v. Pyott (9th Cir. 2014) 765 F.3d 1137, 1149 .) “The Rales test requires that the plaintiff allege particularized facts establishing a reason to doubt that ‘the board of directors could have properly exercised its independent and disinterested business judgment in responding to a demand.’” (Wood v. Baum (Del. 4 Even where the underlying conduct alleged in the complaint constitutes corporate wrongdoing, the Board retains the power to refuse to sue “if it deem[s] th | 1 | 2015–2015 |
Willa Rosenbloom v. David Pyott
green
2 sentences2015Ch. 2003) 825 A.2d 275, 286 .) “These rare cases include those in which a board decides to undertake illegal activity.” (Rosenbloom v. Pyott (9th Cir. 2014) 765 F.3d 1137, 1149 .) “The Rales test requires that the plaintiff allege particularized facts establishing a reason to doubt that ‘the board of directors could have properly exercised its independent and disinterested business judgment in responding to a demand.’” (Wood v. Baum (Del. 4 Even where the underlying conduct alleged in the complaint constitutes corporate wrongdoing, the Board retains the power to refuse to sue “if it deem[s] th 2015Ch. 2003) 825 A.2d 275, 286 .) “These rare cases include those in which a board decides to undertake illegal activity.” (Rosenbloom v. Pyott (9th Cir. 2014) 765 F.3d 1137, 1149 .) “The Rales test requires that the plaintiff allege particularized facts establishing a reason to doubt that ‘the board of directors could have properly exercised its independent and disinterested business judgment in responding to a demand.’” (Wood v. Baum (Del. 4 Even where the underlying conduct alleged in the complaint constitutes corporate wrongdoing, the Board retains the power to refuse to sue “if it deem[s] th | 1 | 2015–2015 |
Guttman v. Huang
green
2 sentences2013This looks like a first prong Aronson inquiry, [f] When, however, ... the directors face a ‘substantial likelihood’ of personal liability, their ability to consider a demand impartially is compromised under Rales , excusing demand.” (Guttman v. Huang (Del.Ch. 2003) 823 A.2d 492, 501 .) 7 The Insider Selling Defendants were Semel, Decker, Rosensweig, Nazem, Kem, Yang, Hippeau, Kozel, Kotick, Bostock, and Wilson. 8 The court had previously recognized the inadequacy of an allegation of insider trading based solely on the sale of stock while in possession of material nonpublic information, without 2013This looks like a first prong Aronson inquiry, [f] When, however, ... the directors face a ‘substantial likelihood’ of personal liability, their ability to consider a demand impartially is compromised under Rales , excusing demand.” (Guttman v. Huang (Del.Ch. 2003) 823 A.2d 492, 501 .) 7 The Insider Selling Defendants were Semel, Decker, Rosensweig, Nazem, Kem, Yang, Hippeau, Kozel, Kotick, Bostock, and Wilson. 8 The court had previously recognized the inadequacy of an allegation of insider trading based solely on the sale of stock while in possession of material nonpublic information, without | 1 | 2013–2013 |
Counted by distinct opinions that both name this issue and are annotated to the section; sections every opinion cites regardless of issue are not filtered here, so read the counts against the total above.
Opinions by the citing court's state. A doctrine retained in one state and abandoned in another shows up here as a year span that stalls.