California Derivative Plaintiffs Can't Dodge Delaware Law

Law360, New York (November 10, 2014, 10:41 AM EST) -- Under Delaware law, before a private plaintiff can file a derivative lawsuit against a corporation's officers or directors, he or she must either make a demand on the board or plead with particularity that it would be futile to do so.[1] On Oct. 2, 2014, the California Court of Appeal issued its decision in Jones v. Martinez, a shareholder derivative action filed against the officers and directors of Deckers Outdoor Corp., a Delaware corporation.[2] The decision is the first from a California appellate court to consider whether shareholders bringing demand futility derivative actions against Delaware corporations in California are entitled to discovery prior to establishing that demand would be futile....

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