General Business Business Torts Civil Procedure

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Northstar v. Schwab: The Ninth Circuit’s End Run Around Derivative Lawsuits in the Mutual Fund Context

It is well recognized that only investors have standing to sue a mutual fund on behalf of a class of investors and that a fiduciary duty claim accusing fund trustees of mismanagement is the property of the fund, and not of...more

Violation of Corporate Charter: Breach of Contract, Fiduciary Duties or Both

When a company takes action through its board in violation of its certificate of incorporation, may a plaintiff stockholder bring suit against the company directly for breach of its certificate—the most important of corporate...more

Delaware Supreme Court Clarifies That Section 102(b)(7) Charter Provisions May Be Basis For Dismissal At The Pleading Stage In...

On May 14, 2015, the Delaware Supreme Court clarified that, even in conflict-of-interest transactions subject to "entire fairness" review, breach of fiduciary duty claims against independent, disinterested directors should be...more

Delaware Supreme Court Confirms Exculpatory Clauses Have Teeth, and Can Be Used By Director Defendants At The Pleading Stage

In a decision with important implications for directors of public companies, the Delaware Supreme Court overturned two Chancery Court opinions and ruled that independent directors facing breach of duty of care claims arising...more

An Exercise of Business Judgment: Chancery Court Dismisses Shareholder Derivative Demand-Refused Case

Last week, Vice Chancellor Glasscock released an important decision dismissing a case under Rule 23.1 that was brought by a DuPont shareholder who alleged that the board improperly refused a demand to sue DuPont’s officers...more

Delaware Supremes Give Independent Directors a Way Out

In an opinion Thursday, the Delaware Supreme Court held that independent directors should be dismissed from shareholder derivative litigation – even over transactions presumptively subject to “entire fairness” review – unless...more

Sixth Circuit Refuses to Create a Cause of Action for Reverse Bad Faith

In an opinion handed down last week, the Sixth Circuit Court of Appeals refused to adopt a new cause of action under Kentucky law for a reverse bad faith claim by an insurer against its insured where the Kentucky Supreme...more

Allegations of Purposeful Data Withholding Do Not Trigger Cyber E&O Coverage

In Travelers Property Casualty Co. of America v. Federal Recovery Servs., Inc., Case No. 2:14-CV-170 TS (D. Utah May 11, 2015), the United States District Court for the District of Utah held that where a cyber liability...more

Middle District of Pennsylvania: Possibility of Bad Faith Exists Despite Payment of Claim Where Insured Alleges Untimely Claims...

Scheirer v. Nationwide Ins. Co. of Am., No. 3:13-CV-1397, 2015 WL 1013986 (M.D. Pa. Mar. 9, 2015). Middle District of Pennsylvania denies cross-motions for summary judgment on bad faith claim, holding that material...more

Franchisees Flatline in Case Against Doctors Express

On April 1, 2015, the U.S. Court of Appeals for the Third Circuit thoroughly shot down claims brought by franchisees of Doctors Express Franchising. Those claims asserted that Doctors Express misrepresented initial start-up...more

Middle District of Pennsylvania: No Bad Faith Where Insurer’s Brief Inspection Yielded Reasonable Basis to Deny Claim

Boulware v. Liberty Ins. Corp., No. 3:13-CV-1541, 2015 WL 1219283 (M.D. Pa. Mar. 17, 2015). After a portion of the insured’s deck collapsed, the insurer denied coverage based on a brief inspection without hiring an...more

Locke Lord QuickStudy: The Broader Lesson of the El Paso Pipeline Decision

Alternative entities, such as limited partnerships and limited liability companies, have an advantage over corporations because of the greater flexibility to define the terms of the arrangement by contract. ...more

Court Of Chancery Explains Creditor’s Right To File Fiduciary Duty Claims

While it is generally known that creditors may only file derivative suits when the company is insolvent, there have been many open issues about what exactly that means. This decision answers many of those questions by...more

Texas Insurers: Don’t Forget ‘Excessive Demand Doctrine’

With the onslaught of recent hail and other weather related litigation, insurance carriers routinely see excessive and unreasonable settlement demands in statutorily required presuit notice letters. The “excessive demand...more

California’s “Independent” Cumis Counsel Regime Faces A Novel Challenge

On May 5, the California Supreme Court will hear argument in a case that has the potential to profoundly change the relationship between the insurer, its insured and the insured’s independent defense counsel under Civil Code...more

An Interesting Trade Secrets Case From The Business Court

If you were unsure whether customer information held by your client -- like customer contact information, sales reports, prices and terms books, sales memos, sales training manuals, commission reports, and vendor information...more

All “Intentional Tort” Claims By Employees May Now Be Uninsurable

On March 12, 2015, the Supreme Court of Ohio issued a decision in Hoyle v. DTJ Enterprises, Inc., holding that an insurance provision that excludes coverage for acts committed with the “deliberate intent to injure an...more

Tennessee “As Is” Property Buyers Better Beware

A recent Tennessee Court of Appeals decision reinforces that parties to a contract are free to disclaim reliance on representations made by the other party. In Terry Pritchett v. Comas Montgomery Realty & Auction...more

More Developments on Section 75-1.1 and the Economic-Loss Rule

Our appetites, of course, are always whetted when section 75-1.1, the economic-loss rule, and the “substantial aggravating circumstances” doctrine intersect....more

Court Of Chancery Explains How To Prove Bad Faith

While not a corporate case, this decision is useful in explaining how to prove a party acted in bad faith so as to be outside the exculpation provisions of a trust or Sec. 102(b)(7). ...more

Tenth Circuit Court of Appeals Dismisses Failed Bank Shareholder Derivative Suit under FIRREA

On April 21, the United States Court of Appeals for the Tenth Circuit upheld the dismissal of a bank shareholders’ suit against a bank holding company – and its officers and directors – for breach of fiduciary duty. Barnes v....more

“The Good, the Bad and the Ugly”: Preparing Your Corporate Representative for Deposition

Recently, in Sciarretta v. Lincoln Nat’l Life Ins. Co., the Eleventh Circuit Court of Appeals affirmed monetary sanctions against a non-party corporation for the bad faith preparation of its designated corporate witness....more

Georgia Supreme Court: Insured Cannot Sue for Settlement Amount of Bad Faith Absent Insurer’s “Consent to Settle”

On April 20, 2015, the Georgia Supreme Court unanimously held that when an insured fails to seek its insurer’s consent to settle a claim, the insured cannot pursue litigation against its insurer to recover settlement amounts...more

UDAAP Council Weekly UDAAP Standards Report - 4/22/2015

Every week, courts around the United States issue decisions addressing aspects of civil UDAAP claims. In an effort to illuminate the UDAAP standards, below is a sampling of some of this week’s UDAAP decisions on the meaning...more

Implications of the U.S. Supreme Court Omnicare Decision

On March 24, 2015, the U.S. Supreme Court issued its decision in Omnicare, Inc., et al. v. Laborers District Council Construction Industry Pension Fund, et al., addressing when an issuer may be held liable for material...more

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