Filed October 29, 2012
Document #: 37 Filed: 10/29/12 Page 11 of 25 PageID #:2047 {Client Files/POT/01/00069252.DOCX } 7 law that directors of Delaware corporations have a fiduciary duty to disclose fully and fairly all material information within the board's control when it seeks shareholder action.”) (quoting Stroud, 606 A.2d at 84) (emphasis added); Loudon v. Archer-Daniels-Midland Co., 700 A.2d 135, 137 (Del. 1997) (“Delaware law of the fiduciary duties of directors . . . establishes a general duty of directors to disclose to stockholders all material information reasonably available when seeking stockholder action.”).
Filed September 10, 2012
Id. at 715 (quoting Loudon v. Archer-Daniels-Midland Co., 700 A.2d 135, 141 n.18 (Del. 1997); In re Cogent Inc. S’holder Litig., 7 A.3d 487, 509 (Del. Ch. 2010)).
Filed September 4, 2012
Delaware courts agree that federal law and Delaware law on the issue of disclosures are not the same. See Loudon v. Archer-Daniels-Midland Co., 700 A.2d 135, 141 n.18 (Del. 1997) (“the federal scheme of disclosure is not replicated in Delaware law”) (citation omitted); see also XTO Case 2:12-cv-05109-SRC-CLW Document 27 Filed 09/04/12 Page 8 of 11 PageID: 942 - 5 - Energy, 705 F. Supp. 2d at 577. As such, a Delaware court is not in the position to preside over Plaintiff’s claims here.
Filed January 24, 2012
Id. at 577 (quoting Loudon v. Archer–Daniels–Midland Co., 700 A.2d 135, 141 n. 18 (Del.1997)). It reasoned, moreover, that although the state actions sought the same relief and depended upon the same facts alleged in the federal action, because claims under the Securities Exchange Act could not be litigated anywhere but in a federal court, there was no way that a state court could dispose of those claims.
Filed January 22, 2010
C. The Complaint Does Not State A Claim For Breach Of The Duty Of Disclosure Against Any Of The Defendants In order to plead a breach of the duty of disclosure, which only applies when directors seek shareholder action, a complaint must: (1) allege that material facts were missing from a disclosure; (2) identify the missing facts; (3) explain why those facts are relevant to the decision shareholders were asked to make; and (4) explain how the omission caused shareholders’ injury. See Loudon v. Archer-Daniels-Midland Co., 700 A.2d 135, 141 (Del. 1997). As explained above, see Point III.A., supra, Plaintiffs have not pled a material misstatement or omission in the Proxy Statements.
Filed December 16, 2009
In order to successfully plead a breach of this duty, a complaint must: (1) allege that material facts were missing from a proxy statement; (2) identify Case 1:09-cv-07822-JSR Document 36 Filed 12/16/2009 Page 48 of 51 39 what those missing facts were; (3) explain why those missing facts are relevant to the decision shareholders were asked to make; and (4) explain how the omission caused the shareholders’ injury. See Loudon v. Archer-Daniels-Midland Co., 700 A.2d 135, 141 (Del. 1997). Under Delaware law, as under Section 14(a), “‘[a]n omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote.
Filed December 11, 2008
805 (Del. 1984) ........................................................................................................... 12, 14 In re Baxter Int’l, Inc. S’holders Litig., 654 A.2d 1268 (Del. Ch. 1995) .......................................................................................................... 5 Braddock v. Zimmerman, 906 A.2d 776 (Del. 2006) ................................................................................................................. 10 In re Freeport-McMoran Sulphur, Inc. S’holder Litig., No. Civ. A. 16729, 2005 WL 1653923 (Del. Ch. June 30, 2005) .................................................... 14 Gentile v. Rossette, 906 A.2d 91 (Del. 2006) ................................................................................................................... 11 In re InfoUSA, Inc. S’holders Litig., 953 A.2d 963 (Del. Ch. 2007) .......................................................................................................... 14 Loudon v. Archer-Daniels-Midland Co., 700 A.2d 135 (Del. 1997) ................................................................................................................. 11 Malpiede v. Townson, 780 A.2d 1075 (Del. 2001) ................................................................................................................. 6 Michelson v. Duncan, 407 A.2d 211 (Del. 1979) ................................................................................................................... 8 Rales v. Blasband, 634 A.2d 927 (Del. 1993) ................................................................................................................. 12 Spiegel v. Buntrock, 571 A.2d 767 (Del. 1990) ................................................................................................................... 9 Tooley v. Donaldson, Lufkin, & Jenrette, Inc., 845 A.2d 1031 (Del. 2004) ............................................................................................................... 11 In re Tri-Star Pictures, Inc.,
Filed November 24, 2008
Fin. Servs. Inc., 500 U.S. 90 (1991)................................................................ 46 Kohls v. Duthie, 791 A.2d 772 (Del. Ch. 2000)............................................................................ 59 v Case 1:08-cv-07650-DLC Document 64 Filed 11/24/08 Page 6 of 77 Kramer v. Time Warner Inc., 937 F.2d 767 (2d Cir. 1991) ...................................................... 7, 22 Laborers Local 17 Health and Benefit Fund v. Philip Morris, Inc., 191 F.3d 229 (2d Cir. 1999)............................................................................................................................ 31 Lapidus v. State, 2008 WL 4742911 (N.Y.A.D. 2d Dept. 2008).................................................. 66 Lawson v. Krock, 1973 WL 126660 (4th Cir. 1973) .................................................................... 60 Lerner v. Fleet Bank, N.A., 459 F.3d 273 (2d Cir. 2006) ....................................................... 34, 37 Loudon v. Archer-Daniels-Midland Co., 700 A.2d 135 (Del. 1997)............................................ 63 Loveman v. Lauder, 484 F. Supp.2d 259 (S.D.N.Y. 2007)..................................................... 49, 51 Malpiede v. Townson, 780 A.2d 1075 (Del. 2001)....................................................................... 43 Manson v. Stacescu, 11 F.3d 1127 (2d Cir. 1993)........................................................................ 63 McCall v. Scott, 239 F.3d 808 (6th Cir. 2001).............................................................................. 58 MDS Investments, L.L.C. v. State, 138 Idaho 456, 65 P.3d 197 (Id. 2003) .................................. 17 Metro Communication Corp. BVI v. Advanced Mobilecomm Techn., Inc., 854 A.2d 121 (Del. Ch. 2004) ......................................................................................................................................... 44 Michelson v. Duncan, 407 A.2d 211 (Del. 1979) ..................................................................