The Honor able William O. Be rtelsman, United States District Court for the E astern D istrict * of Ke ntucky , sitti ng by

desig nation. NO T RE CO M M EN DE D F OR F UL L- TEX T P UB LIC AT ION F ile Nam e: 09a0035n.06 F iled: Janu ary 16, 2009 No. 07-4067 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT
ROBERTA CASDEN, Derivativ ely on Be hal f of Da na C or por at ion , Pl ain tif f- App e lla nt

, v. MICHAEL J. BURNS; ROB E RT C. RICHTER; et al. Def endants-Appellees . ) ) ) ) ) ) ) ) ) ) ) ) ) ) ON AP P EA L F ROM THE U NI TED STA TES DI STR IC T CO UR T F OR THE NO RT HER

N D ISTRIC T OF OHI O
O P I N I O N

Before: BOGG S, Chief

Judge; CLAY, Circuit Judge; and BERTEL SMAN, District Judge. *
CL AY , Ci rcuit Judge. L i k e s e v e r a l o t h e r c a s e s p e n d i n g b e f

o r e v ar i o u s c o u rt s , t h i s c a se arises out of the financ ia l c o ll a pse of a utomotive parts deale r Da na Corporation (“Da

na”) . Following the c omp any ’s c oll a

ps e in 2 00 5, Da

na ’s sh are ho lde rs ini tiate d a numbe r o f c la ss a c tio n s uit s a g a ins t Dana and its office rs and dire ctors. In this c as e, Plaintiff Roberta Casden ( “Casden” ) alleg es that a number of Dana’s officer s and directors breache d their fiducia ry duty to Dana’ s share holders. One day afte r Casden f

iled her or igina l complaint asserting a number of derivative claims, however, Da naNo. 07-4067

Casden v. Burns

- 2 - filed a p e ti ti o nf

o r Ch a p te r 1 1 b an kr u p tc y r e li e f
. A s a r e s u lt o f th e b an kr

u p tc y f il in g , th e d is tr ic t court a utomatically

stay ed Casden’ s derivative c laims. Casden then proceede d to amend her
c omp la int to a sse rt a ne w c la ss- a c tio n c la im ( “ Count I ” ) a lle g ingbr e a c h o f f idu c iary du ty un de r s tate law ag ainst Dan a’s officer s and direc tors. Def endants jointly

moved to dismiss the complaint pursuant to Rules 12(b)( 1) and 12( b)(6) of t he Feder al Rules of C ivil Procedur e. The district cour t enter ed an or der dismissing Casde n’s claim. This appe al followed.
For the re asons set for

th below, we he reby

aff irm the judg ment of the district cour t.
I.
Dana is a supplier of a

utomotive parts and drive -train sy stems for lig ht, commerc ial, and off- highw ay

vehicle ma

nufac turers. B ased on a

series of positive financial state ments, the value of Da na ’s sto c k s te a dil y

inc re a se d thro ug ho ut 2 00 4 a nd int o 2 00 5, un til Da

na qu ic kly fe ll i nto financ ial ruin beg inning in September of 2005.
I n a se ri e s of anno un c e me nts c omm e nc ing on Se pte mbe r 1 5, 20 05 , D ana a dv ise d th e pu

bli c that it ha d ide nti fi e d mate ri a l we a kn e sse s in its int e rn a l c on tr ol o ve r f ina nc ia l r e po rt ing , p ri mari ly in the acc ounting pr ocedur es of Da na’s Commerc ial Vehicle Sy stems Division. After advising the public that its re cent financ ial repor ts c ould no longe r be relied on, Dana ’s Audit Comm ittee eng ag ed inde p e n d e n t c o u n s e l an d f o r e n s ic a c c o u n ta

n ts to inv e s ti g a te th e matt e r . T h e r e s u lts of tha t investigation led Dana

to restate its financ ial repor ts for the fir st and second qua rters of fiscal y ear 2005, as we ll as all of fisca l y ear s 2002 throug h 2004. Dana also announc ed that the investig ationNo. 07-4067

Casden v. Burns

De fe nd ant s po in t out that no ne of the ind ivi du a l D e fe nd ants are c ur re ntl y a ff ili a te d w ith 1 Dana . Def

enda n t R ichter r etired f

rom Dana

on Marc h 6, 2006, shortly afte r Da na filed f

or ba nk ru ptc y . O n Jan

ua ry 31 , 2 00 8, the date that D ana ’s ba nk ru ptc y re or g anizatio n p lan b e c a me eff ective, the Def

endant Dir ector s resig ned fr om Dana’ s Boa rd of Dir ector s and De fenda nt Burns resig ned fr o m his board and e x ecutive positions. See I n re Dana Corp. , N o . 0 6

- 1 0 3 5 4 , 2 0 0 7 WL 4589331, at *8 (B ankr. S.D.N.Y . Dec . 26, 2007). - 3 - had uncove red de ficienc ies in its financial re porting . The mar ket re action wa s s wi ft and unkind, with Dana’ s stock price dropping near ly 35% in one da

y on rec ord tradingvolume.
F oll ow ingDa

na ’s c oll a ps e , D ana ’s sh are ho lde rs ini tiate d s e ve ra l c la ss- a c tio n su its a g a ins t Dana and its office rs and dire ctors. See, e .g. , Frank v. D ana Corp. , 547 F.3d 564 ( 6th Cir. 2008). I n this case, Casde n alleg es t hat a number of D ana’ s office rs and dire ctors bre ache d their fiducia ry duty to Dana’ s share holders. On Ma rch 2, 2006, Casde n broug ht suit i n the district court a sserting derivative claims on beha lf of Da na and its shar eholder s. The n ex t day , howeve r, Da na filed a petition f or re lief under

Chapter 11 of

the U.S. Ba

nkruptcy Code. As a r esult of Dana ’s bankr uptcy filing, the district court automatica lly stay ed Casden’ s derivative c laims. On August 15, 2006, Casden filed a se cond ame nded complaint asse rting a new class-a ction direc t claim al l egi ng brea ch of f iduciary duty under state law ag ainst a number of Dana ’s offic ers and dire ctors. Specifica lly , Casden alleg es that De fenda nts failed to exercise due car e and bre ache d 1 their du t i es o f l oy alty , g ood faith, and inde pendenc e by g rossly mismanag ing the company and failing to “protec t ag ainst the numerous c onflicts of intere st re s u l t i ng from their ow n int e rr e la tio ns hip s or c on ne c tio n wi th the ba nk ru ptc y .” (J.A
. 21 5. ) Al tho ugh n ot ex pre ssl y
art ic ulate d in

the c omp la int , Ca sd e n’ s b ri e f t o th is C ourt a lle g e s th a t D e fe nd ants fo rc e d D ana int oNo. 07-4067

Casden v. Burns

- 4 - bankrupt c y

p r im ar il y

to s h ie ld th e ms e lv e s f

r o m p o te n ti a ll y

s ig n if ic an t p e r s o n a l l ia

b il it y in the numerous civil ac tions arising out of D ana’ s financia l collapse. Specif ic a ll y , Co u n t I , Ca s d e n ’ s n e w “ d ir e c t” c la im , a ll e g e s th a t D an a ’ s s h ar e h o ld e r s have been “uniquely harme d” by the petit ion for bankruptcy beca use, among other things, class members have be en “r eleg ated to a lowe r priority of debt” and have bee n “for eclos[ed] . . . from protecting the interests of Da

na ag ainst the misconduct of the Company ’s offic ers a nd direc tor s.” (J.A. 215.) Elsewher e in the complaint, Casden cla ims that the losses suffere d by members of

the share holder class we re “ in the form of a decline in the pr ice of their share s befor e and afte r def endants c aused Dana to file the petition for ba

nkruptcy .” (J.A. 156.)
On Octobe r 27, 2006, De fenda nts joint ly moved to dismiss Count I of the ame n d e d c o mpla int pursuant to Rules 12(b)( 1) and 12( b)(6) of the F eder al Rules of C ivil P roce dure. D efe ndants’ motion argued that Count I was derivative in nature and thus Casden was prec luded from asser ting suc h a claim, and that fede ral ba

nkruptcy laws pre empted the state laws on which Casde n based he r bre ach of fiducia ry duty claim.
On J uly 13, 2007, the di strict court entered an order di smissi ng Casden’s br eac h of fiducia ry duty claim. Casden v. Burns , 504 F. Supp. 2d 272 (N.D . Ohio 2007). In that order , the district court did not dism iss or otherwise a ct on Casden’ s stay ed der ivativ e claims . I n enter ing judg ment on Def endants’ motion, howeve r, the district court ordere d the ca se “c losed.” The district court’s docket indicates that the ac tion was “ter minated” on the sa

me date. T his appea l followed.No. 07-4067

Casden v. Burns

- 5 - II.
Def endants c ontend that thi s C ourt lacks jurisdiction to consider this appe al bec ause the district court’s orde r did not constitute a final order resolving all of C asden’ s claims. I n particula r, Def endants point to the fac t that Casden’s derivative claims were stay ed by order of the district cour

t on J une 29, 2006, and that those claims have never been dismissed or withdra wn. We conclude that the district c ourt’s order dismiss ing Casden’s amende d complaint constitutes a “fina l decision” for purposes of § 1291, a

nd thus supports appellate r eview.
A.
Casden asser

ts that this Court has jurisdiction under 28 U.S.C. § 1291, which provides that “the c ourts of a p p ea l s ... s h all have jur isdiction of appea ls from all final dec isions of the district courts of the United States.” Although there is “ no statute or rule that specifie s t h e e s s en t ial elements of a

final judg ment,” United States v. F. & M. Schae fer Brewing Co. , 356 U.S. 227, 233 (1 95 8) ; McD ermott v. United States , 9 5 4 F
. 2 d 1 2 4 5 , 1 2 4 9 ( 6 th Ci r . 1 9 9 2 ) ( “ T h e r e is no rule or statut e that pr e sc ri be s e xac tly wh a t f or m a [fi na l] ju dg me nt m us t take .” ), a jud g me nt g e ne ra lly

is considere d “fina l” for purposes of § 1291 if it “‘ends the litigation on the mer its and leave s nothing for the c ourt to do but e x ecute the judgme nt.’” Va n Ca uwe nb e rg hev . B iar d , 486 U.S. 517, 521-22 (1 9 8 8 ) ( qu o t i n g Catli n v. United States , 324 U.S. 229, 233 (1945)).
T h e f u n d am e n t a l r a t i o n a l e u n d e r l yi n g t h e “ f i n a l d e c i s i o n ” p r e r e qu i s i t e i s j u d i c i a l e c o n o m y: pe rm itt ingon ly

a sin g le re vie w of a ll i ssu e s avo ids the wa ste of tim e and re so ur c e s w hic h in e vit a

blyNo. 07-4067

Casden v. Burns

- 6 - would result if p i ec emea l appea ls were permitted. See Paliaga v. Luckenbac h S.S. Co. , 301 F.2d 40 3, 40 6- 07 (2 d Ci r. 19 62 ). To that e nd , th e Sup re me Cou rt ha s in str uc te d th a t § 1 29 1’ s f

ina lity require ment is to be g iv en a “ prac tical rather than a technica l construction.” Cohen v. Be neficial Indus. Loan Corp. , 3 37 U. S. 5 41 , 5 46 (1 94 9) ; see also Fiataruolo v. United States , 8 F.3d 930, 937 (2d Cir. 1993) (“ Finality

is determined on the ba sis of prag matic, not needle ssly rig id pro forma , ana ly sis . T his a

pp ro a c h b e tte r s e rv e s th e ov e rr idi ng a im o f the F e de ra l Ru le s o f C ivi l Pr oc e dure to dispose expeditious ly

and inexpensively

of eve ry action.”)
. I n Schaefe r Brewing , the S upreme Court examined severa l fac tors in determining whether a district cour

t’s judgme nt was final. 356 U.S. at 231- 35. I n ap p l y i n g Schaefe r Brewing , and consistent wi t h t h e pra g matic appr oach to f inality , this Court has emphasized that, “[p] rimarily , a revie wing court should consider whether the t rial j udg e has or has not clea rly decla red his intention that his opinion embody

a fina l decision, or whe ther a ll of the elements nece ssary for a final dec ision
are prese nt in a g iven o rd er or opinion.” Advanc ed Ac cessory Sys., LLC v. Gibbs , 7 1 F e d
. A p p x. 454, 459 (6th Cir. 2003) (interna l quotation marks and citations omitted).
B.
Def endants a rg ue that the district cour

t’s order dismiss ing the fiduciar y duty claim is not an
a pp e a la ble fi na l or de r be c a

us e Ca sd e n’ s de ri vativ e c la ims are sti ll pe nd ing be fo re the dis tr ic t c ourt
. Casden re sponds that any jurisdict i o nal issue has be come moot bec ause D ana’ s now-appr oved Chapter 11 reor g anization plan provides for the canc ellation of all of Dana ’s pre- petitio n s t ockNo. 07-4067

Casden v. Burns

Be cause Virg inia law re quires con tinuous stock ownership for a plaintiff to maintain a 2 derivative action, the ca

ncellation of Casde n’s stock ef fec tively exti ng uishes her r ight to pursue any derivative claims. See F

irestone v. W

iley , 485 F. Supp. 2d 694, 700-01 (E .D. Va. 2007)
. - 7 - eff ective J anuar

y 31, 2008. De fe n d an t s n o n et h el ess contend that, under A TA C Co r p . v . Arthur 2 Treacher’ s, Inc. , 280 F.3d 1091 ( 6th Cir. 2 0 0 2 ), Casden’s a ppeal should be dismissed for la ck of jurisdiction because the district court ha s y et to enter an orde r disposing of

those claims.
I n ATAC , the plaintiff appea led from the district court’s order “p erpe tually staying f urther proce eding s and closing the . . . case subject to r eopening for g ood cause shown upon written motion by either pa rty , afte r completion of the a rbitration proc ess.” Id. a t 10 94 . T he de fe nd ant m ov e d to dismiss th e a

p p e a l f o r la c k o f ju

r is d ic ti o n , ar g u in g th a t th e d is tr ic t c o u rt’ s o r d e r s ta yin g the proce eding s pending arbitration was n o t a “f inal” orde r. Concluding that “the stay order . . . was interlocutory rathe r than final,” the ATA C Court held t hat di strict court’s or der “ is not appeala ble.” Id. at 1098.
Def endants’ relianc e on ATA C is misplace d. Unlike ATAC , Casden appe als from the or der dismiss ing he r bre ach of fiduciar y duty claim, n o t fr om the district court’s orde r staying he r derivative claims. That distinction is crucial be cause all parties a g ree that the appr oval of Da na’s bankruptc y

reor g anization plan canc elled C asden’ s stock, and thus extinguished her rig ht to bring derivative claims on beha lf of Da na. C onsequently , the di strict court’s July 13, 2007 order

dismiss ed Casden’s only re m ai n ing via ble claim in this case. T he district cour t’s dismiss al orde r thus constitutes a final judg ment supporting a ppeal, notwithstanding the fa ct that C asden’ s now-def unctNo. 07-4067

Casden v. Burns

- 8 - derivative claims technic ally are still stay ed. See M

orton Int’l v. A.E. Staley

Mfg. Co. , 460 F.3d 470, 47 7- 78 (3 d Ci r. 20 06 ) ( “ a c a se dis mis se d w ith ou t pr e jud ic e that c ann ot be re ins tate d is in t he same position as a case dismiss ed with pre judice in that both case s have r eac hed fina lity ”).
M o re o ver, the district court’s judg ment order ed the c ase “ closed,” and the district cour t’s docket lists the action as ha ving be en “te rminated” on the same date. I n light of these ac tions, we
are satisfied that t h e d i s t ri ct court plainly intended the dismissal order at issue her e to be its final action in this case. A s the Supreme Court has long recog nized, “no form of words a nd no peculiar formal a ct is nece ssary

to evince [the] rendition [ of a f inal judgme nt] .” Un ite d Sta te s v . H ar k , 320 U.S. 531, 534 (1944). See also Paliaga v. Lucke nbach S.S. Co. , 301 F.2d 403, 407 ( 2d Cir. 1962) (“Ne ith e r t

he us e of sp e c if ic wo rds no r t

he do ingof

any pa rt ic ula r a c tio n b y

the tr ia l ju dg e is
ne c e ssa ry in o rd e r t o s ig nif

y that he ha s ma de his fi na l jud g me nt. ” ). Ra the r, it is ne c e ssa ry on ly “ to deter mine whether

the languag e of the opinion embodies the essential elements of a judgme nt
. . . and cle arly

evidenc es the judg e’s intention that it shall be his final act in the case.” Schaefe r Brewing Co. , 356 U. S
. at 2 3 2. Se e als o D iaz -R e y es v . F ue nte s- Or tiz , 471 F.3d 299, 301 ( 1st Cir. 20 06 ) ( dis mis sin g a

pp e a l f or la c k o f j ur isd ic tio n e ve n th ou g h judg me nt ha d be e n en te re d und e r R ule 58 beca use “the district court’s order re v ea l s t h at the cour t did not int end this order to be a f inal jud g me nt d isp os ingof

the lit ig a tio n” ); Goodwin v. United States , 67 F.3d 149, 151 ( 8th Cir. 1995) (re quiring only “some clea r and unequivoca l ma

nifestation by the [di strict] cour t of its be lief that the de c isi on ma de , so fa

r a s the c ourt is c on c e rn e d, is the e nd of the c a se .” ); Paliaga , 301 F.2d at 407No. 07-4067

Casden v. Burns

- 9 - (re quiring only

“that ther e be some manifestation by the judg e that it is his intention that the dec ision he make s is his final act in the ca se”)
. I n this case, i t i s ev i d ent t hat the district cour t intended its dismi ssal order to be its final j u d gment and lea

ves no issues pendingfor f urther pr ocee dings. A ccor dingly , this Court has jur isd ic tio n to he ar C a sd e n’ s a pp e a l be c a

us e the dis tr ic t c ourt ’s or de r a nd e ntr y of jud g me nt c le arl y evince d its int ention that this would be its “ final act in the case .” Schaefe r Brewing , 356 U.S. at 233.
III .
I n dismiss ing Ca sden’s state law breac h of fiduciary duty claim, t he district cour t held that the claim wa s not ripe for r eview, c oncluding that the claim “would not be ripe at least until a plan for r eorg anization were ap p ro v ed in Ba nkruptcy Court.” Casden , 504 F. Supp. 2d at 279. At the time Casden filed he r ame nded comp l ai n t , i t was uncle ar w hether or to what e x tent Dana ’s bankruptc y

filing w ould a ffe ct share holder rig hts. Thus, to the ex tent that Casden soug ht rec overy b as edo nl o s ts h ar eh o l d er

ri gh t s , C as d en ’s cl ai m s we re s p ec u l at i v e. W h i l e t h i s ap p ea l wa s p en d i n g, howeve r, Da

na’s ba nkruptcy reor g anization plan was appr o v e d a n d th u s a llD a n a ’ s pre- petition stock
was c ance lled eff

ective January

31, 2008.
I n light of this interve ning c hang e in circ umstances, we conclude that Casden’s c laim is now ripe for judicial revie w.No. 07-4067

Casden v. Burns

- 10 - A. The Supreme Court has stated that the “basic rationale ” of the ripe ness doctrine “is to preve nt the courts, throug h premature adjudication, from entang ling themselves in a bstract disag ree ments.” Abbott Laboratories v. Gardne r , 387 U.S. 136, 148 (1967). This Court has set out thre e fa ctors that
are c e ntr a l to the ri pe ne ss i nq uir y :
F ir st, we e xami ne the lik e lih oo d that the ha rm a lle g e d by the pla int if

fs wi ll e ve r c ome to p a ss. Se c on d, we c on sid e r wh e the r the fa c tua l r e c or d is su ff ic ie ntl y de ve lop e d to produce a fa ir adjudication of the merits of the pa rties; respe ctive cla ims. Finally , we must assess the hardship to the pa rties if judicial re lief is denied at t h i s s t age in the pr oc e e din g s.
A d u l t V i deo Ass’n v. United States Dep’ t of Justice , 7 1 F
. 3 d 5 6 3 , 5 6 8 ( 6 th

Ci r . 1 9 9 5 ) ( qu o ta tion marks and c itations omi tted). The f irst fac tor ref

lects the fa ct that “[r]ipeness, while often spoken of as a justiciabilit y

doctrine distinct from standing , in f act share s the constitutional requireme nt of standing that an injury

in f act be cer tainly impending.” Nat’l Tr easury Em ployee s Union v. United States , 101 F.3d 1423, 1427 (D.C. C ir. 1996). The last two considerations, on the other ha nd, ref lect the “pr udenti al aspec t of ripene ss.” Id. at 1427-28. As this Court has noted, the r ipeness inquiry inc lu d e s c o n s id e r a ti o n s th a t r e qu ir e “ th a t t h e c o u rt e xe r c is e it s d is c r e ti o nto d e te r mi n e if ju dicial resolution would be desirable under a ll of the circ umstances.” Brown v. Ferro Corp. , 763 F.2d 798, 801 (6th Cir. 1985).
I n deter mining the “ likelihood” that an injury will come to pass, the Supreme Court has madeNo. 07-4067

Casden v. Burns

I n her c oncurr ence in Re no v . Cath oli c So c . S e rv s. , 509 U.S. 43 (1993), Just ice O’ Connor 3 explained that, “[i] f it is ‘inevitable’ that the c halleng ed rule wi l l ‘o p erate’ to the plaintiff’ s disadvantag e—if the c ourt can make a firm prediction that the pl aintiff will apply for the be nefit, and that th e a g e nc y wi ll de ny the a pp lic a tio n b y

vir tue of the ru le —th e n th e re may we ll b e a jus tic ia ble controve rsy

that the cour

t may find prudent to re solve.” Id. at 68 (O’ Connor, J ., concur ring ). - 11 - clea r that “[o]n e does not have to awa it consummation of threate ned injury to obtain preve ntive relief .” Blum v. Y

aretsky , 457 U.S. 991, 1000 (1982). B ut such claims g ener ally involve a plaintiff seekingdecla

rative or injunctive relief

from future events. In any event, to satis fy

constitutional require ments a threa

tened injury

must be sufficiently

“imminent.” Nat ’l

Tre as ur y , 101 F.3d at 1428. For example, in the Regional Rail Re organization Act Cases , 419 U.S. 102 (1974), the Court dee med ri pe an a c tio n b ro ug ht b y e ig ht m a jor ra ilr oa ds c ha lle ng in g t he conve y anc e of the ir pr op e rt y to Conrail. Although a reor g anization plan had not yet been formulated and a specia l c ourt had not y et order ed the conveyance s, the Court r easone d that “whe re the ine v ita bil ity of the op e ra tio n o f a statut e ag ainst cer

tain individuals is patent, it is irrele vant t o the exist ence of a justiciable c ontroversy that there will be a time delay befor e the disputed provisions will come into eff ect.” Id. at 1 43 3 (empha sis added). A lthough not re q u i ri n g “i nevitability ,” this Court has held that a c laim is ripe when it is “hig hly

probable ” that the a lleg ed har m or in j u ry wi l l occur . See Kardules v . City of Columbus , 95 F.3d 1335, 1344 ( 6th Cir. 1996).
I n deter mining whe ther c hang es in circ umstances that occur over the cour se of the litig ation aff ec t t h e ripene ss inquiry , the Supreme Court ha s decla red that “ripene ss is peculiarly a question of timing,” and thus, w here a “cha ng e in c ircumstance has substantially altere d the posture of t he
case as re g ards the maturity of [plaintiff’s claims,] . . . it is the situation now rathe r than the situationNo. 07-4067

Casden v. Burns

I n Reno v . Ca tho lic So c . S e rv s. , howeve r, the Supreme Court rea ched a seeming ly

contra ry 4 result, holding that a claim is not fit for judicial conside ration if the alleg ed inj ury is not ripe at the tim e of fi lin g , e ve n if

it “ wo uld

ri pe n” a t so me po int

in t he fu tu re. 50 9 U. S. at 59 (“ I n th e se circ umstance s , t h e p romulg ation of the c halleng ed re g ulations did not i tself g ive ea ch CSS and L UL AC class member

a ripe claim; a cla ss member’s c laim would ripen only o nce he took the a ff ir mati ve ste ps that he c ou ld t a ke be fo re the I NS b loc ke d h is p a th b y

a pp lyingthe re g ulatio n to him .” ). Re

je c tin g thi s a

pp ro a c h a s “ inc or

re c t law ,” Justi c e O’ Conno r ar g ue d in her c on c ur re nc e in Reno that the relevant question “is not whether the class members’ claims wer e ripe at the ince ption of these suits,” but rather whe ther the cl ai m s “bec ame r ipe” ove r the c ourse of the litigation. 509 U.S. at 73 (O’Connor, J., concurr ing)
. - 12 - at the time of the D istrict Court’s decision that must gove rn.” Reg’l Rail Reorganizati on Act Cases , 4 419 U.S. at 139-40. Ac c or d Buck ley v . Valeo , 424 U.S. 1, 114-18, (1976) ( per c uriam).

B.
I n d ism iss ingCount I , th e dis tr ic t c ourt sua sponte held that Casden’ s claim was not ripe for revie w bec ause the eff

ect of the bankruptcy proce eding on share holders was unknown at the time. Specifica lly , the d i s t ri ct co urt noted that it was possible that share holders could “ reta in the exact le ve l of ow ne rs hip the y ha d be fo re the c omp any fi le d for Cha pte r 11, or e ve n . . . e njo y an in c re a se in the value of their share s as a result of reor g anization.” Casden , 504 F . Supp . 2d at 279 . B e c a us e the e ff e c t of Da na ’s ba nk ru ptc y fi lin g on the va lue of

Ca sd e n’ s st oc k a

nd the ri g hts that atta c he d to he r s ha re ho lde r i nte re st w e re un c e rt ain at the tim e of fi lin g , th e dis tr ic t c ourt ’s ri pe ne ss deter mination may

have be en cor

rec t. See NRA of Am. v . Magaw , 132 F.3d 272, 284 (6th Cir. 1997) (“Ripene ss becomes a

n issue when a

case is anchore d i n fu t u re events that may not occur

as anticipated, or

at all.”)
.No. 07-4067

Casden v. Burns

- 13 - Now, howeve r, the intervening approva l of Dana ’s bankruptc y reor g anization plan canc elled Casden’s stock. In light of this cha ng e in circ umstances, the e ffe ct of the bankruptc y plan on Dana ’s share holders is no long er unc erta in. As a re sult, Casden’s claims have become ripe.
T h e “b as i c ra t i o n al e” b eh i n d t h e ri p en es s d o ct ri n e “i s t o p re v en t t h e co u rt s , t h ro u gh p re m at u re ad

j u d i ca t ion, from entang ling themse lves in abstrac t disagree ments,” A b b o tt Laboratories , 387 U.S. at 148, such as when a dispute is premised on “conting ent future events that may not occur
as an t i ci pated, or

indeed may

not occur

at all.” Thomas v. Union Carbide Agric. Prods. Co. , 473 U.S. 568, 580-581 (1985) ( quotation marks omitted). I n this c ase, howeve r, Dana ’s re org anization plan has been approved, and thus Casden’s claims no longe r involve “a bstract disag ree ments” and there no longe r is a conc ern that her alleg ed inj uries “may not occur as anticipated.” On January 31, 2008, the date D an a’ s re o rg anization plan became ef fec tive, Dana ’s pre -bankr uptcy share s were
c anc e lle d a

nd , a s a re su lt, Ca sd e n a

nd oth e r s ha re ho lde rs los t the va lue of the ir sto c k a nd a ll r ig hts attache d there to. Given t hat the alleg ed injuries now a re a rea lity , there is no constituti onal problem wi th j ud ic ia l a dju dic a tio n o f C a sd e n’ s c la im. No r d oe s p ru de nc e jus tif y dis mis sin g Ca sd e n’ s c la im.
We theref ore hold that Casde n’s claim is now ripe f or adjudication.
IV.
We next consider whether Casden’s state law claim is in fac t a derivative claim and theref ore should be dismissed.No. 07-4067

Casden v. Burns

Contrary to Ca sden’s contention, the standard a nnounced in Conley v. Gibson , 355 U.S. 41, 5 45-46 (1957) , that a complaint shoul d not be dismissed for fa ilure to state a c laim “unless it appea rs beyond doubt

that th e pla int if

f c an p ro ve no se t of fa c ts i n s up po rt of his c la im w hic h w ou ld e nti tle him to relief,” w as “r etire[d]” by the Court in Twombley . 1 27 S. Ct . at 19 68 -6 9 ( no tin g that Conley ’s “no set of f

acts” lang uag e “has been questioned, criticized, and ex plained aw ay long e noug h,” and is “best forg otten”). - 14 - A.
Th e pr op ri e ty

of a dis mis sa l pu

rs ua nt t o F e d. R. C iv. P. 1 2( b) is a qu e stion of law that is subject to de novo revie w. Du by v . W e lls , 5 06 F .3 d 4 22 , 4 27 (6 th C ir . 2 00 7) ; Bo v e e v . Co op e rs & Lybrand C.P.A. , 2 72 F .3 d 356 , 360 (6 th Cir . 200 1) . In r e vie wi ngCa sd e n’ s c la ims , th e Court “ mus t construe the complaint in a light most favor able t o t h e p l ai n tiff, and a cce pt all of [the] fac tual alleg ations as true. When an alleg ation is capa ble of more than one infe renc e, it must be construed i n t h e plaintiff’ s favor .” Bloch v. Ribar , 1 5 6 F
. 3 d 6 7 3 , 6 7 7 ( 6 th

Ci r . 1 9 9 8 ) ( in te r

n a l c it a tion omi tte d) . T o s ur

viv e a mot ion to dis mis s, the c omp la int mus t a lle g e g ro un ds e nti tli ngpla int if f t o
re lie f, wh ic h r e qu ir e s “ mor e tha n la be ls a nd c on c lus ion s [or ] a fo rm

ula ic re c itatio n o f t

he e le me nts of a c ause of

action.” Be ll A tl. Cor

p. v . Two mb ly , 550 U.S. 544, 127 S. Ct . 1955, 1964-65 (2007)
. The “[f] actua l alleg ations must be enough to raise a right to relief above the speculative level.” Id. 5 at 1965.
B.
Whether Casden’ s claim is direct or de rivative is g overne d by the law o f Vi rg inia, Dana ’s state of incor

poration. See B u rks v. L a sker , 441 U.S. 471, 479 (1979); In re Ge neral Tire andNo. 07-4067

Casden v. Burns

- 15 - Ru bb e r Co . S

e c . Li t. , 726 F.2d 1075, 1080- 81 (6th Cir. 1984). The Supreme Court of Virg inia h as held that “[a] shareholder ordinarily

cannot, a s an ind ivi du a l a s d ist inguis he d f ro m a re pr e se ntativ e of

the c or po ra tio n, su e dir e c tor s or oth e r c or po rate office rs for mismana g ement, neg lige nce o r t he like, on a c ause of action which be longs to the corpor ation.” Simmons v. Miller , 5 44 S.E .2 d 6 66 , 6 74 (V a . 2 00 1) (c itatio n o mitte d) . In s uc h c a se s, “[t] he re medial rig hts of minority share holders with re spect to wrong s commit t ed against the
c or po ratio n by the of

fi c e rs and dir e c tor s in the mana g e me nt of c or po rate a ff a ir s a re de ri vativ e ri g hts and any action tak en b y t he shar eholder s to redre ss such wrong s must be for the be nefit of the corpor ation.” Id. (citation omitted). Acc ording ly , “under Virg inia law, a sha

reholde r may

not direc tly bring suit ag ainst an off

icer or direc tor for br eac h of fiducia ry duty .” Ga br ie l v . P re ble , 396 F. 3 d 1 0 , 1 2 (1 s t C i r. 2 0 0 5 ) ( ci t i n g Simmons , 544 S.E.2d at 675). Acc ord Parsch v. M assey , 72 Va. Cir. 121, 128; 2006 Va. C i r. L EXI S 304 (Va. Cir. Ct. 2006) (“T he injury resulting from the De fe nd ants ’ a lle g e d [breach of fi du c iary du ty ] is to [the c or

po ratio n] and

[thu s] th e a

pp ro pr iate
reme dy would flow to the cor

poration, not the shar eholder s.”).
Under Virg inia law, such c laims are d er i v at i v e in nature eve n wher e the a lleg ed mis manag eme nt ca

us e d th e va lue of

the c omp any ’s sh are s to de c lin e in v a lue , o r e ve n b e c ome worthless. See Parsch , 72 Va . Cir. a t 128 ( “ L os s o f s ha re va lue is a

c la ssi c de ri vativ e c la im. ” ); Ga ff

v . F DIC , 81 4 F .2 d 3 11 , 3 17 -1 8 ( “ We s imp ly c on c lud e that da

ma g e s r e su lti ngfr om d ir e c tor s’ misconduct which mer ely consist of the diminishment or destruction of the value of corpor ate stock do not qualify as a direc t or personal injury to a share holder[.] ”), vacate d in part on other groundsNo. 07-4067

Casden v. Burns

- 16 - on reh’g , 828 F.2 d 1 1 4 5 (6 t h C i r. 1987). I n other wor ds, as this Court has rec og nized in other contexts, “‘diminuti on in value of the corpor ate a ssets is ins u fficient direct ha rm to g ive the share holder standingto sue in his own rig ht.’” W arren v. M

anufacturers Nat’l Bank , 759 F.2d 542, 544 (6th Cir. 1985) (re jectingplaintiff’s asse rtion, in an ac ti o n b ro ug ht under RI CO, that traditionally

derivative claims could be a sserted individually wher e shar eholder “los t his tot al i n v es t m en t wh en h i s s t o ck b ec am e wo rt h l es s ” as a re s u l t o f ba n krup t cy fi l i n g) ( qu o t i n g Steve ns v. Lowder , 643 F.2d 1078, 1080 ( 5th Cir. 1981)).
C.
I n h e r se c on d ame nd e d c omp la int , Ca sd e n a lle g e s th a t sh e a nd oth e r m e mbe rs of

the c la ss “have been harme d by defe ndants in the form of a decline in the price of their sha res be fore and af

ter defe ndants ca

used Da na to f ile the petition f

or bankruptc y .” (J.A. 156.) I ndeed, the only rec overy Casden see ks is for m onetar y damag es t hat resulted from the diminuti on in corpor ate value. But any decline in the va lue of Da na’s stock ha

rmed a ll shareholder s , an d thus any damag e ca

used by De fe ndant s’ pu rpor

te d f a ilure to p ur su e op tio ns oth e r t ha n b ank ru ptc y wa s to the c omp any

a s aNo. 07-4067

Casden v. Burns

Ca sd e n atte mpt s to di sti nguis h th e ha rm to s ha re ho lde rs by

arguin g tha

t D e fe nd ants ’ 6 decision to file for

bankruptc y

was “ for the be nefit of Da na, but not the benefit of pl aintiff and the Cla ss.” Casden’ s argument fails to rec og nize that there is nothing a bout a bankr

uptcy filing that ne c essa ril ycause s distinct and separate harms to share holders. I n fac t, as Def endants rig htly

point out, beca use a ba nkruptcy reor g anization pl an i s i n t en d ed to re structure a business so that it can c o n t i nu e t o o p e r a t e , b a

n kr u p t c y m ay b e n e f i ts h ar e h o l d e r s . In p a r t i c u l a r , C a s d e n c l a i m s t h a t share holders we re unique l y h arm edb y

Da n a’ s b an krup t cy

fi l i n g b ec au s e t h e “ cr am d o wn ” p ro v isions of the Ba nkruptcy Code, 11 U.S.C. § 1129(b), re leg ated sha reholde rs to a lower

debt priority . But bankruptc y

“cr am down” proce dures ref lect the well-settled principle that share holders ar e entitled to pay ment only

afte r other c reditors have bee n satisfied. Even w ithout bankruptcy , Virg inia law provides that shar eholder

rig hts are subo r d in a

te to c reditors’ c laims. See Ma rsh all v . F re de ric k sb ur g Lumber Co. , 173 S.E. 553, 557 ( Va. 1934) (“A stockholder’ s rig hts a re defe rre d to those of a c reditor in the distribution of assets. The cr editors ar e entitled to full pay ment of their de bts before the stockholder pa

rticipates ther ein.”) . Thus, if Casden’s interests are eliminated by a “cram down,” that harm is mere ly a conseque nce of Dana ’s curr ent financ ial condition, it is not a harm that is unique to the share holders, and it is not an inhere nt result of the ba nkruptcy proce ss.
- 17 - whole. Under

Virg inia law, su ch cla ims unquestionably are derivative in nature a

nd may be asse rted 6 only on behalf of Da na.
Ca sd e n atte mpt s to ov e rc ome thi s p ro ble m by c la imi ngthat sh e se e ks re dres s of ce rt a in “unique” harms to share holders ar i s i n g o u t of the loss of important shar eholder rig hts due to the ba nk ru ptc y fi lin g , in c lud ingvo tin g ri g ht s and the ri g hts to i ns pe c t D ana ’s bo ok s, a mon g oth e r t hin g s. B ut C a sd e n d id n ot a sse rt any c la ims re g ard inglost sh are ho lde r r ig hts in h e r a me nd e d c omp la int , that is, other t han the rig ht to bring derivative actions. The other alleg ations of lost rights Casde n
re lie s o n b e fo re th is Court —lo st v oti ngri g hts , e lim inatio n o f t he annua l me e tin g re qu ir e me nt,No. 07-4067

Casden v. Burns

No r d oe s Cas de n’ s c omp la int a lle g e that sh e e ve r atte mpt e d to e xer c ise any of the se ri g hts
. 7 There fore , even if

they had been l isted in Count I , serious questions would arise reg ardingCasden’s standing to assert such c laims. The “irreduc ible constitutional minimum of standing ” conta ins three require ments: injury

in fac t, ca u s at i o n , and re dressa bility
. Steel Co. v. Citizens For a Better Environment , 5 23 U. S. 8 3, 10 2- 03 (1 99 8) ; se e als o Lu jan v . D e fe nd e rs o f W ild lif e , 5 0 4 U. S. 555 (1 99 2) . T he inj ur

y -i n- fa c t e le me nt r e qu ir es a pl ain tif f t o d e mon str a te that th e ha rm a lle g e dly suffe red “ is concre te and a ctual or imminent, not conjec tural or hy pothetical.” Steel Co. , 5 23 U. S. at 103 (c itation and quotation marks omitted). - 18 - termination of the r ight to inspec t Dana’ s books, and reduc tion in owner ship inter ests—wer e not set fo rt h in he r s e c on d ame nd e d c omp la int
. 7 Havingfailed to ra ise these c laims below, Casden c annot asser t them f or the fir st tim e on appea l. See Taft Broadcasting Co. v

. United States , 929 F.2d 240, 243 ( 6th Cir. 1991) (“As a rule, this court declines to e ntertain a rg uments not presente d in the first instance to the district c ourt.”).

“ Th e a pp ro pr iate meth od for a dd ingne w f a c tua l a lle g a tio ns to a

c omp la int

is n ot v ia an a pp e llate brief, but by filing an amende d complaint.” Harve y v. G reat Sene ca Fin. Corp. , 453 F.3d 324, 328 (6th Cir. 2006). Where a

party fails to follow this protocol, we g ener ally will “disreg ard the new set of fa cts alleg ed for

the first time on appe al[.] ” Id. at 329.
I n any e ve nt, e ve n if the se argume nts ha d b e e n s e t f or th i n th e se c on d ame nd e d c omp la int , the purporte d d eprivation of shareholde r rig hts does not conver t a plainly

derivative claim into a direc t claim. Casden see ks monetary damag es for the lost value of he r stocks which ha ve now be en
canc elled. The incidental loss of shar eholder rig hts does not constitute a n injury that is distinct from the ha rm su ff e re d b y a ll s ha re ho lde rs . Thus , the a lle g e d los s of sh are ho lde r r ig hts , e ve n if pr op e rl y raised, would not give rise to a dire ct individual action. Se e Ga ff , 8 14 F .2 d at 31 7- 18 . Si mpl y pu t,No. 07-4067

Casden v. Burns

I n dismiss ing Ca sden’s claim, the di strict court a lso concluded that fede ral ba nkruptcy law 8 pree mpts Casden’s state law claim, concluding that “it is distinctly the province of bankr uptcy law to d e te rm ine lia

bil ity fo r i mpr op e r a c tio ns re latin g to b ank ru ptc y fi lin g s, [an d th

us ] Ca sd e n’ s c la im is preempted.” Casden , 504 F. Supp. 2d at 282. Be cause we aff irm on other g rounds, we ne ed not rea ch the pr eemption question. - 19 - Ca sd e n f a ils to a lle g e any

ha rm —e ith e r i n h e r c omp la int

or be fo re thi s Co ur

t—t hat is dis tin g uis ha

ble from the ove rar ching harm to Da na and bor

ne by all share holders g ener ally
. Mo re ov e r, e ve n if

Ca sd e n w e re a

ble to o ve rc ome the se oth e r iss ue s, the c omp la int se e ks on ly “appr opriate mone tary

damag es, including , but not lim ited to, the damag es to Dana share holders
cause d b y

th e b an kr

u p tc y . ” ( J. A
. 2 1 9
. ) A s e xp la in e d a b o v e , h o w e v e r , r e c o v e r

y o f monetary damag es for

the lost value of stock is a “ classic de rivative c laim.” Parsch , 72 Va. Cir. at 128.
F ina lly , Cas de n’ s c la im that th e ba nk ru ptc y fi lin g “ e xtinguis he d” he r s ha re ho lde r r ig hts is wrongas a matter of law. As the di strict court properly rec og nized, share holders are “able to vot e, object, and othe rwise pa

rticipate in the [bankruptc y ] reorg anization process.” Casden , 504 F. Supp. 2d a t 27 9 n. 4 (c iti ng 11 U. S.C. §§ 11 26 (a ), 11 26 (c ))
. Th is is tr ue of e a c h of the sh are ho lde r r ig hts that Casden alleg es that she has lost, e x cept of course the “rig ht” to bring derivative claims, which alway s belong ed to the compa ny and thus was ne ver Casde n’s to lose.
Casden asse rts claims ag ainst Dana ’s officers and direc tors for br eac h of fiducia ry duty and corpor ate mismanag ement, seeking rec overy of t he los t value of her stock. Under Virg inia law, such claims unqu es t i o n ab ly

are derivative in nature. We theref ore AF F IRM the district court’s or der 8 dismiss ing Ca sden’s state la w bre ach of

fiduciar y duty claim.