Opinion ID: 2633558
Heading Depth: 1
Heading Rank: 7

Heading: Pleading demand satisfaction or futility

Text: In light of the demand requirement, NRCP 23.1 imposes heightened pleading imperatives in shareholder derivative suits. [19] Under this rule, a derivative complaint must state, with particularity, the demand for corrective action that the shareholder made on the board of directors (and, possibly, other shareholders) and why he failed to obtain such action, or his reasons for not making a demand. [20] Thus, as the Delaware Supreme Court has recognized in a similar shareholder demand context, a shareholder must set forth . . . particularized factual statements that are essential to the claim that a demand has been made and refused, or that making a demand would be futile or otherwise inappropriate. [21] We note, however, that NRCP 8(e) requires pleadings to be simple, concise, and direct. Accordingly, the pleader is not required to plead evidence. [22] Nonetheless, mere conclusory assertions will not suffice under NRCP 23.1's with particularity standard. [23] A shareholder's failure to sufficiently plead compliance with the demand requirement deprives the shareholder of standing [24] and justifies dismissal of the complaint for failure to state a claim upon which relief may be granted. [25] Since dismissing a shareholder derivative suit for failure to sufficiently plead the demand requirement is akin to dismissing a complaint for failure to state a claim upon which relief can be granted, [26] such dismissal orders are subject to similar de novo standards of review. Accordingly, the district court's decision to grant an NRCP 23.1 motion to dismiss is rigorously reviewed. [27] This court, like the district court, must accept as true each of the complaint's particularized factual allegations and draw every fair factual inference flowing from those particularly alleged facts in favor of the nonmoving party. [28]