Court Opinion

ID: 9736653
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:01:52.484544+00
Date Added: 2024-06-11T18:27:07.672894
License: Public Domain

HARTNETT, Justice,
concurring:
I agree that the complaint leaves much to be desired and that plaintiffs be given an opportunity to file an amended complaint. In my view, however, the present complaint is adequate as to some of the asserted claims, if only barely so.
Chancery Rules 23.1 and 12(b)(6) are predicated on the Federal Rules of Civil Procedure. The federal precedents therefore carry great weight.79
*268Rule 23.1 does not abrogate Rule 12(b)(6), and therefore, in order for the defendants to have obtained a dismissal for failure to state a claim upon which relief can be granted under Rule 12(b)(6), it must have appeared “with reasonable certainty that the plaintiffs would not have been entitled to the relief sought under any set of facts which could be proven to support the action.”80 Moreover, as is true in other contexts,.the plaintiffs’ well-pleaded factual allegations must be taken as true and the complaint has to be read in the light most favorable to the plaintiffs.81 The reason for Rule 23.1 is judicial economy. It is not intended to preclude a judicial inquiry where the pleaded facts, if true, and any inferences that may be drawn from them, in the light most favorable to the plaintiffs, show the likelihood of misconduct by the directors. Because of the absence of a precise formula in the Rule for pleading compliance with the demand requirement, the sufficiency of a complaint under Rule 23.1 is determined on the basis of the facts of each case.82
I agree that the complaint does not create a reasonable doubt as to the disinterestedness or independence of the Board. In my opinion, however, from the totality of the factual allegations in the complaint, a reasonable doubt that the business judgment rule precludes judicial inquiry already exists as to some of the other claims, such as whether the directors were aware of the total cost of Ovitz’ compensation package when they approved it or whether Ovitz had actually resigned before he struck his termination deal.
Plaintiffs must not be held to a too-high standard of pleading because they face an almost impossible burden when they must plead facts with particularity and the facts are not public knowledge. Brushing aside technicalities, the issue here is whether this suit should have been dismissed by the Court of Chancery at this stage of the litigation without any discovery or whether the allegations in the complaint were sufficient to justify at least some discovery. In my opinion, the complaint already sufficiently alleges facts to warrant some limited discovery as to some of the claims.

. See Kay v. Scott, Del.Supr., 233 A.2d 52 (1967).

. Rabkin v. Philip A. Hunt Chemical Corp., Del.Supr., 498 A.2d 1099, 1104 (1985).

. See 7C Charles Alan Wright et al., Federal Practice and Procedure: Federal Rules of Civil Procedure Rules 23.1 to 25 § 1836 (2d ed.1986) (citing Mayflower Hotel Stockholders Protective Comm. v. Mayflower Hotel Corp., D.C.Cir., 173 F.2d 416 (1949); Overfield v. Pennroad Corp., 3d Cir., 113 F.2d 6 (1940); Citrin v. Greater New York Indus., Inc., S.D.N.Y., 79 F.Supp. 692 (1948); and Issner v. Aldrich, D.Del., 254 F.Supp. 696 (1966)).

. See id. at § 1871.