Court Opinion

ID: 4197480
Source: CourtListenerOpinion
Date Created: 2017-08-21 13:08:04.005646+00
Date Added: 2024-06-11T14:40:09.223750
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NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
         parties in the case and its use in other cases is limited. R.1:36-3.

                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-1241-15T2

PAUL MEMO, derivatively
on behalf of PRUDENTIAL
FINANCIAL, INC.,

        Plaintiffs-Appellants,

v.

JOHN R. STRANGFELD, JR.,
RICHARD J. CARBONE, PETER
B. SAYRE, THOMAS J. BALTIMORE,
JR., GORDON M. BETHUNE, GASTON
CAPERTON, GILBERT F. CASELLAS,
JAMES G. CULLEN, MARK B. GRIER,
CONSTANCE J. HORNER, MARTINA
HUND-MEJEAN, KARL J. KRAPEK,
CHRISTINE A. POON, JAMES A.
UNRUH and JON F. HANSON,

        Defendants-Respondents,

and

PRUDENTIAL FINANCIAL, INC.,

     Defendant.
________________________________________________

              Submitted March 7, 2017 – Decided August 21, 2017

              Before Judges Messano, Espinosa and Suter.
              On appeal from the Superior Court of New
              Jersey, Chancery Division, Essex County,
              Docket No. C-191-13.

              Kantrowitz, Goldhamer & Graifman, PC and The
              Weisier Law Firm, PC, attorneys for appellants
              (Gary S. Graifman, on the brief).

              Wong   Fleming,   and  Edwin   G.   Schallert
              (Debevoise & Plimpton, LLP) of the New York
              Bar, admitted pro hac vice, attorneys for
              respondents (Daniel C. Fleming, on the brief;
              Mr. Schallet, of counsel and on the brief).

PER CURIAM

       This   appeal      requires   us    to   consider    application    of   the

business judgment rule, which "is embedded in American corporate

law[,] . . . [and] 'protects a board of directors from being

questioned     or   second-guessed        on    conduct   of   corporate   affairs

except in instances of fraud, self-dealing, or unconscionable

conduct.'"      In re PSE & G S'holder Litig., 173 N.J. 258, 276-77

(2002) (quoting Maul v. Kirkman, 270 N.J. Super. 596, 614 (App.

Div. 1994)).        "One recognized infringement on director autonomy

is [a] shareholder-derivative action." Id. at 277; N.J.S.A. 14A:3-

6.2.    Before commencing such an action, the plaintiff must serve

"a written demand . . . upon the corporation to take suitable

action."      N.J.S.A. 14A:3-6.3(a); see also R. 4:32-3 (setting forth

prerequisites       for    filing    a    shareholder     derivative   complaint,

including pre-suit demand by a plaintiff for the "desired" "action"

by "managing directors or trustees").

                                           2                               A-1241-15T2
       In response to such a demand, the defendant managing directors

and board members "may appoint a special litigation committee

[(SLC)] to investigate whether the suit is in the best interest

of the corporation."      PSE & G, supra, 173 N.J. at 283 (citing

Zapata Corp. v. Maldonado, 430 A.2d 779, 786 (Del. 1981). "Based

on the committee's findings, the corporation may move for dismissal

of the suit, although the corporation has the burden of proving

the 'independence,' 'good faith,' and 'reasonableness' of the

committee's investigation."       Ibid.     (quoting Zapata, supra, 430

A.2d at 788).     Regardless whether an SLC is formed or not, our

Court has adopted

            a modified business judgment rule that imposes
            an initial burden on a corporation to
            demonstrate that in deciding to reject or
            terminate a shareholder's suit the members of
            the   board    (1)   were   independent    and
            disinterested, (2) acted in good faith and
            with due care in their investigation of the
            shareholder's allegations, and that (3) the
            board's decision was reasonable.     All three
            elements must be satisfied.

            [Id. (emphasis added) (citing In re PSE & G
            S'holder Litig., 315 N.J. Super. 323, 335 (Ch.
            Div. 1998)).]

       In 2012, plaintiff Paul Memo, a shareholder of Prudential

Financial, Inc. (Prudential), sent a pre-suit demand letter to

John   R.   Strangfeld,   Jr.,   Chairman    of   Prudential's   Board    of

Directors (the Board) and its Chief Executive Officer (CEO),

                                    3                              A-1241-15T2
asserting Prudential's management had breached their fiduciary

duties.      Plaintiff demanded the Board commence an independent

internal investigation and bring a civil action against members

of its management team.          On March 12, 2013, the Board appointed

three of its members to a "special evaluation committee" (SLC) to

investigate plaintiff's allegations.            The SLC interviewed two law

firms, and chose Day Pitney, LLP (Day Pitney), to serve as its

counsel.

      On    September      10,   2013,   plaintiff       filed    a    shareholder

derivative     action      against    Strangfeld,     Richard         J.    Carbone,

Prudential's Chief Financial Officer (CFO), Peter B. Sayre, its

Principal Accounting Officer, and directors Thomas J. Baltimore,

Jr., Gordon M. Bethune, Gaston Caperton, Gilbert F. Casellas,

James G. Cullen, Mark B. Grier, Constance J. Horner, Martina Hund-

Mejean, Karl J. Krapek, Christine A. Poon, James A. Unruh and Jon

F.   Hanson    (collectively,        defendants).        Among    other      things,

plaintiff asserted ten months had passed since he served the demand

letter     without   any    substantive      response.      Plaintiff        further

claimed the Board's inaction was a functional refusal of his demand

and defendants breached their fiduciary duties to Prudential's

shareholders.

      Day   Pitney   notified      plaintiff's      counsel      of   the   ongoing

investigation.       On March 24, 2014, the SLC issued its report.

                                         4                                   A-1241-15T2
Shortly thereafter, defendants moved to dismiss the complaint

pursuant    to   Rule     4:6-2(e),   but     the   court    permitted    limited

discovery before ruling on the motion.                 See PSE & G, supra, 173

N.J. at 286 (permitting access to corporate records and discovery

"limited to the narrow issue of what steps the directors took to

inform themselves of the . . . demand and the reasonableness of

its decision" (quoting PSE & G, supra, 315 N.J. Super. at 337)).

In April 2015, plaintiff filed opposition to defendants' motion.

     After considering oral argument, Judge Thomas Moore granted

defendants'      motion    for   reasons      placed    on   the   record     in    a

comprehensive oral opinion. Judge Moore's October 6, 2015 order

dismissed plaintiff's complaint with prejudice, and this appeal

followed.

     Plaintiff     contends      there   were    material     factual    disputes

regarding the independence of the SLC members, particularly in

light of a Day Pitney memo dated the same day the SLC issued its

report.    Plaintiff also argues Judge Moore erred in concluding as

a matter of law that Day Pitney acted independently and the SLC's

investigation was reasonable.            Having considered these arguments

in light of the record and applicable legal standards, we affirm.

                                         I.

     We briefly summarize some background to place plaintiff's

claims in proper context.

                                         5                                  A-1241-15T2
     Prudential provided financial management services and sold

various     investment   products      to   the   public,      including       life

insurance    policies    and   annuity      contracts.      In     2009,     Verus

Financial, LLC (Verus) notified the company that it would be

examining Prudential's unclaimed property practices and compliance

procedures on behalf of thirteen states.1                 In public filings,

Prudential    acknowledged     the    "audit   may    result     in   additional

payments of abandoned funds to [United States] jurisdictions and

to changes in the Company's practices and procedures for the

identification of escheatable funds, which could impact claim

payments and reserves, among other consequences."

     In June 2011, the Board held a meeting that was attended by

three members of the subsequently-formed SLC, during which the

directors were given updates on the progress of the Verus audit.

In November 2011, Prudential issued a press release announcing it

increased its reserves by an additional $139 million, the lion's

share of which was an acknowledgment of the company's decision to

change its procedures for identifying deceased policy and contract

holders, and the potential liability that might result.                           In

December    2011,   Prudential       entered   into   a   Global      Resolution

Agreement (GRA) with Verus, adopting modifications to its business

1
  The number of states continued to grow over ensuing years to a
total of thirty-three.

                                        6                                  A-1241-15T2
practices and requiring Prudential to "identify and locate the

beneficiaries" of all "policies and contracts active at any time

since January 1, 1992 through December 31, 2010."            Under the GRA,

if a beneficiary could not be located, Prudential would remit all

proceeds to the particular jurisdiction as unclaimed property

subject to escheat.

      Plaintiff claimed Prudential inappropriately held unclaimed

property, resulting in the company posting stronger earnings than

it should have.     The disclosure of these irregularities resulted

in significant decreases in the stock price.

      Three directors, Baltimore, Hund-Mejean and Poon, comprised

the SLC, with Poon elected as chair.           All had extensive business

experience, were more recent additions to the Board and had no

direct   involvement    with     managing   the   company.      Each    member

completed a questionnaire consisting of twenty-five questions.

The SLC report described a number of factors intended to ensure

the   committee's      members     were     independent   and    personally

disinterested in plaintiff's complaint.

      The SLC concluded Prudential should take all appropriate

actions to dismiss plaintiff's complaint, stating:

           Contrary to the claims in the Shareholder
           Letter and Shareholder Complaint, the SLC
           found that the Board and executive officers
           acted on an informed basis, with the input and
           advice of competent advisors, and in the good

                                      7                                A-1241-15T2
            faith belief they were acting in the best
            interests   of   the   corporation   and   its
            shareholders, generally and with respect to
            the periodic financial reports at issue. It
            found there existed reasonable systems for the
            flow of information to the Board and senior
            management, including with respect to the
            claims asserted in this matter. It found no
            evidence that the Board acted in other than
            good faith and in the best interests of the
            corporation and its shareholders, or that it
            consciously failed to oversee the operations
            of the Company or disregarded any red flags.

                                        II.

      Defendants moved to dismiss plaintiff's complaint for failure

to state a claim for relief, Rule 4:6-2(e).              The Rule plainly

provides:

            If, on a motion to dismiss based on the defense
            numbered (e), matters outside the pleading are
            presented to and not excluded by the court,
            the motion shall be treated as one for summary
            judgment and disposed of as provided by R.
            4:46, and all parties shall be given
            reasonable opportunity to present all material
            pertinent to such a motion.

            [R. 4:6-2.]

In this case, after limited discovery regarding the appointment

of   the   SLC,   its   counsel   and    its   investigation,   Judge     Moore

considered the issues presented by applying the standards set

forth in Rule 4:46.

      We consider the grant of summary judgment de novo, using the

"same standard as the motion judge."           Globe Motor Co. v. Igdalev,

                                         8                              A-1241-15T2
225 N.J. 469, 479 (2016)   (quoting Bhagat v. Bhagat, 217 N.J. 22,

38 (2014)).

           That standard mandates that summary judgment
           be granted "if the pleadings, depositions,
           answers to interrogatories and admissions on
           file, together with the affidavits, if any,
           show that there is no genuine issue as to any
           material fact challenged and that the moving
           party is entitled to a judgment or order as a
           matter of law."

           [Templo Fuente De Vida Corp. v. Nat'l Union
           Fire Ins. Co., 224 N.J. 189, 199 (2016)
           (quoting R. 4:46-2(c)).]

Our "task is to determine whether a rational factfinder could

resolve the alleged disputed issue in favor of the non-moving

party."   Perez v. Professionally Green, LLC, 215 N.J. 388, 405-06

(2013).

     An opposing party must "do more than 'point[] to any fact in

dispute' in order to defeat summary judgment."    Globe Motor Co.,

supra,    225 N.J. at 479 (quoting Brill v. Guardian Life Ins. Co.

of Am., 142 N.J. 520, 529 (1995)).   If the opposing party

           offers . . . only facts which are immaterial
           or of an insubstantial nature, a mere
           scintilla, "fanciful, frivolous, gauzy or
           merely suspicious," he will not be heard to
           complain if the court grants summary judgment,
           taking as true the statement of uncontradicted
           facts in the papers relied upon by the moving
           party, such papers themselves not otherwise
           showing the existence of an issue of material
           fact.

                                 9                           A-1241-15T2
            [Id. at 480 (quoting Brill, supra, 142 N.J.
            at 529) (quoting Judson v. Peoples Bank &
            Trust Co., 17 N.J. 67, 75 (1954)).]

Our review is limited to the record before Judge Moore.                Lombardi

v. Masso, 207 N.J. 517, 542 (2011).

     We    also    review    the   trial    court's   decision    to   dismiss

plaintiff's complaint under the modified business judgment rule

de novo.       PSE & G, supra, 173 N.J. at 287.         Because defendants

bear the burden of proof, we "must view the record with all

legitimate inferences drawn in the [plaintiff]'s favor and decide

whether    a    reasonable    factfinder      could   determine    that      the

[defendants] ha[ve] not met [their] burden of proof." Globe Motor,

supra, 225 N.J. at 481.        In other words, we must decide whether

"the evidence is so one-sided that . . . [defendants] . . . must

prevail as a matter of law."               Brill, supra, 142 N.J. at 540

(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106

S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)).

     We review issues of law de novo and accord no deference to

the trial judge's legal conclusions.             Nicholas v. Mynster, 213

N.J. 463, 478 (2013).        In this regard, we note that shortly after

the SLC was formed in this case, on April 1, 2013, the Legislature

enacted N.J.S.A. 14A:3-6.5, which "details various alternative

procedures for the corporation to make an independent decision as

to whether the derivative proceeding is in the best interests of

                                      10                                A-1241-15T2
the corporation."       Assembly Commerce and Economic Development

Committee, Statement to A. 3123 (September 24, 2012); Senate

Commerce Committee, Statement to A. 3123 (January 14, 2013).

     N.J.S.A. 14A:3-6.5 permits a corporation, prior to seeking

dismissal of a shareholder derivative action, to form a "committee

. . . of one or more independent directors appointed by a majority

vote of independent directors[,]" N.J.S.A. 14A:3-6.5(2)(b), and

defines who is an independent director.            N.J.S.A. 14A:3-6.5(7).

The statute further provides that

          a derivative proceeding shall be dismissed by
          the court on motion by the corporation if the
          court finds that . . . [such a committee] has
          determined in good faith, after conducting a
          reasonable inquiry upon which its conclusions
          are based, that the maintenance of the
          derivative proceeding is not in the best
          interests of the corporation[.]

          [N.J.S.A. 14A:3-6.5(1)(a).]

Importantly,   if    the   corporation   follows    such   procedures,    in

certain circumstances, the statute shifts the burden of proof to

the plaintiff.      N.J.S.A. 14A:3-6.5(4) and (6).

     In this case, neither party argued the statute applied, nor

did Judge Moore discuss the statute.        Neither party has cited the

statute in its appellate brief.          We assume, therefore, that it

does not apply.

                                   11                              A-1241-15T2
     Moreover, for the present, we are bound by the Court's

guidance as to how we should consider the impact, if any, that the

formation of an SLC and its subsequent report to the Board has

upon the modified business judgment standard.                   Although the issue

was not squarely before it in PSE & G, supra, the Court said, "as

a general framework for analysis, we will 'not differentiate

between        cases       where   a    shareholder         litigation        committee

investigated the demand and cases in which demand was refused by

the board.'"       173 N.J. at 283 (quoting, PSE & G, supra, 315 N.J.

Super.    at    329    n.1).       As   a    court   of     intermediate      appellate

jurisdiction,         we   defer   to   the      Court's    authority    to    adopt    a

different standard, particularly in light of the enactment of

N.J.S.A. 14A:3-6.5.            Riley v. Keenan, 406 N.J. Super. 281, 297

(App. Div.), certif. denied, 200 N.J. 207 (2009).

                                            III.

     We provide some additional context as we consider plaintiff's

specific arguments.

     In its report, the SLC detailed the selection process for its

three members, which took into account, among other things:                          the

SLC members' positions on the Board and Audit Committees, the

"lack     of    any    personal     financial        gain    distinct    from     other

shareholders from the activities alleged in the Shareholder Letter

and Shareholder Complaint," the lack of personal interest in the

                                            12                                  A-1241-15T2
litigation and the lack of personal liability for the alleged

activities.    Counsel for the SLC reviewed additional information

regarding relationships between SLC members, their families and

affiliated    organization,     and    Prudential,   other      directors    and

senior management.

    The questionnaires completed by the SLC members contained two

questions that focused on whether the member was involved in any

discussions, prior to November 2011, as members of the "Audit

Committee or Corporate Governance and Business Ethics Committee,"

regarding the company's treatment of unclaimed death benefits,

escheatment    and    establishment     of   reserves    (question    24),    or

whether the member was involved in the approval or review of

Prudential's response to Verus' audits (question 25).                All three

SLC members answered in the negative.           Day Pitney conducted face-

to-face interviews with Hund-Mejean and Baltimore, but not Poon.

    On March 24, 2014, the day the SLC filed its report, a Day

Pitney   intra-office       memorandum       indicated   that     during     the

investigation,       SLC   members    "became    aware   of   materials      and

information" showing "the Board . . . and the Audit Committee

received updates from management regarding . . . the . . .

Company's response to the Verus audit."              The memo specifically

cited questions 24 and 25 of the questionnaire, and stated "the

                                      13                               A-1241-15T2
SLC members affirmatively wish to update their responses . . . to

acknowledge and reflect these developments."

     All three members of the SLC were deposed.             Under oath, Poon

specifically stated she did not want to update her answers on the

questionnaire.        In her deposition, Hund-Mejean reiterated her

answers to questions 24 and 25.            Baltimore testified in a manner

that was consistent with the answers on his questionnaire.

     Plaintiff argues the Day Pitney memo raises a genuine material

factual dispute about the members' knowledge of and involvement

in Prudential's practices and response to the Verus audit as it

was ongoing, which should have foreclosed summary judgment on the

critical issue of whether the SLC was "independent."            We disagree.

     "Directorial independence 'means that a director's decision

is based on the corporate merits of the subject before the board

rather than extraneous consideration or influences.'" PSE & G,

supra,   173   N.J.    at   290   (quoting    In   re   Prudential   Ins.   Co.

Derivative Litig., 282 N.J. Super. 256, 276 (Ch. Div. 1995)).

Judge Moore accepted the commonsense notion that as members of the

Board, each SLC member would have received some information about

the audit as it was ongoing.        The judge focused on the deposition

testimony of the three SLC members, which was unequivocal.                    We

agree that the Day Pitney memorandum, standing alone, does not

raise a material factual dispute about the knowledge each SLC

                                      14                               A-1241-15T2
member possessed, or the actions or inactions they took as Board

members, and therefore does not raise a material factual dispute

about the SLC's independence and disinterestedness.

       Plaintiff next contends material facts regarding Day Pitney's

independence foreclosed the conclusion that it acted independently

in providing counsel to the SLC.               Specifically, plaintiff argues

the law firm had previously represented a Board member, Krapek,

in unrelated litigation, and it represented another corporation

of which Poon served as a director.

       Plaintiff's claims rest upon a table prepared by Day Pitney

indicating its representation between January 1, 2010 and March

24,    2014,   the   date     the   SLC   report   was    issued,   of   "Entities

Associated With Individual Defendants" named in this litigation.

In five instances, Day Pitney represented a client with which

Krapek had some affiliation.              It was apparently undisputed that

the    firm    had   earned    more   than     $300,000    in   fees     for     these

representations, some of which ended before the SLC was formed,

but that was a minute percentage of the firm's gross revenues.

       Poon appeared as an associated defendant with respect to one

Day Pitney client.2            However, when specifically questioned at

2
    The chart listed three entities in one line item.

                                          15                                   A-1241-15T2
deposition about her directorship with the listed entities, Poon's

answers were unclear.3

3
  The Day Pitney conflicts list included "Philips Electronics" as
the entity with which Poon was affiliated. At deposition, she was
asked about her membership on corporate boards, and responded:

          Q: And which boards might those be?

          A: I am a director of the public board called
          Regeneron.

          Q: Okay.

          A: I'm a director of the public board that's
          called Philips.

               . . . .

          Q: Okay. And with regard to Philips, would
          that be Philips Electric?

          A: Yes. Electronics.

          Q: I'm sorry. Electronics.

          A: Royal Philips is —

          Q: Okay. Royal Philips. And is there another
          name that begins with a K that's probably too
          long for me to say?           Something like
          Koinklijke?

          A: Yes.

          Q: And there are also I believe some
          subsidiaries that you're affiliated with of
          Philips; is that correct?

          A: That's not correct.

                                 16                        A-1241-15T2
       Judge Moore concluded Day Pitney's prior representation of

entities with which Krapek and Poon had some affiliation did not

raise a genuine factual dispute about the law firm's independence.

He cited In re Par Pharmaceutical, Inc. Derivative Litigation, 750

F. Supp. 641, 647 (S.D.N.Y. 1990), where the court held that an

SLC must be represented by independent counsel.               However, as Judge

Moore noted, in that case, the same firm represented both the SLC

and the corporation.     Id. at 644.

       Before us, plaintiff relies upon a portion of Justice Stein's

concurring opinion in PSE & G, supra, 173 N.J. at 298-300, which

discussed the importance of an SLC having independent counsel.

However, there too, the law firm conducting the investigation of

the plaintiffs' claim had previously represented the corporation

in seeking an extension to respond to the complaint.                Id. at 299-

300.

       Plaintiff cites to no other authority for the proposition

that Day Pitney's representation of entities with which Krapek and

Poon   had   some   affiliation   raised      a    material     factual   dispute

regarding the independence of the firm's investigation of the

complaint and the advice and counsel it rendered to the SLC.

       Plaintiff also argues genuine material factual disputes exist

regarding     the   reasonableness       of       the   SLC's    investigation.

Specifically, he contends the SLC failed to conduct interviews of

                                    17                                    A-1241-15T2
key witnesses and never considered in its investigation the impact

of another class action securities fraud complaint made against

Prudential (the securities action).            Defendants contend these

issues were never raised before Judge Moore, and we agree that his

oral    decision   does   not   specifically     address   these    claims.

Nonetheless, we conclude plaintiff's arguments lack any merit.

       The Court described how we should consider whether the company

conducted a reasonable investigation.          "[T]he court's inquiry is

not into the substantive decision of the board, but rather is into

the procedures employed by the board in making its determination."

PSE & G, supra, 173 N.J. at 291 (citation omitted).                "In that

regard, there is 'no prescribed procedure that a board must

follow.'"    Id. at 291-92 (quoting Levine v. Smith, 591 A.2d 194,

214 (Del. 1991), overruled on other grounds, Brehm v. Eisner, 746

A.2d 244 (Del. 2000)).      "Nonetheless, the process should be such

that a reviewing court can look to it and conclude confidently

that it reflects a corporation's earnest attempt to investigate a

shareholder's complaint."       Id. at 292.     "Stated differently, the

inquiry is whether the 'investigation has been so restricted in

scope, so shallow in execution, or otherwise so pro forma or half

hearted as to constitute a pretext or sham[.]'"            Ibid. (quoting

Stoner v. Walsh, 772 F. Supp. 790, 806 (S.D.N.Y. 1991) (internal

quotation marks and citation omitted)).

                                   18                               A-1241-15T2
     Plaintiff contends the SLC failed to interview Mark Grier,

Prudential's Vice-Chairman who admittedly was responsible for a

wide variety of corporate functions.         The federal district court

denied   Prudential's    motion   to    dismiss   the   complaint   in   the

securities action that named Grier as a defendant.         Plaintiff also

contends the SLC failed to interview Verus or any government entity

affected by Prudential's practices during the relevant period.

     The Court has recognized that "[o]ne of a board's prerogatives

. . . is 'to entrust its investigation to a law firm[.]'"             PSE &

G, supra, 173 N.J. at 292 (quoting Stepak v. Addison, 20 F.3d 398,

405 (11th Cir. 1994)).     In City of Orlando Police Pension Fund v.

Page, 970 F. Supp. 2d 1022 (N.D. Cal. 2013), the court said:

           [T]he [SLC] committee was not obligated to
           interview every potential witness identified
           by plaintiff (or any witnesses at all), nor
           does it suggest that plaintiff is somehow
           relieved of its burden to show that the un-
           interviewed individuals "had knowledge that
           was unique and unobtainable without those
           interviews, and how those interviews if taken
           would have altered the board's decision to
           refuse demand."

           [Id. at 1032 (quoting Copeland v. Lane, No.
           5:11-cv-01058 EJD, 2012 U.S. Dist. LEXIS
           146815 (N.D. Cal. Oct. 10, 2012)).]

The SLC's report details the process employed to investigate

plaintiff's claims.     In part, Day Pitney reviewed more than eleven

million pages of documents and interviewed twenty-nine witnesses.

                                   19                               A-1241-15T2
Those     interviewed      included    "current           and   former    employees,

officers, and members of the Board[;] [m]ultiple members of senior

management . . . , as well as employees involved in the Company's

disclosure process[,] and . . . representatives of multiple Board

Committees."         We    can     conclude        with    confidence     that    the

investigation    conducted       by   the    SLC    "reflects     a   corporation's

earnest    attempt    to     investigate      a     shareholder's        complaint."

PSE & G, supra, 173 N.J. at 292.

     Plaintiff's final contention, that the SLC did not consider

the securities action in reaching its conclusion, lacks sufficient

merit to warrant discussion.          R. 2:11-3(e)(1)(E).             The SLC report

actually cites other contemporaneously filed litigation against

Prudential     and   other       insurance    companies         regarding    alleged

failures to properly investigate deaths of policy holders.

     Affirmed.

                                       20                                    A-1241-15T2