Court Opinion

ID: 9472872
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:13:34.80996+00
Date Added: 2024-06-11T17:43:12.328953
License: Public Domain

FAIRCHILD, Senior Circuit Judge,
concurring.
I concur in affirmance.
I do, however, question whether the rubric of the business judgment rule is analytically appropriate to this case. In Count IV, plaintiffs do not seek damages from the directors for injury to the corporation caused by a breach of the directors’ duty. They ask the court to invalidate a bylaw which required more votes for a bylaw proposed by plaintiffs than plaintiffs could muster.
The challenged amendment is not unusual or extreme, and the board of directors had authority to enact it. Plaintiffs could succeed only if they showed the directors’ votes were sufficiently tainted to be invalid. It is true that the challenged bylaw limited to some extent the voting power of the shares plaintiffs purchased after the adoption but before the effective *380date of the bylaw. This bylaw was accompanied by another which restricted removal of a director during his elected term. I do not view these facts as even a threshold showing of invalidity.