Wisconsin
How In re The Home Depot, Inc. Derivative Litigation applies in Wisconsin: state-specific rules, key cases, and bar exam notes for Corporate Law.
Wisconsin's approach to derivative actions is contained within the Wisconsin Business Corporation Law, specifically focusing on the demand requirement and the business judgment rule. Similar to Delaware law but with Wisconsin-specific nuances, courts often emphasize the necessity of demonstrating that a demand on directors would have been futile.
Under Wisconsin Statutes § 180.0744, shareholders must make a demand on directors before initiating a derivative action unless such demand is shown to be futile.
The court held that demand futility must be particularly pleaded, making it difficult for shareholders to bypass the requirement.
Affirmed that shareholders must justify the futility of a demand, highlighting the business judgment rule.
Examined the circumstances under which demand could be deemed futile, underscoring board discretion.
Wisconsin's principles for derivative actions share similarities with federal law, particularly under Federal Rules of Civil Procedure Rule 23.1, which also requires a demand on directors but allows for greater latitude in proving futility. However, Wisconsin law is more specific in its statutory provisions regarding the procedural aspects of derivative claims.
Understanding the demand requirement and the futility standard is crucial, especially as these concepts often appear in the Wisconsin bar exam regarding corporate law.