California
How Fisher v. Becton Dickinson and Co. applies in California: state-specific rules, key cases, and bar exam notes for Corporate Law.
California courts generally adhere to the principles of shareholder derivative actions articulated in Fisher v. Becton Dickinson and Co. The state emphasizes the need for proper demand and the importance of shareholder rights in corporate governance.
In California, a shareholder must make a demand on the board of directors before initiating a derivative lawsuit unless such demand would be futile.
This case affirmed that shareholders can bring derivative suits if the board refuses a demand, highlighting the futility of demand.
This case upheld the principle that plaintiffs must adequately plead demand futility to maintain a derivative action.
The court held that a shareholder's demand must be considered by the board in a meaningful way to avoid automatic dismissal of the derivative suit.
California's approach is similar to the federal standard under Rule 23.1, which also requires a demand to be made to the board before a derivative lawsuit can proceed. However, California emphasizes the specific factual showing of futility more heavily than some federal courts.
Understanding the principles established in Fisher v. Becton Dickinson and Co. is crucial for the California bar exam, particularly in questions relating to derivative actions and shareholder rights.