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First Diversity-Driven Derivative Suit in Facebook Case Tossed by Northern District of California | Troutman Pepper


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As Troutman Pepper recently reported, the second half of 2020 brought a new wave of board diversity derivative litigation. [1] These shareholder suits claimed boards of directors of public companies allegedly breached their fiduciary duties by failing to include diverse directors on their boards, despite statements of commitment to diversity, equality, and inclusion. On March 19, one of the earliest cases filed,
Ocegueda v. Zuckerberg, No. 3:20-cv-04444-LB (N.D. Cal.), was also the first dismissed, albeit with leave to amend. [2] U.S. Magistrate Judge Laurel Beeler granted the defendants’ motion to dismiss because (1) the plaintiff failed to plead demand futility with particularity; (2) the plaintiff’s state law claims were barred by the forum-selection clause in the company’s certificate of incorporation; and (3) the plaintiff failed to plead essential elements of her federal securities claim. [3] ....

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