Simply disagreeing with a company’s rationale in deciding not to file suit over a failed business and litigation strategy was not enough to sustain a shareholder derivative action in a suit that involved a $1.2 billion jury verdict and findings of vexatious conduct by DuPont, the Delaware Court of Chancery has ruled.
Vice Chancellor Sam Glasscock, in a detailed 95-page opinion in Ironworkers District Council of Philadelphia & Vicinity Retirement & Pension Plan v. Andreotti, found that E.I. du Pont de Nemours & Co.’s board was well informed in deciding not to sue any of its directors or employees for their roles in potential patent infringement of a Monsanto product, a resultant $1.2 billion jury verdict, sanctions against DuPont of Monsanto’s attorneys fees for DuPont’s “vexatious” litigation conduct, and a $1.75 billion settlement that included a new licensing agreement with Monsanto.
