David Pyott, Herbert W. Boyer, Louis J. Lavigne, Gavin S. Herbert, Stephen J. Ryan, Leonard D. Schaeffer, Michael R…

Summary

The Supreme Court of Delaware held that a California federal judgment dismissing an essentially identical derivative action precluded the Delaware action. California preclusion law governed because federalism and full faith and credit required Delaware to give the California judgment the effect it would receive in California. The court held that derivative stockholders were in privity and that the Court of Chancery improperly presumed the California plaintiffs inadequate based solely on their status as fast filers, so it reversed the denial of dismissal.