Thomas Sandys, Derivatively on Behalf of Zynga Inc., Plaintiff Below, Appellant v. Mark J. Pincus, Reginald D…

Summary

The Supreme Court of Delaware reversed dismissal of a shareholder derivative complaint because the plaintiff pleaded particularized facts creating a reasonable doubt that a majority of Zynga's board could impartially consider a litigation demand. The court found that a director's co-ownership of a private airplane with Zynga's controlling stockholder suggested an unusually close personal relationship, and that two venture-capital directors' overlapping business relationships and the board's own determination that they were not independent supported a reasonable doubt about their independence. Justice Valihura dissented, concluding that the allegations were insufficient and that the Court of Chancery should have been affirmed.