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

Summary

The court 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 demand. The pleaded facts included a director’s co-ownership of a private airplane with the company’s controlling stockholder and two directors’ venture-capital relationships with the controller and another interested director, together with the board’s own determination that those two directors were not independent under exchange rules. The court remanded for further proceedings, while VALIHURA, Justice, dissenting, would have affirmed because the allegations did not adequately establish that five directors lacked disinterest or independence.