City of Birmingham Retirement and Relief System, Robert L. Reese, Police Retirement System of St. Louis, Edward…

Summary

The court affirmed dismissal of a shareholder derivative complaint because the plaintiffs did not plead particularized facts showing that a majority of Duke Energy's directors faced a substantial likelihood of personal liability for a non-exculpated oversight breach. The board's receipt of environmental reports describing coal-ash problems and remediation efforts did not support a reasonable inference of bad faith, and allegations concerning regulatory leniency and a consent decree did not adequately connect alleged collusion to an intentional board-level oversight failure. The dissent would have found the pleaded facts sufficient to support an inference that the board knowingly tolerated unlawful environmental practices and used political and regulatory influence to avoid compliance.