Ninth Circuit Affirms Dismissal of Shareholder Complaint Against Hewlett-Packard
On October 26, 2015, the U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of a shareholder derivative complaint filed in the Northern District of California against certain current and former directors of Hewlett-Packard (HP). Wilson Sonsini Goodrich & Rosati represented HP in the matter.
In May 2013, the U.S. District Court for the Northern District of California dismissed the plaintiff's claims that HP's board of directors violated Delaware and federal securities law in connection with a wide range of matters, including former HP CEO Mark Hurd's compensation and termination, alleged bribes in violation of the Foreign Corrupt Practices Act, and HP's acquisition of 3PAR. Prior to filing suit, the plaintiff served litigation demands on HP's board of directors, which the company rejected following an investigation conducted by an independent committee of the board with the assistance of independent counsel.
On appeal, the Ninth Circuit affirmed the district court's ruling that the plaintiff "failed to plead particular facts raising a reasonable doubt regarding the independence, good faith, and due care with which the HP board investigated his litigation demand." In particular, the panel rejected the plaintiff's allegations that the HP board entrusted the investigation of his demand to an independent committee that was a "sham" from the outset. In addition, the Ninth Circuit held that the district court did not err by dismissing the plaintiff's claim that HP violated Section 14(a) of the Securities Exchange Act based on purported omissions and misrepresentations in HP's proxy statements.
The Wilson Sonsini Goodrich & Rosati team representing HP in the matter included partners Steve Schatz and Katherine Henderson, Of Counsel Cheryl Foung, and associates Brian Danitz, Jessica Snorgrass, and Benjamin Tolman.
Please refer to the Ninth Circuit's decision for more information.