Under the corporate benefit doctrine, plaintiffs can be awarded attorney fees when their claims have been mooted under certain conditions, such as if the suit was meritorious when filed, the defendant took an action that produced a corporate benefit, and there is a causal link between the litigation and the corporate benefit.
The Oracle Litigation and Mootness Fee Decline
The case, known as In re: Oracle Corp. Derivative Litigation, stemmed from Oracle’s $9.3 billion acquisition of NetSuite in 2016. Shareholders initially alleged Oracle founder Larry Ellison intentionally overpaid for NetSuite and that a special committee overseeing the deal was too closely tied to Ellison to ensure fair decisions.
After Oracle appointed two new independent directors following the filing of the suit, the shareholders’ attorneys claimed the company’s action justified a mootness fee. However, the Chancery Court found that the plaintiffs did not seek the appointment of new directors during the litigation and that the appointment was merely a collateral effect.
