(USA Herald) — This is the case of Alphabet Shareholder Derivative Cases, in the Court of Appeal of the State of California, Sixth Appellate District.
Google investors are appealing a California court’s rejection of their shareholder derivative suit, which accuses the tech giant’s founders, former CEO, and certain board members of breaching their fiduciary duty by causing the company to systematically violate European Union (EU) antitrust law.
The investors claim that these actions resulted in over $9 billion in fines for Google. In 2020, the court ruled that the investors failed to show why it would have been futile to bring their concerns to the company’s board before filing their derivative claim on behalf of Google’s holding company, Alphabet Inc.
During oral arguments on Tuesday, a lawyer for the investors argued that the requirement to bring the concerns to the board should have been waived because Google’s leaders and board members faced a substantial likelihood of liability.
The lawyer, Mark Lebovitch of Bernstein Litowitz Berger & Grossmann LLP, stated that Google was ultimately run by a “triumvirate” of controlling stockholders: founders Larry Page and Sergey Brin, along with Eric Schmidt, former CEO and chair of Google-Alphabet. Lebovitch told the panel that “this case is about the controllers of one of the largest and most powerful companies in the world intentionally flouting the law.” He also argued that the majority of the board lacked independence from these three Google officers.