“There are no new facts in the latest version of the suit, just arguments saying that a demand would have been futile because the claims applied the same to both the directors and the executives,” Traps told the court. “Nothing prevented plaintiffs from first making the demand, at least on these claims against the officers,” Traps said. “They did not. They never gave the directors an opportunity.”
A lawyer for the plaintiffs, Gia Jung of Cotchett Pitre & McCarthy LLP, told the court that the latest version of their complaint addressed the pleading deficiencies that the judge had highlighted in her previous motion-to-dismiss ruling. “Demand futility is a simple question,” Jung said. “Would a demand on the board be futile as to the officer defendants here? The answer is unequivocally yes.”
The discriminatory hiring statements that the court has already found to be actionable against the board members “completely overlap” with the executives’ statements and are nearly identical to statements the officers made that underlie the securities claims against them, Jung said. She argued that the board members would not be able to independently investigate claims against the officers because that would implicate their own liability. “A demand on the board as to the alleged claims against the officer defendants would be futile, because the board would be conflicted,” Jung said.
