36 William Mitchell Law Review 70 (2009)
This article begins with the factual background and subsequent procedural history of the UnitedHealth Group Inc. shareholder derivitve litigation, as an instance where Minnesota courts effectively disposed of the factual allegations in a well-pleaded derivative action, directed at the behavior and actions of members of a board of directors, without reviewing finding of facts or reasoning behind the SLC's report or conclusions. The purpose of this article is to understand how a board-appointed committee can convince a court to dismiss and settle a derivative suit without showing detailed justification, and this is achieved by reviewing the statutes, case law, and theoretical concepts behind derivative suits. Thus, this article first focuses on the current framework under Minnesota law governing corporate directors’ duties and responsibilities, the business judgment rule, and the shareholders’ opportunity to bring derivative suits. Then, this article analyzes how these matters are handled by SLCs. In the fourth section, the story finally reaches the derivative suit against UHG, where the reader will see how it was dismissed and settled with minimal judicial review. The fifth part analyzes the standard the Minnesota Supreme Court adopted for reviewing SLC decisions to dismiss and settle derivative suits. The sixth and final portion assesses the scope of continuing director accountability in Minnesota.
Hogg, James F., "Finessing Well-Plead Derivative Lawsuits: The Implications of the Minnesota Supreme Court's Selection of Auerbach over Zapata" (2009). Faculty Scholarship. 164.