Apple Inc. v. Superior Court of Santa Clara Cnty.

*231 This writ petition presents an issue of first impression concerning the demand futility pleading requirement in a shareholder derivative suit under California law. The question is whether a plaintiff alleging derivative claims in an amended complaint following the grant of leave to amend must plead demand futility with respect to the board of directors in place as of the filing of the amended complaint or the initial complaint, when the composition of the board of directors has changed in the interim.

Petitioners Apple Inc. (Apple), Timothy Cook, Millard Drexler, and Arthur Levinson (together "petitioners") argue that fundamental principles of corporate law require the court to assess demand futility as to the board in place when the amended complaint is filed, consistent with the rule enunciated by the Delaware Supreme Court in Braddock v . Zimmerman (2006) 906 A.2d 776 ( Braddock ). Respondent Santa Clara County Superior Court declined to apply the Braddock rule, citing the absence of any published California authority on the issue. The superior court overruled petitioners' demurrer after finding that the amended complaint adequately alleged demand futility as to the board…