Three Lessons From Three Years of Post-‘Marchand’ Caselaw

November 16, 2022

Publication| Corporate & Chancery Litigation| Corporate Governance| Corporate Transactions| Mergers & Acquisitions| Special Committees & Investigations

Just over three years ago, the Delaware Supreme Court held in Marchand v. Barnhill that the failure to maintain an internal monitoring system that could have prevented a deadly listeria outbreak gave rise to an actionable oversight claim against the board of directors under In re Caremark International Inc. Derivative Litigation. Although the Delaware Supreme Court has famously stated that Caremark claims are “possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment,” Marchand seemed to invite deeper inquiry into oversight claims, as the Delaware courts, in four of the ensuing nine opinions addressing Caremark claims, denied the defendants’ motion to dismiss. This article offers a high-level snapshot of the current state of Caremark jurisprudence by highlighting three key takeaways from the 21 published trial court opinions addressing motions to dismiss Caremark claims issued post-Marchand.

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