Derivative Actions

(a) Prerequisites. This rule applies when one or more shareholders or members of a corporation or an unincorporated association bring a derivative action to enforce a right that the corporation or association may properly assert but has failed to enforce. The derivative action may not be maintained if it appears that the plaintiff does not fairly and interests of adequately shareholders or members who are similarly situated the corporation or association. the right of in enforcing represent the (b) Pleading Requirements. The complaint must be verified and must: (1) allege that the plaintiff was a shareholder or member at the time of the transaction complained of, or that the plaintiff’s share or membership later devolved on it by operation of law; (2) allege that the action is not a collusive one to confer jurisdiction that the court would otherwise lack; and (3) state with particularity: (A) any effort by the plaintiff to obtain the desired action from the directors or comparable authority and, if necessary, from the shareholders or members; and (B) the reasons for not obtaining the action or not making the effort. (c) Settlement, Dismissal, and Compromise. A derivative action may be settled, voluntarily dismissed, or compromised only with the court’s approval. Notice of a proposed or settlement, compromise must be given to shareholders or members in the manner that the court orders. dismissal, voluntary (Added May 1, 2002; as amended Nov. 3, 2008.) Rules Committee Notes 2002 Adoption This is a new rule. This version of RCFC 23.1 is in conformity with the corresponding FRCP. The Federal Circuit has ruled that under certain circumstances, this court has jurisdiction to hear shareholder derivative suits. First Hartford Corp. Pension Plan & Trust v. United States, 194 F.3d 1279 (Fed. Cir. 1999). Cf. Branch v. United States, 69 F.3d 1571 (Fed. Cir. 1995); and California Housing Sec., Inc. v. United States, 959 F.2d 955 (Fed. Cir. 1992). 2008 Amendment The language of RCFC 23.1 has been amended to conform to the general restyling of the FRCP.