Delaware Business Litigation Report

Chancery Declines to Shift Costs to Derivative Plaintiffs

In re Oracle Corp. Deriv. Litig., C.A. No. 2017-0337-SG (Del. Ch. Dec. 28, 2023)
By rule, the prevailing party in Court of Chancery litigation is entitled to shift costs to the losing party, subject to the Court’s discretion. Here, in an unordinary derivative action, the Court declined to shift the costs of the prevailing individual defendants to the derivative plaintiffs. The plaintiffs had overcome a motion to dismiss, which led to the appointment of a special litigation committee by the company’s board. While the special committee had the power to seek dismissal, the committee determined that the derivative plaintiffs should be allowed to prosecute the claims on the company’s behalf. The plaintiffs ultimately lost after trial. As a result, the individual defendants were entitled to indemnification by the company, including for costs. The Court cited these circumstances as grounds for invoking equity to decline shifting costs via rule to the derivative plaintiffs.

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