Supreme Court Reverses Important Decision Giving Delaware Primacy
Pyott v. Louisiana Municipal Police Employees' Retirement System, No. 380, 2012 (April 4, 2013)
In a major decision, the Delaware Supreme Court dismissed a derivative suit on the basis that a prior dismissal of essentially the same suit by a different stockholder barred the Delaware litigation. This reverses the Court of Chancery that held the suit might proceed despite the dismissal of the other litigation by a Federal Court in California.
Pyott may have major implications for derivative litigation, at least when multi-state cases are filed. Defendants may be expected to race to file motions to dismiss in what they see as the most favorable jurisdiction or in those cases where they see less formidable opponents.
It is also noteworthy that the Supreme Court rejected any presumption that a "fast filer" is an inadequate plaintiff.