City of Detroit Police & Fire Ret. Sys. v. Hamrock

City of Detroit Police & Fire Ret. Sys. v. Hamrock

Opinion

MEMORANDUM OPINION

Wilmington, Delaware

/s/ Leonard P. Stark

STARK, U.S. District Judge:

I. INTRODUCTION

Pending before the Court is Defendants Joseph Hamrock, Aristides S. Canris, Carolyn Y. Woo, Deborah A. Henretta, Eric L. Butler, Kevin T. Kabat, Michael E. Jesanis, Peter A. Altabef, Theodore H. Bunting, Jr., Wayne S. DeVeydt, and Richard L. Thompson's (the "Director Defendants") and Nominal Defendant NiSource Inc.'s ("NiSource" and, together with the Director Defendants, [*2]  hereinafter "Defendants") Motion to Dismiss the Verified Shareholder Derivative Complaint. (D.I. 28) Defendants seek to dismiss the complaint filed by Derivative Plaintiff City of Detroit Police and Fire Retirement System ("Plaintiff") for failure to make a pre-suit demand on the Director Defendants, as required under Federal Rule of Civil Procedure 23.1. (D.I. 29) Defendants additionally seek dismissal under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim on which relief may be granted. (Id.)

NiSource is a Delaware corporation with its principal place of business in Indiana. (D.I. 2 ("Complaint") ¶ 22) NiSource is in the business of natural gas distribution. (Id. ¶ 7) Among other things, NiSource oversees operations at subsidiary utility companies across the United States. (Id.) One such subsidiary is Columbia Gas of Massachusetts ("CMA"). (Id. ¶ 23)

Plaintiff is a shareholder of NiSource seeking to press claims against the Director Defendants derivatively on behalf of NiSource. (Id. ¶ 6) Specifically, Plaintiff alleges the Director Defendants breached the duty of loyalty they owed the company under Delaware law and violated Section 14(a) of the federal Exchange Act, 15 U.S.C. § 78n(a), by causing the company to issue false and misleading proxy statements in 2017 and [*3]  2018 ("Proxy Statements"). (Id. ¶ 105)¹

Defendants filed a declaration with exhibits (D.I. 30), as did Plaintiff (D.I. 33). The motion is fully briefed (see D.I. 29, 32, 36; see also D.I. 35, 37, 38) and was argued by teleconference on March 2, 2021 (D.I. 40) ("Tr.").

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