City of Pontiac Gen. Employees' Ret. Sys. v. Bush

City of Pontiac Gen. Employees' Ret. Sys. v. Bush

Opinion

ORDER GRANTING RULE 12(B)(6) MOTION TO DISMISS AND RULE 23.1 MOTION TO DISMISS

Re: ECF Nos. 45, 47, 48, 51

Before the Court are two motions to dismiss: a Rule 12(b)(6) motion to dismiss filed by current and former Cisco Board member Defendants, ECF No. 45, [*2]  and a Rule 23.1 motion to dismiss filed by nominal defendant Cisco Systems, Inc., ECF No. 48. The Court will grant both motions.

I. BACKGROUND

Cisco is a Delaware corporation headquartered in San Jose, California that manufactures and sells networking hardware, software, and telecommunications equipment. Plaintiff City of Pontiac General Employees' Retirement System has been a Cisco shareholder since 2007. ECF No. 1 ("Compl.") ¶ 22. City of Pontiac brings this shareholder derivative action on Cisco's behalf against Cisco Board members, also known as directors, for breach of fiduciary duty, unjust enrichment and federal securities violations. Id. ¶ 1. City of Pontiac alleges that the directors publicly misrepresented Cisco's commitment to and promotion of diversity through materially false assertions in Cisco's 2017, 2018, and 2019 proxy statements, thus violating their fiduciary duty to the company and its shareholders.

In August 2020, City of Pontiac sent a pre-suit demand letter to Cisco's Board, raising derivative claims on Cisco's behalf and requesting the Board investigate the matters and take remedial action by pursuing claims for damages and other relief. See ECF No. 1-1. The letter requested, [*3]  among other things, the addition of black directors to the Board. Id. at 34. Six weeks later (on September 23, 2020), City of Pontiac filed this lawsuit and noted that "Defendants [] declined to respond to Plaintiff's demand for action" and that "Cisco's Board still has not publicly or otherwise committed to undertaking the relief sought in the pre-suit demand." Compl. ¶ 101.

On April 30, 2021, Defendants filed a Rule 12(b)(6) motion to dismiss the complaint. ECF No. 45. That same day, Cisco filed a Rule 23.1 motion to dismiss. ECF No. 48.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.