The Supreme Court of the State of Delaware issued an opinion on January 3rd, 2011 affirming the dismissal of
claims against PricewaterhouseCoopers (PwC) in the Teachers Retirement System
of Louisiana derivative suit. This suit, as described further below,
relates to an earlier fraud case at AIG.
...The New York Court of
Appeals accepted the certified question, and issued an opinion holding
that the in pari delicto doctrine would bar such a
4) In their supplemental
briefing, Derivative Plaintiffs argued that the Kirschner decision
is not binding on the issue of imputation of wrongdoing, which, they
claim, is a question of Delaware law.
5) We reject this argument
for two reasons. First, Derivative Plaintiffs acknowledged in their
Opening Brief that, under the facts of this case, imputation is a question
of New York law. Second, in our certification request, this Court sought
resolution of a "determinative question of New York law . . . ."4
The Kirschner decision
provided a determinative answer, which this Court must follow....
1A.I.G., Inc. v.
Greenberg, 965 A.2d 763 (Del. Ch. 2009).
System of Louisiana v. PricewaterhouseCoopers LLP, 998 A.2d 280, 282-3
3 Kirschner v. KPMG LLP
et al., 2010 WL 4116609 at *14 (N.Y.).
A PwC spokesperson provided this comment on the decision
"In affirming the dismissal
of these claims, the Delaware Supreme Court followed the definitive statement
of law already issued by New York's highest court. In October, the New
York court rejected calls to alter 200 years of legal precedent to bring about
the expansion of third-party liability sought by derivative plaintiffs. The
Delaware Supreme Court considered that advice and affirmed the dismissal of the
Read this article in its entirety at the re: The Auditors, a blog
by Francine McKenna.