FILED
NOT FOR PUBLICATION APR 15 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
P. E. LUCAS, Derivatively on Behalf of No. 09-55857
Bank of America Corporation, and its
shareholders, D.C. No. 2:08-cv-06029-MRP-
MAN
Plaintiff - Appellant,
v. MEMORANDUM *
KENNETH D. LEWIS; et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the Central District of California
Mariana R. Pfaelzer, Senior District Judge, Presiding
Argued and Submitted December 7, 2010
Pasadena, California
Before: NOONAN, BERZON, and CALLAHAN, Circuit Judges.
The district court dismissed plaintiff P. E. Lucas’s complaint for failure to
comply with Federal Rule of Civil Procedure 23.1 and applicable Delaware law,
holding that Lucas failed adequately to plead wrongful refusal of her demand by
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Defendant Bank of America’s (the “Bank”) Board of Directors (the “Board”). In
so doing, the district court rejected Lucas’s theory, asserted in opposition to the
defendants’ motion to dismiss, that the Board constructively refused Lucas’s
demand when it caused or permitted the Bank to join the individual defendants’
motion to dismiss this case pursuant to Fed. R. Civ. P. 12(b)(6). The district court
subsequently denied Lucas leave to amend her complaint to add allegations
supporting such a theory of wrongful refusal. Lucas now appeals, contending the
district court erred (1) in holding it would be futile to amend the complaint to add
such allegations of wrongful refusal, and (2) in dismissing her case with prejudice.
We affirm.
Rule 23.1 and applicable Delaware law require a shareholder bringing a
derivative lawsuit to plead with particularity that the shareholder made a pre-suit
demand on the corporation and that the corporation wrongly refused to act. See
Rule 23.1(b)(A) and (B); Grimes v. Donald, 673 A.2d 1207, 1220 (Del. 1996).
The district court determined that, given the complexity of Lucas’s claims, Lucas
did not give the Board enough time to investigate before filing her complaint and
thus Lucas prematurely filed her complaint before the Board had responded to her
demand letter.
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Lucas does not challenge the district court’s determination that the Board
had not constructively refused her demand by failing to act on it within a
reasonable amount of time. Instead, Lucas argues that the Board constructively
and wrongfully refused her demand by causing the Bank to file a Rule 12(b)(6)
motion to dismiss, in addition to a Rule 23.1 motion. We cannot agree.
The 12(b)(6) motion only contended that Lucas’s complaint, as pleaded, did
not state a claim upon which relief could be granted. The motion did not take the
position—nor could it have—that none of the allegations in the demand letter were
true, nor did it take the position that none of the facts alleged in the demand letter
could possibly give rise to a claim for relief. As such, the Bank’s decision to file a
12(b)(6) motion could not constitute a refusal of Lucas’s demand within the
meaning of Delaware’s demand requirement. See Grimes, 673 A.2d at 1216.
We also affirm the district court’s decision to dismiss with prejudice.
Because Lucas had not satisfied the demand requirements prior to filing suit, the
district court’s decision to dismiss with prejudice was appropriate. See Simmonds
v. Credit Suisse Secs. (USA) LLC, 2011 WL 135693 *11-*12 (9th Cir. Jan. 18,
2011). Although the dismissal is “with prejudice,” both parties agree, as do we,
that Lucas is not precluded from later returning to court to allege wrongful refusal
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on the basis of events that had not yet occurred at the time of the district court’s
order. Cf. In re Sonus Networks, Inc., 499 F.3d 47, 61-63 (1st Cir. 2007).
For these reasons, we AFFIRM the district court.
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