Dean Williamson, derivatively on behalf of Equinix, Inc. v. Charles J. Meyers, Adaire Fox-Martin, Nanci Caldwell, Gary Hromadko, Thomas Olinger, Christopher Paisley, Sandra Rivera, Fidelma Russo, Peter Van Camp, Jeetu Patel, Thomas A. Bartlett, Keith D. Taylor, Scott G. Kriens, William K. Luby, and Irving Lyons, III, and Equinix, Inc., Nominal Defendant

Summary

The United States District Court for the District of Delaware granted defendants’ motion to dismiss a shareholder derivative action brought on behalf of Equinix, Inc. The court held that the complaint failed to plead demand futility under Federal Rule of Civil Procedure 23.1 and Delaware’s Zuckerberg framework, and failed to state a claim under Section 14(a) of the Exchange Act and Rule 14a-9. The court declined to exercise supplemental jurisdiction over the Delaware-law claims.

Holdings

1. Plaintiff failed to plead with particularity that pre-suit demand on Equinix's board would have been futile. Plaintiff failed to establish demand futility as to Caldwell, Fox-Martin, Rivera, Olinger, and Russo, who constituted a majority of the eight-member Demand Board.
2. Because Plaintiff characterized Count I as a negligence claim, Plaintiff failed to plead a non-exculpated claim sufficient to establish demand futility.
3. Plaintiff failed to state a Section 14(a) claim because the complaint did not allege an essential link between the proxy statements and a specific shareholder-authorized corporate transaction that directly caused the alleged pecuniary injury.
4. The court declined to exercise supplemental jurisdiction over the Delaware-law claims after dismissing the sole federal claim.

Questions Presented

1. Whether Plaintiff adequately pleaded demand futility under Federal Rule of Civil Procedure 23.1 and the Delaware Supreme Court's Zuckerberg test.
2. Whether Plaintiff stated a Section 14(a) and Rule 14a-9 claim by adequately pleading transaction causation.
3. Whether the court should retain supplemental jurisdiction over the Delaware-law claims after dismissing the sole federal claim.

Disposition

dismissed