International Brotherhood of Electrical Workers Local No. 129 Benefit Fund v. Tucci, et al. (and eight companion cases) (Lawyers Weekly No. 10-038-17)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us   SJC-12137   International Brotherhood of Electrical Workers LOCAL NO. 129 BENEFIT FUND[1]  vs.  JOSEPH M. TUCCI & others[2] (and eight consolidated cases[3]).       Suffolk.     November 7, 2016. – March 6, 2017.   Present:  Gants, C.J., Botsford, Lenk, Hines, Gaziano, Lowy, & Budd, JJ.     Corporation, Stockholder’s derivative suit, Merger, Sale of assets, Valuation of stock, Board of directors.  Practice, Civil, Class action, Dismissal.       Civil actions commenced in the Superior Court Department on October 15, October 16, October 19, October 20, October 23, October 28, and October 29, 2015.   After consolidation, a motion to dismiss was heard by Edward P. Leibensperger, J.   The Supreme Judicial Court granted an application for direct appellate review.     Jason M. Leviton (Michael G. Capeci, of New York, & Joel A. Fleming also present) for International Brotherhood of Electrical Workers Local No. 129 Benefit Fund & others. Thomas J. Dougherty (Kurt Wm. Hemr also present) for Joseph M. Tucci & others. John Pagliaro & Martin J. Newhouse, for New England Legal Foundation, amicus curiae, submitted a brief. Ian D. Roffman & Matthew J. Connolly, for Associated Industries of Massachusetts, amicus curiae, submitted a brief.     BOTSFORD, J.  In these consolidated cases, shareholders of a publicly traded corporation claim that a merger transaction proposed by the board of directors will result in the effective sale of the corporation for an inadequate price.  The question we consider is whether they may bring that claim directly against the board members, or must bring it as a derivative claim on behalf of the corporation.  We answer that the claim must be brought derivatively.[4] Background.  The plaintiffs appeal from the dismissal of their first amended class action complaint (complaint)[5] alleging breaches of fiduciary duty by the board of directors of EMC Corporation (EMC) arising from a merger between EMC and Denali Holding Inc. and Dell Inc. (collectively, Dell).  At the time that they commenced these actions, the plaintiffs were shareholders of EMC; the proposed merger would result in the shareholders receiving a cash payment in exchange for their EMC stock.  The plaintiffs’ complaint alleges that they bring the actions on behalf of a class consisting of “all other shareholders of EMC . . . who are or will be deprived of the opportunity to maximize the value of their shares of EMC […]

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