In re McDonald's Stockholder Litigation

In the 2023 case that follows, stockholders sued corporate officers (as well corporate directors) derivatively on a theory that that the officers violated their duty of good faith to the corporation by engaging in and failing to mitigate a corporate culture of sexual harrassment. This case deals with a number of important issues, including the liability of corporate officers for fiduciary duty violations and the reach of the new § 102(b)(7) provision that extends exculpation to corporate officers. This case also seeks to extend corporate oversight liability to new ways. While the stockholders' case against McDonald's human resources officer survived this initial 12(b)(6) motion to dismiss, the broader case against the corporation's board of directors failed on a later Rule 23.1 motion to dimiss.

After you read this case, think through why the case against the board might have collapsed and what the effect of the stockholders' failure to succeed at the Rule 23.1 motion to dismiss agains the board had on the disposition of the litigation against the corporation's human resources officer.