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An Introduction to the Law of Corporations: Cases and Materials, Fall 2017

Patrick Tooley and Kevin Lewis, Plaintiffs Below, Appellants, v. Donaldson, Lufkin, & Jenrette, Inc., John Steele Chalsty, Henri De Castries, Michael Hegarty, Edward D. Miller, Stanley B. Tulin, Denis Duverne, Henri G. Hottinguer, W. Edwin Jarmain, Joe L. Roby, Hamilton E. James, Anthony F. Daddino, David F. DeLucia, Stuart M. Robbins, Francis Jungers, W.J. Sanders III, Louis Harris, Jane Mack Gould and John C. West, Defendants Below, Appellees.

In Tooley, the court was asked to determine whether shareholder litigation is direct or derivative. Rather than rely on a more traditional, and cumbersome, “special injury” test, the court in Tooley announced a new, simpler test for determining whether a stockholder action is direct or derivative.

Since Tooley other jurisdictions, like New York, have abandoned their own versions of the special injury in favor of specifically adopting Delaware's Tooley standard.