CITIphoto-Suzanne-Plunkett-150x150The difference between a direct claim by a stockholder against a corporation as compared to a derivative claim, is a subtlety that even the most astute corporate litigator cannot always easily discern. Many Delaware court opinions have addressed the nuances that distinguish between such claims–and to make it more interesting for everyone the Delaware Supreme Court has stated that some claims are both derivative and direct. This week, the Delaware Supreme Court addressed the issue again, considering a matter it accepted upon certification by the U.S. Court of Appeals for the Second Circuit.

In Citigroup Inc., et al. v. AHW Investment Partnership, et al., No. 641, 2015, 2016 WL 2994902 (Del. May 24, 2016), Delaware’s high court explained that because the claims did not involve corporate governance or fiduciary duty issues, that Delaware law did not apply to the direct versus derivative conundrum. Frank Reynolds of Thomson Reuters has a more detailed article about this case.