Center on Corporate Governance
Center for Law and Economic Studies
When the legal history of the 1970's is written, it will note a significant shift in the way courts perceived shareholder litigation. Only a generation ago, the Supreme Court described the derivative action as "the chief regulator of corporate management."1 Even into the 1960's, those issues involving shareholder litigation that percolated up to the Supreme Court were typically resolved so as to extend the availability of a litigation remedy by removing arbitrary or overbroad barriers to the plaintiff.2
John C. Coffee Jr.,
The Unfaithful Champion: The Plaintiff as Monitor in Shareholder Litigation,
Law & Contemp. Probs.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/535