Thompson v. Scientific Atlanta, Inc., A05A1447.
| Court | United States Court of Appeals (Georgia) |
| Writing for the Court | Andrews |
| Citation | 275 Ga. App. 680,621 S.E.2d 796 |
| Parties | THOMPSON v. SCIENTIFIC ATLANTA, INC. |
| Docket Number | No. A05A1447.,A05A1447. |
| Decision Date | 30 September 2005 |
v.
SCIENTIFIC ATLANTA, INC.
Page 797
Joshua A. Millican, Atlanta, for Appellant.
Oscar N. Persons, Susan E. Hurd, Kelly C. Wilcove, Alston & Bird, Atlanta, Gerald Davidson, Jr., Davidson & Tucker, LLP, Duluth, for Appellee.
ANDREWS, Presiding Judge.
Paul Thompson, a shareholder in Scientific Atlanta, Inc. (SA), appeals from the trial court's dismissal, pursuant to OCGA § 14-2-744(a), of his shareholders' derivative action against SA.
SA is a Gwinnett County corporation engaged in the design, development, and manufacturing of networks used by cable operators to distribute video and other services to customers. In 1998, SA began shipping newly developed digital set-tops (units placed on televisions to enable access to cable and other services) and other digital network equipment that replaced analog set-tops and equipment previously sold by SA.
In its Third Quarter Fiscal Year 2001 earnings release on April 19, 2001, SA reported record financial results, but indicated it expected to sustain business performance at the present level rather than expand the business at growth rates previously achieved. During SA's Fourth Quarter Fiscal Year 2001, certain officers and directors traded their stock in the company during SA's open trading window and these sales were in line with their previous trading histories.
On July 19, 2001, financial results for the Fourth Quarter Fiscal Year 2001 and for the entire fiscal year were released by SA, reflecting a record year for SA in many ways. The announcement also indicated, however, that new orders and sales declined in the Fourth Quarter [275 Ga. App. 681] from the Third Quarter. Following this announcement, SA's stock price dropped as numerous analysts expressed concern about the apparent declining demand for digital set-tops in the cable industry and what effect that would have on SA's growth.
On December 10, 2001, SA received a "derivative demand" letter from Thompson in which he alleged that the stock price drop had been due to breaches of fiduciary duty by members of the Board of Directors and demanded that SA sue the defendants for unspecified damages. SA responded by letter, requesting additional information concerning the allegations. No response was received from Thompson.
On February 16, 2002, the Board of Directors held a special meeting and appointed three members of the Board who had not sold stock in the questioned transactions to serve as the Special Litigation Committee (SLC) provided for in OCGA § 14-2-744(a).1 The SLC was to conduct an investigation of Thompson's allegations. On May 15, 2002, the Board approved a resolution that provided the SLC with full power and authority to make final binding determinations on the Board's behalf regarding the derivative action. The SLC had full access to all SA personnel, advisors, and records, and SA directed all officers and employees to cooperate with the SLC. The SLC retained independent legal counsel and a special accounting advisor.
On November 14, 2003,2 Thompson filed his complaint, naming as defendants all members of the Board of Directors and numerous senior corporate officers, claiming breaches of fiduciary duties by these individuals, including releasing inaccurate financial information and then engaging in stock sales based on alleged insider information.
On February 9, 2004, after interviewing numerous witnesses, reviewing voluminous documents, and consulting with independent legal counsel and financial advisors, the SLC issued its report, which determined that Thompson's claims were without merit and
Page 798
contrary to the best interests of SA and its shareholders.
Pursuant to this report, the Board of Directors adopted the SLC's recommendations and a motion to dismiss Thompson's lawsuit was filed on March 18, 2004. A copy of the motion and the SLC's report were served on Thompson by regular mail that same...
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Deal v. Tugalo Gas Co., 19-14336
...make its determination to recommend dismissal in good faith after a reasonable investigation. See Thompson v. Scientific Atlanta, Inc. , 275 Ga.App. 680, 621 S.E.2d 796, 799 (2005). Now, to Deal's complaint. Deal brought Counts I, II, VI, VII, IX, X, XI, XIII, XIV, XV, XVI, and XVII—a mix o......
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Sojitz Am. Capital Corp. v. Kaufman, 33735.
...787 (Del.1981) (classifying these motions as “a hybrid summary judgment motion for dismissal”); Thompson v. Scientific Atlanta, Inc., 275 Ga.App. 680, 683, 621 S.E.2d 796 (2005) (such motions do not technically fit within category of rule 12[b] motion). Accordingly, to facilitate inquiries ......
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Sojitz Am. Capital Corp. v. Kaufman, AC 33735
...787 (Del. 1981) (classifying these motions as ''a hybrid summary judgment motion for dismissal''); Thompson v. Scientific Atlanta, Inc., 275 Ga. App. 680, 683, 621 S.E.2d 796 (2005) (such motions do not technically fit within category of rule 12 [b] motion). Accordingly, to facilitate inqui......
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Conroy ex rel. Aflac, Inc. v. Daniel P. Amos, Paul S. Amos Ii, Douglas W. Johnson, Charles B. Knapp, Barbara K. Rimer, Elizabeth Hudson, W. Paul Bowers, Joseph L. Moskowitz, Melvin T. Stith, & Aflac, Inc., CASE NO. 4:18-CV-33 (CDL)
..."to facilitate inquiries into independence, good faith, and the reasonableness of the investigation," Thompson v. Sci. Atlanta, Inc. , 275 Ga.App. 680, 621 S.E.2d 796, 799 (2005) (quoting Kaplan v. Wyatt (Kaplan II ), 499 A.2d 1184, 1192 (Del. 1985) ), such discovery at this stage of a deri......
-
Deal v. Tugalo Gas Co., 19-14336
...make its determination to recommend dismissal in good faith after a reasonable investigation. See Thompson v. Scientific Atlanta, Inc. , 275 Ga.App. 680, 621 S.E.2d 796, 799 (2005). Now, to Deal's complaint. Deal brought Counts I, II, VI, VII, IX, X, XI, XIII, XIV, XV, XVI, and XVII—a mix o......
-
Sojitz Am. Capital Corp. v. Kaufman, 33735.
...787 (Del.1981) (classifying these motions as “a hybrid summary judgment motion for dismissal”); Thompson v. Scientific Atlanta, Inc., 275 Ga.App. 680, 683, 621 S.E.2d 796 (2005) (such motions do not technically fit within category of rule 12[b] motion). Accordingly, to facilitate inquiries ......
-
Sojitz Am. Capital Corp. v. Kaufman, AC 33735
...787 (Del. 1981) (classifying these motions as ''a hybrid summary judgment motion for dismissal''); Thompson v. Scientific Atlanta, Inc., 275 Ga. App. 680, 683, 621 S.E.2d 796 (2005) (such motions do not technically fit within category of rule 12 [b] motion). Accordingly, to facilitate inqui......
-
Conroy ex rel. Aflac, Inc. v. Daniel P. Amos, Paul S. Amos Ii, Douglas W. Johnson, Charles B. Knapp, Barbara K. Rimer, Elizabeth Hudson, W. Paul Bowers, Joseph L. Moskowitz, Melvin T. Stith, & Aflac, Inc., CASE NO. 4:18-CV-33 (CDL)
..."to facilitate inquiries into independence, good faith, and the reasonableness of the investigation," Thompson v. Sci. Atlanta, Inc. , 275 Ga.App. 680, 621 S.E.2d 796, 799 (2005) (quoting Kaplan v. Wyatt (Kaplan II ), 499 A.2d 1184, 1192 (Del. 1985) ), such discovery at this stage of a deri......