‘I wear my reversals like badges of honor,” a trial judge once remarked when discussing his (largely positive) record on appeal. Based on our review of the Appellate Division’s decisions during the third quarter of 2012, New York’s intermediate appellate courts have been generously decorating trial judges. Some highlights of the past quarter in the four departments are noted below.
First Department
Derivative Suits. New York courts have traditionally decided whether shareholders’ claims are “derivative” or “direct” on a case-by-case basis. As a result, the distinction between derivative and direct lawsuits has been fact-dependent and difficult to pin down. In Yudell v. Gilbert,1 the First Department resolved that problem by adopting a Delaware test that provides a “clear and simple framework” for determining whether a shareholder’s claim is derivative or direct.
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