203216P.pdf   04/07/2022  Carpenters' Pension Fund of IL  v.  Michael Neidorff
   U.S. Court of Appeals Case No:  20-3216
   U.S. District Court for the Eastern District of Missouri - St. Louis   
   [PUBLISHED] [Shepherd, Author, with Wollman and Kobes, Circuit Judges] 
   Civil Case - Shareholder Derivative Action. Following the merger of 
   Centene Corporation and Health Net, Inc., Centene shareholders brought 
   claims against certain former and current directors and officers, claiming 
   a violation of section 14(a) of the Securities Exchange Act of 1934; 
   breach of fiduciary duties of good faith, fair dealing, and due care; 
   breach of fiduciary duty of loyalty, good faith, and candor in connection 
   with securities law violations; insider trading; and unjust enrichment. 
   The shareholders did not make a pre-suit demand on Centene's Board of 
   Directors and the district court dismissed the complaint with prejudice, 
   finding the shareholders had failed to plead particularized facts 
   demonstrating that demand would have been futile, as required in Fed.R. 
   Civ. P. 23.1(b)(3). The standard for determining futility under Delaware 
   law is set forth. The shareholders failed to plead facts showing the proxy 
   statement contained a material misrepresentation or omission and thus 
   failed to plead particularized facts demonstrating at least half the Board 
   faced a substantial likelihood of liability of their section 14(a) claim; 
   because Centene's articles of incorporation contained an exculpation 
   provision limiting directors' liability under Delaware law, none of the 
   directors faced a substantial likelihood of liability on duty of care, 
   duty of loyalty or bad faith claims. Shareholders did not plead 
   particularized facts relating to breach of duty of disclosure. In claims 
   of insider trading by two of the eight directors, the district court 
   correctly found shareholders failed to demonstrate a majority of the Board 
   faced a substantial likelihood of liability for insider trading. Same 
   analysis applied to unjust enrichment claims. The district court's 
   dismissal is affirmed.