In re Netflix, Inc. Stockholder Derivative Litigation
- Jon Tigar
- 4:22-cv-04134
- U.S. District Court · Northern District of California
- 2
In In re Netflix, Inc. Stockholder Derivative Litigation, Judge Tigar ordered the parties to explain whether the case should be paused because a related securities class action is pending.
The parties to the Netflix stockholder derivative litigation.
What happened
In In re Netflix, Inc. Stockholder Derivative Litigation, the court noted that the case involves allegations similar to those in a related securities class action before the same court.
The court explained that shareholder derivative cases are generally paused when they arise from the same facts as a securities class action and proceeding could affect the company's defense. The parties were ordered to discuss whether they could agree to pause this case.
Judge Tigar ordered the parties to file either an agreement and proposed order pausing the case or a joint written explanation by January 27, 2023, showing why it should not be paused. The order did not itself pause the case.
The detailed version
- In re Netflix, Inc. Stockholder Derivative Litigation · No. 4:22-cv-04134
- Jon Tigar
- Jan. 4, 2023
Background
The court stated that this stockholder derivative case raises allegations similar to those in a related securities class action, In re Netflix, Inc. Securities Litigation, Case No. 22-cv-02672-JST, pending before the same court.
Court’s Discussion
The court noted that courts generally stay, meaning temporarily pause, a shareholder derivative suit until the related securities class action concludes when both cases arise from the same factual allegations and evidence in the derivative case could jeopardize the company’s defense in the securities case. The court also noted that parties in two recent shareholder derivative cases before the court had agreed to stays or to pauses while the court addressed challenges to the related securities class-action complaints.
Order
The court ordered the parties to meet and discuss whether they could agree to a stay. By January 27, 2023, the parties had to file either a stipulation and proposed order staying the case or a joint written response showing why the case should not be stayed. Unless the court ordered otherwise, the matter would be considered without oral argument. The order did not itself stay the case or decide the underlying allegations. Judge Jon S. Tigar signed the order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.