In re Fox Corporation Derivative Litigation, C.A. No. 2023-0418-BWD (Del. Ch. Apr. 28, 2025)
On April 28, 2025, Vice Chancellor Bonnie W. David issued a letter opinion granting a motion for leave to move for summary judgment brought by Defendants in the pending Fox Corporation derivative litigation. The decision is notable because the Court of Chancery had previously denied a motion to dismiss the complaint under Court of Chancery Rule 23.1 just four months prior.
In the prior decision on the motion to dismiss, Vice Chancellor Laster held that Plaintiffs’ allegations sufficiently pled demand futility because they raised a reasonable doubt regarding the disinterestedness or independence of at least four of Fox Corporation’s (“Fox”) eight directors. Specifically, the Court first “concluded that complaint alleges particularized facts sufficient to support a reasonable inference that Fox director K. Rupert Murdoch faces a substantial likelihood of liability for breaching his duty of loyalty by deciding in bad faith to have the Company violate the law.” 2025 WL 1220269, at *1. The Court then concluded that there were sufficient allegations that at least three other directors (including Jacques Nasser) lacked independence from Murdoch, “based on allegations of close and longstanding business and personal ties.” Id.
In seeking leave to move for summary judgment, Defendants sought to move on the “narrow and clear issue” of “whether there exists evidence to support the conclusion that Jacques Nasser is not independent of Rupert Murdoch and so cannot impartially evaluate the claims against him in this lawsuit.” Id. at *2. Defendants contended that the targeted motion for summary judgment on this independence issue could dispose of the case prior to the parties having to expend millions of dollars in litigation expense. Plaintiffs, on the other hand, argued that such targeted discovery and motion practice would be both inefficient and not consistent with the law of the case.
The Court began its analysis of the motion for leave by highlighting that “[w]hether to stage discovery and to permit briefing on summary judgment are matters of judicial discretion.” Id. The Court continued that it was “convinced that granting the Motion is the most efficient path forward” and that “doing so will not encourage seriatim motions” because “the parties should understand that the Court is disinclined to consider multiple dispositive motions before trial.” Id. Finally, the Court rejected Plaintiffs’ argument that the motion implicated the law of the case doctrine, because Defendants were not asking the Court to re-adjudicate the motion to dismiss and the sufficiency of the allegations at the pleadings stage but rather seeking to develop evidence that could allow for “a potential offramp if the theories pled in the complaint do not hold up.” Id.