Publications

On June 24, 2024, the Second Circuit reversed a district court’s dismissal of a shareholder’s Section 16(b) derivative suit for lack of constitutional standing, which the district court based on its determination that TransUnion LLC v. Ramirez, 594 U.S. 413 (2021) had abrogated Donoghue v. Bulldog Investors General Partnership, 696 F.3d 170 (2d Cir. 2012). Packer v. Raging Cap. Mgmt., 2024 U.S. App. LEXIS 15218 (2d Cir. 2024) (Cabranes, J.). In TransUnion, the Supreme Court stated that to determine whether an intangible injury is sufficiently concrete to confer constitutional standing, courts are to identify a “close historical or common-law analogue for the asserted injury.” In Donoghue, the Second Circuit identified breach of fiduciary duty as the analogue for a Section 16(b) injury and “categorically held that short-swing trading in an issuer’s stock by a 10% beneficial owner in violation of Section 16(b) of the Securities Exchange Act causes injury to the issuer sufficient for constitutional standing.” In this case, the Second Circuit held that “nothing in TransUnion undermines Donoghue[.]”