TRENTON, N.J. (Legal Newsline) – A shareholder was unable to prove he had the right to certain documents in a New Jersey court.
“It is not for us to expand the common law - to the extent it applies at all - to recognize a right to inspect documents that did not exist, but for the requester’s initial demands,” the Superior Court of New Jersey Appellate Division ruled June 1.
The decision upholds a ruling from the Superior Court of New Jersey, Chancery Division.
R.A. Feuer, a Merck & Co. Inc. shareholder, initially filed a lawsuit against the company requesting its corporate records. He then filed an appeal after the lower court dismissed his complaint.
The appeals court affirmed the dismissal under the notion the request went beyond the typical “books and records of account, minutes, and record of shareholders,’” that he was allowed to under New Jersey law, according to the appeals court.
It also noted the plaintiff didn’t correctly argue a 1988 amendment when he stated the regulation expands how far a court can go when it comes to a shareholder’s evaluation. Instead, the regulation puts a cap on the court’s permission. The court also pointed out the plaintiff did not rely on common law properly. Considering these factors, the appeals court affirmed and backed the lower court’s decision to dismiss the plaintiff’s case.
The ruling states Feuer owned 288 shares in the defendant’s stock. He requested 12 different categories of documents from the company as he looked for proof Merck erred when it denied his request that its board of directors begin a lawsuit against itself and its senior management that was behind Merck’s acquisition of a separate pharmaceutical firm.
“Feuer asserted the acquisition was ill-advised and reckless,” stated the appeals court.
The appeals court disagreed that Feuer was entitled to the information and pointed out the documents Feuer wanted do not even relate to the acquisition, causing the plaintiff’s common law argument to fall short. It stated there is no precedent in which a shareholder was successful in requiring documents outside of the permitted allowance under certain New Jersey statutes.