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In a multiforum case that was ultimately decided in the Delaware Supreme Court, our client Allergan faced an action brought by its shareholders following its $600 million settlement with the government over alleged off-label promotion of its BOTOX® product. Fish handled this precedent-setting litigation as part of a multifirm team.

"The decision of that court—which became a landmark precedent—ruled that once a shareholder action has been decided by another jurisdiction, any successive case must be governed by the full faith and credit clause. Allergan’s motion to dismiss was thus granted, a victory for our client."

In-Depth

In a multiforum case that was ultimately decided in the Delaware Supreme Court, our client Allergan faced an action brought by its shareholders following its $600 million settlement with the government over alleged off-label promotion of its BOTOX® product. Fish handled this precedent-setting litigation as part of a multifirm team.

The shareholders first filed the action in California district court, charging Allergan’s directors with breach of fiduciary duties. The district court granted Allergan’s motion to dismiss, but before doing so, other shareholders had already filed copycat lawsuits in several other courts, including the Delaware Court of Chancery.

Several complex legal issues were involved, but the central one concerned whether the case should be governed by the “full faith and credit” clause of the Constitution, which provides for one state recognizing the judicial decisions of another, or by the “internal affairs doctrine,” in which corporate disputes are subject to the laws of the state where the corporation is registered, which for Allergan is Delaware.

In the Court of Chancery, Allergan argued that the California decision (i.e., the full faith and credit argument) should be followed. The court denied Allergan’s motion to dismiss, reasoning that Delaware’s internal affairs doctrine be applied. Seeking a reversal of this decision, we took the case to the Delaware Supreme Court.

The decision of that court—which became a landmark precedent—ruled that once a shareholder action has been decided by another jurisdiction, any successive case must be governed by the full faith and credit clause. Allergan’s motion to dismiss was thus granted, a victory for our client.