ELR Citation: 48 ELR 20002
No(s). 16, 2017 (Del. Dec 15, 2017)

The Delaware Supreme Court held that an energy company's shareholders cannot proceed with their suit against the company's directors and officers over the costs of addressing a coal ash spill into North Carolina's Dan River. In 2014, a storm water pipe ruptured beneath a coal ash containment pond, releasing 27 million gallons of coal ash slurry and wastewater into the Dan River. The shareholders sought damages on behalf of the energy company, including $145 million for fines and costs it paid to state and federal regulators. The directors sought to dismiss the derivative suit, arguing that the shareholders were required to make a demand of the board before instituting litigation. The shareholders argued that the demand was futile and that the directors acted in bad faith, disregarding environmental regulations and exposing the company to liability. The court held that the shareholders failed to show that that the directors consciously disregarded environmental problems at the site or improperly colluded with regulators to avoid remediating environmental problems. As such, they must first make a demand of the board. The case was dismissed.