Teamsters Local 443 Health Services & Insurance Plan v. Chou
Delaware Court of Chancery
2020 WL 5028065 (2020)
- Written by Matthew Celestin, JD
Facts
Teamsters Local 443 Health Services & Insurance Plan (Teamsters) (plaintiff) held stock in AmerisourceBergen Corporation (ABC) (defendant). In 2001, ABC executed a merger by which, among other things, it acquired a subsidiary that was in the business of buying and selling liquid cancer-treatment drugs. The subsidiary conducted an illegal scheme in which it skimmed excess drugs from single-dose syringes and used the excess to create additional prefilled syringes of the drugs that were unsterile and contaminated. The subsidiary falsified documents to conceal its scheme. In 2007, ABC director John Chou (defendant) engaged a law firm to assess the adequacy of ABC’s oversight and compliance program. The law firm drafted a report identifying several shortcomings and offering corrective recommendations, but ABC never implemented the recommendations. In 2012, the Food and Drug Administration (FDA) executed a search warrant on the subsidiary’s facilities. The subsidiary ultimately pleaded guilty for its syringe-filling scheme. Teamsters subsequently sued Chou and other ABC directors (collectively, the directors) (defendants), asserting that they failed to exercise adequate oversight of the subsidiary in breach of their fiduciary duties. The directors moved to dismiss.
Rule of Law
Issue
Holding and Reasoning (Glasscock, J.)
What to do next…
Here's why 832,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,400 briefs, keyed to 994 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.
