Also known as: representative actions · representative suit · representative suits · derivative action
Written by attorneys · grounded in primary & secondary sources — see below
A lawsuit brought by one or more persons to enforce a right belonging to an entity or group of similarly situated persons.
Robert Rivera joined Riverstone Manufacturing as a member before the managers entered a contract that diverted company assets. After the managers refused to act, Robert remained a member and filed suit to recover the diverted funds for the LLC. The court allowed the action to proceed because Robert satisfied the membership requirements at both the time of the conduct and the commencement of suit.
Ruby Rivera became a limited partner in Raven Logistics after the general partners approved an unfavorable affiliate contract. Ruby made a demand that the general partners bring suit, which they ignored. She then commenced an action to enforce the partnership's rights under the contract.
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Renata Russo prevailed in a derivative suit on behalf of Reliance Insurance, obtaining a monetary judgment against a former manager. The court directed that the entire recovery be paid to the LLC rather than to Renata personally.
Rowan Russell settled a derivative action brought for Riverside Healthcare. The court ordered the settlement funds paid directly to the limited partnership, not to Rowan.
Renee Rogers succeeded in a derivative suit that produced a substantial recovery for Riverstone Manufacturing. The court granted her request for reasonable attorneys' fees and costs to be paid from the LLC's recovery.
Roland Rhodes, as class representative, reached a proposed settlement in a suit alleging widespread harm to a large group of similarly situated persons. The court reviewed the fairness of the settlement to absent class members before granting approval.
Only a person who is a member both at the time the conduct occurred and at the time the action is commenced may maintain the action.
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Any proceeds or benefits belong to the LLC or limited partnership, not to the individual plaintiff.
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Yes. When the action succeeds in whole or in part, the court may award the plaintiff reasonable expenses, including attorneys' fees, from the entity's recovery.
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Yes. The member or partner ordinarily must first make a demand on the managers or general partners unless demand would be futile.
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…of corporate democracy and the derivative suit are potent tools to redress the conduct of a torpid or unfaithful management. The derivative action developed in equity to enable shareholders to sue in the corporation’s name where those in control of the company refused to assert a claim belonging to it. The nature of the action is…