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An Introduction to the Law of Corporations: Cases and Materials

Tooley v. Donaldson Lufkin, & Jenrette, Inc.

In Tooley, the court was asked to determine whether shareholder litigation is direct or derivative. Rather than rely on a more traditional, and cumbersome, "special injury" test, the court in Tooley announced a new, simpler test for determining whether a stockholder action is direct or derivative. Since Tooley other jurisdictions, like New York, have abandoned their own versions of the special injury in favor of specifically adopting Delaware's Tooley standard.