Policyholder variety lawsuit dismissed towards Qualcomm – Enterprise Insurance

A Delaware federal district court has dismissed derivative suits filed by shareholders against directors of Qualcomm Inc. who charged them with unlawful and discriminatory practices, citing the absence of black directors.

The plaintiffs in the US District Court in Wilmington on Monday accused the San Diego-based technology company, among other things, of breach of duty of loyalty and abuse of control, according to Becky Kiger, derived on behalf of Qualcomm Inc. against Steve Mollenkopf et. al. and Qualcomm Inc. Mr. Mollenkopf is the company's CEO and director, while the remaining defendants are current or former directors.

The verdict was reported by The D&O Diary.

The ruling was one of several diversity lawsuits filed against companies over the past year.

When the case was dismissed, the verdict stated: "Unlike typical derivative lawsuits, there was no specific event in which the company or defendants were involved that gained public notice and expedited the filing of those lawsuits."

Plaintiffs alleged the company's 2019 proxy statement was "materially false and misleading" when the governance committee's goal was to put together a board of directors that would bring "a variety of perspectives and competencies".

"Statements about the goals of a board of directors or a company are incontestable, as several courts have decided," says the judgment.

Among other arguments, plaintiffs also said the admission statement was false and misleading because the company had no African American on its board and no African American or other minority candidate had been elected to its board in the past six years.

This “does not necessarily mean that the Governance Committee has not accepted or instructed its search firms to include 'racially / ethnically diverse candidates' in its pool of candidates. It could simply mean that these candidates did not make it beyond the larger pool of candidates, ”said the judgment in which the complaint was dismissed

A company attorney said he did not comment on any pending litigation because plaintiffs were given permission to amend part of their lawsuit while plaintiffs' attorneys did not respond to a request for comment.

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