(a) Subject to subsection (b) of this section, a member may maintain a direct action in the Superior Court against another member, a manager, or the limited liability company to enforce the member's rights and otherwise protect the member's interests, including rights and interests under the operating agreement or this chapter or arising independently of the membership relationship.
(b) A member maintaining a direct action under this section shall plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited liability company.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 901 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
A member may maintain a derivative action in the Superior Court to enforce a right of a limited liability company if:
(1) The member first makes a demand on the other members in a member-managed limited liability company, or the managers of a manager-managed limited liability company, requesting that they cause the company to bring an action to enforce the right, and the managers or other members do not bring the action within a reasonable time; or
(2) A demand under paragraph (1) of this section would be futile.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 902 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) Except as otherwise provided in subsection (b) of this section, a derivative action under § 29-808.02 shall be maintained only by a person that is a member at the time the action is commenced and remains a member while the action continues.
(b) If the sole plaintiff in a derivative action dies while the action is pending, the Superior Court may permit another member of the limited liability company to be substituted as plaintiff.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 903 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
In a derivative action under § 29-808.02, the complaint shall state with particularity:
(1) The date and content of plaintiff's demand and the response to the demand by the managers or other members; or
(2) If a demand has not been made, the reasons a demand under § 29-808.02(1) would be futile.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 904 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) If a limited liability company is named as or made a party in a derivative proceeding, the company may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the company. If the company appoints a special litigation committee, on motion by the committee made in the name of the company, except for good cause shown, the Superior Court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation. This subsection shall not prevent the court from enforcing a person's right to information under § 29-804.10 or, for good cause shown, granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.
(b) A special litigation committee may be composed of one or more disinterested and independent individuals, who may be members.
(c) A special litigation committee may be appointed:
(1) In a member-managed limited liability company:
(A) By the consent of a majority of the members not named as defendants or plaintiffs in the proceeding; and
(B) If all members are named as defendants or plaintiffs in the proceeding, by a majority of the members named as defendants; or
(2) In a manager-managed limited liability company:
(A) By a majority of the managers not named as defendants or plaintiffs in the proceeding; and
(B) If all managers are named as defendants or plaintiffs in the proceeding, by a majority of the managers named as defendants.
(d) After appropriate investigation, a special litigation committee may determine that it is in the best interests of the limited liability company that the proceeding:
(1) Continue under the control of the plaintiff;
(2) Continue under the control of the committee;
(3) Be settled on terms approved by the committee; or
(4) Be dismissed.
(e) After making a determination under subsection (d) of this section, a special litigation committee shall file with the Superior Court a statement of its determination and its report supporting its determination, giving notice to the plaintiff. The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made its recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court shall enforce the determination of the committee. Otherwise, the court shall dissolve the stay of discovery entered under subsection (a) of this section and allow the action to proceed under the direction of the plaintiff.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 905 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) Except as otherwise provided in subsection (b) of this section:
(1) Any proceeds or other benefits of a derivative action under § 29-808. 02, whether by judgment, compromise, or settlement, belong to the limited liability company and not to the plaintiff; and
(2) If the plaintiff receives any proceeds, the plaintiff shall remit them immediately to the company.
(b) If a derivative action under § 29-808.02 is successful in whole or in part, the Superior Court may award the plaintiff reasonable expenses, including reasonable attorney's fees and costs, from the recovery of the limited liability company.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 906 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
