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Judgment for Plaintiff in Derivative Action Reversed, and False Advertising Matter

By FindLaw Staff on August 03, 2010 8:49 AM

Badger v. Southern Farm Bureau Life Ins. Co., No. 09-12999, concerned a shareholders' derivative action stemming from defendant-corporation's purchase of a debenture held by plaintiff shareholders, which was their corporation's primary asset.  The Eleventh Circuit reversed judgment for plaintiff on the grounds that 1) any duty to disclose would have been satisfied by disclosure to the corporation's officers or directors; and 2) there was no suggestion that defendant exerted improper control over the company's officers or board of directors, or that defendant conspired with company's agents to deprive company shareholders of material information.

Osmose, Inc. v. Viance, LLC, No. 09-15563, involved a false advertising action based on defendant's release of several advertising statements expressing serious safety concerns regarding the use of wood treated with plaintiff's copper-based wood preservative.  The court of appeals affirmed an injunction in favor of plaintiff in part on the grounds that 1) defendant's statements regarding serious safety concerns arguably could be construed as more than general statements of opinion; and 2) the district court did not clearly err in finding that the tests performed did not support defendant's conclusions regarding the safety and efficacy of the preservative.  However, the court vacated in part on the ground that the district court abused its discretion by enjoining defendant regarding plaintiff's environmental advertisements because the court neither identified nor analyzed any statements by defendant to that effect.

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