Kamen v. Kemper Financial Services, Inc.

PETITIONER: Kamen
RESPONDENT: Kemper Financial Services, Inc.
LOCATION: Oklahoma City Board of Education

DOCKET NO.: 90-516
DECIDED BY: Rehnquist Court (1990-1991)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 500 US 90 (1991)
ARGUED: Mar 27, 1991
DECIDED: May 20, 1991

ADVOCATES:
Joan M. Hall - on behalf of the Respondents
Michael R. Dreeben - on behalf of the Securities and Exchange Commission, as amicus curiae in support of the Petitioner
Richard M. Meyer - on behalf of the Petitioner

Facts of the case

Question

Media for Kamen v. Kemper Financial Services, Inc.

Audio Transcription for Oral Argument - March 27, 1991 in Kamen v. Kemper Financial Services, Inc.

Audio Transcription for Opinion Announcement - May 20, 1991 in Kamen v. Kemper Financial Services, Inc.

Thurgood Marshall:

In the other case, Kamen versus Kemper Financial Services Incorporated, No. 90-516, is here on certiorari to the United States Court of Appeals for the Seventh Circuit.

In a shareholder derivative action, the plaintiff typically must make a demand on the board of directors before bringing suit.

The question in this case is whether federal common law recognizes a futility exception in this requirement in a derivative action under the Investment Company Act of 1940.

In an opinion filed with the Clerk today, we hold that a court in such a suit must apply the futility exception as defined by state law.

We, therefore, reverse the judgment of the Seventh Circuit.