You are here: / / THE “INTERNAL AFFAIRS DOCTRINE,” WHICH ADDRESSES RELATIONSHIPS...

THE “INTERNAL AFFAIRS DOCTRINE,” WHICH ADDRESSES RELATIONSHIPS BETWEEN A COMPANY AND ITS DIRECTORS AND SHAREHOLDERS, APPLIES TO THE OFFICERS AND DIRECTORS AT THE TIME OF THE CONDUCT ALLEGED IN THE LAWSUIT, NOT AT THE TIME THE LAWSUIT WAS BROUGHT; CONTRARY AUTHORITY SHOULD NO LONGER BE FOLLOWED (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined the “internal affairs doctrine” required the application of the law of the jurisdiction of FanDuel, a Scottish company.  The “internal affairs doctrine” addresses the relationships between a company and its directors and shareholders. The doctrine applies to officers and directors at the time of the conduct alleged in the suit, not at the time of the lawsuit. Prior authority to the contrary should not be followed:

We reject plaintiff’s argument that the internal affairs doctrine applies only to officers and directors at the time of the lawsuit. Rather, the question is whether defendants were “current officers [or] directors” … at the time of the events giving rise to the lawsuit … . Application of the doctrine to former directors protects the parties’ justified expectations, promotes uniformity and predictability of outcome, and prevents different laws from applying to different directors who all engaged in the same challenged transaction simply because of the date on which plaintiff chose to sue … . To the extent our past decisions could be interpreted as suggesting otherwise we clarify that the internal affairs doctrine applies to an officer or director at the time of the conduct at issue … . Eccles v Shamrock Capital Advisors, LLC, 2022 NY Slip Op 05750, First Dept 10-13-22

Practice Point: In corporation law, the “internal affairs doctrine,” which addresses the relationships between a company and its officers and directors, applies to the officers and directors at the time of the conduct alleged in the lawsuit, not at the time the lawsuit was brought. Authority to the contrary should no longer be followed.

 

You might also like
PLAINTIFF ENTITLED TO SUMMARY JUDGMENT ON HIS LABOR LAW 240 (1) CAUSE OF ACTION, PLAINTIFF FELL THROUGH AN OPENING COVERED BY A PIECE OF PARTICLE BOARD (FIRST DEPT).
ALLOWING POLICE OFFICER TO TESTIFY ABOUT VICTIM’S IDENTIFICATION OF DEFENDANT AT A SHOWUP WAS NOT BOLSTERING, VICTIM’S STATEMENT WAS AN EXCITED UTTERANCE.
POLICE OFFICER’S EXPECTATION THAT DEFENDANT WOULD BE ARRESTED DID NOT HAVE ANY BEARING ON WHETHER DEFENDANT WAS IN CUSTODY, MOTION TO SUPPRESS STATEMENT PROPERLY DENIED (FIRST DEPT).
CHILD ABUSE ALLEGATIONS SUPPORTED BY A PREPONDERANCE OF THE EVIDENCE, NO NEED TO DEMONSTRATE WHICH OF THE TWO RESPONDENTS ABUSED THE CHILD (FIRST DEPT).
GIVING A SECOND ALLEN CHARGE AND ALLOWING THE JURY TO CONTINUE DELIBERATING TO 5 OR 6 PM ON A FRIDAY, KNOWING THAT THREE JURORS HAD TRAVEL PLANS FOR MONDAY, DID NOT CONSTITUTE COERCING THE VERDICT, PROVIDING BOTH WRITTEN AND ORAL JURY INSTRUCTIONS WAS NOT IMPROPER (FIRST DEPT).
THE FIRST DEPARTMENT RULED THAT PLAINTIFF-TENANTS DID NOT DEMONSTRATE, AS A MATTER OF LAW, THAT DEFENDANTS ENGAGED IN A FRAUDULENT SCHEME TO DEREGULATE APARTMENTS WHILE RECEIVING J51 TAX BENEFITS; THE COURT OF APPEALS REVERSED (CT APP).
THE FAILURE TO MENTION THE JUSTIFICATION DEFENSE ON THE VERDICT SHEET WAS NOT PRESERVED FOR APPEAL BY AN OBJECTION AND THE INTEREST OF JUSTICE APPELLATE JURISDICTION WILL NOT BE INVOKED WHERE THERE WAS AMPLE OPPORTUNITY TO OBJECT (FIRST DEPT).
Procedure for Applying to be a “Defender” in America’s Cup Regatta, as Alleged in Complaint, Constitutes an “Offer” and “Acceptance”

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

THE MAJORITY DETERMINED PLAINTIFF DID NOT TIE HIS DIMINISHED RANGE OF MOTION... IN THIS REVERSE MORTGAGE FORECLOSURE ACTION, DEFENDANT WAS NAMED AS A BORROWER...