In re Sapient Corp. Derivative Litigation (Suffolk Superior Court, Massachusetts)

Sapient Corporation ("Sapient") retained us to represent it with Skadden, Arps, Slate, Meagher & Flom, LLP ("Skadden Arps") in multiple derivative actions alleging that Sapient and its board of directors failed to maintain adequate internal controls to ensure the accuracy of Sapient's financial statements, resulting in the issuance of allegedly backdated options. After the plaintiffs filed actions against Sapient in August 2006, the state court actions were consolidated into the Business Litigation Session in Suffolk County Superior Court in January 2007. Following the consolidation, together with Skadden Arps, we moved to dismiss on the grounds that the plaintiff shareholders failed to make a pre-suit demand to Sapient, which is a requirement before bringing a derivative action under Delaware law. We further argued that the required pre-suit demand was not excused due to any "futility" exceptions. Shortly after the motion to dismiss was filed, we sought – and the Court granted – a stay of discovery pending the Court's consideration of the motion, saving Sapient significant discovery expenses pending a ruling on the motion to dismiss. In May 2007, the Court heard oral arguments on the motion and in October 2007 the Court granted the motion to dismiss with prejudice, terminating the case against Sapient. In re Sapient Corp. Deriv. Litig., No. 07-0629-BLS1 (Mass. Super. Ct. Oct. 29, 2007).