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Supreme Court of the United States - 83 U.S. 36
Tags: Constitutional Law
tl;dr:
Privileges/immunities clause of the Constitution simply informs state governments they must apply their laws equally to all US citizens who come within their jurisdiction.Video Summary
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The case involves a shareholder, Dora Surowitz, who filed a lawsuit against Hilton Hotels Corporation's officers and directors, alleging that they defrauded the company of millions of dollars through illegal schemes. The defendants moved to dismiss the complaint, alleging that it was a sham and that Mrs. Surowitz was not a proper party plaintiff. The District Court dismissed the case with prejudice, holding that Mrs. Surowitz's affidavit was false and therefore a nullity. The Court of Appeals affirmed the dismissal. However, the Supreme Court reversed the judgments, stating that the Rule cannot justify dismissal of the case on the record shown, even if it is meant to protect corporate management against "nuisance" or "strike suits." The lower court erred in dismissing the case with prejudice based on a false affidavit.
Rule 23 (b) in a derivative suit requires a verified complaint, but it does not specify that the plaintiff shareholder must provide the verification. The affidavit of the plaintiff's counsel can be considered a valid verification, as per a reasonable interpretation of the Rule. The Court has made a decision based on this premise, which is agreed upon. However, the lower court may have erred in not accepting the counsel's affidavit as a valid verification.
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