/>iWhen a shareholder sues derivatively, the shareholder is seeking relief not for itself, but for the corporation. Therefore, it should be expected that the shareholder is not free to compromise or dismiss the suit absent court oversight. This point was made this summer by the the Nevada Supreme Court in Soon v. Henderson, 554 P.3d 208 (Nev. 2024):
Under NRCP 41(a)(2), a court may dismiss a case at the plaintiff's request. Under NRCP 23.1, a derivative action “may not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise must be given to shareholders or members in such manner as the court directs.” A failure to provide shareholder notice when dismissing a case violates a party's procedural due process right. Shoen v. SAC Holding Corp., 122 Nev. 621, 644 n.71, 137 P.3d 1171, 1186 n.71 (2006), abrogated on other grounds by Guzman v. Johnson, 137 Nev. 126, 483 P.3d 531 (2021).
Accordingly, the Court held that the trial court did not abuse its discretion in denying the plaintiff's motion for voluntary dismissal because Plaintiff did not provide notice to shareholders.
The Soon decision is an unpublished decision of the Nevada Supreme Court. As such, it does not establish mandatory precedent except in a subsequent stage of a case in which the unpublished disposition was entered, in a related case, or in any case for purposes of issue or claim preclusion or to establish law of the case. Rule 36(c)(2), Nev. Rules of Appellate Proc.
