Tractor Supply Wins Dismissal with Prejudice of All Claims

King & Spalding notched a total win for client Tractor Supply Company (TSCO), a publicly traded agricultural retail chain.  A shareholder instituted the shareholder derivative lawsuit on October 9, 2020 against TSCO, its current and two former members of the Board, alleging that TSCO misrepresented and omitted material facts in the company’s proxy’s statements with respect to TSCO’s efforts at diversity and inclusion within the Board.  Plaintiff asserted claims under SEC Rule 14a-9, breach of fiduciary duty, and unjust enrichment.  This lawsuit is one of 15 other cases filed nationwide against public corporations—including Facebook, GAP, Oracle, Monster Beverage, and Cisco Systems—based on the alleged lack of Board diversity. 

On March 24, 2022, the Court, per Judge Eli J. Richardson, dismissed Plaintiff’s complaint with prejudice, holding that Plaintiff did not meet the high standard to plead demand futility because the complaint did not adequately allege a substantial likelihood of liability to show disabling director interest. This judgment is the first of its kind to be dismissed with prejudice.