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Policyholder diversity suit against Qualcomm dismissed


A federal district court in Delaware has dismissed derivative litigation filed by shareholders against Qualcomm Inc. directors that charged them with unlawful and discriminatory practices, citing the absence of black directors.

Plaintiffs in Monday’s ruling by the U.S. District Court in Wilmington charged the San Diego-based technology company with breach of fiduciary duty and abuse of control, among other charges, according to Becky Kiger, derivatively on behalf of Qualcomm Inc. v. Steve Mollenkopf et. al. and Qualcomm Inc. Mr. Mollenkopf is the company’s CEO and a director, while the remaining defendants are current or former directors.

The ruling has been reported by The D&O diary.

The ruling was one of a number of lawsuits on diversity that were filed against companies last year.

In dismissing the case, the ruling said, “Unlike the typical derivative action, there was no specific event involving the company or Defendants that gained public notoriety and precipitated the filing of these complaints.”

Plaintiffs alleged the company’s 2019 proxy statement was “materially false and misleading” when it said its governance committee’s goal was to assemble a board of directors that brings “diversity of perspective and skills,” the ruling said. 

“Statements about a board’s or a company’s goals are unactionable puffery, as multiple courts have held,” the ruling said.

Among other arguments, plaintiffs also said the inclusion statement was false and misleading because the company had no African Americans on its board, and no African American or other minority candidate had been elected to the board in the last six years.

This “does not necessarily mean that the Governance Committee did not include or instruct its search firms to include ‘racially/ethnically diverse candidates’ in its pool of candidates. It could simply mean that those candidates did not advance past the larger candidate pool,” the ruling said, in dismissing the complaint

A company attorney said it does not comment on pending litigation, given that the plaintiffs have been granted leave to amend part of their complaint, while plaintiff attorneys did not respond to a request for comment.







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