It’s official: Directors at Oregon’s Umpqua Holding Corporation and their lawyers at Wachtell, Lipton, Rosen & Katz are the first to win dismissal of a federal shareholder derivative suit stemming from a negative “say on pay” vote by shareholders in the wake of the Dodd-Frank Act. Last Thursday Portland federal district court judge Michael Mosman affirmed a magistrate judge’s recommendation to dismiss the complaint in this four-page opinion.

Lawyers from Robbins Geller Rudman & Dowd and the Law Office of Robert McGaughey filed the suit in May for two union pension funds. In their 27-page complaint, the plaintiffs claim that Umpqua was the tenth U.S. company in 2011 to fail to receive majority support for its executive compensation under the Dodd-Frank’s “say-on-pay” rule, which gives shareholders a non-binding vote on executive pay at least once every three years. Umpqua’s 2010 executive compensation program increased pay for each executive officer by at least 60 percent, despite a decline in stock price and annual shareholder returns, according to the plaintiffs. In April 2011, shareholders rejected the 2010 executive compensation program by a 62 to 35 percent vote. Thirteen of Umpqua’s 20 largest shareholders voted against the pay package.

In his January recommendations, magistrate judge Acosta determined that the board was presumed to have acted in good faith in its compensation decisions under the business judgment rule and that the plaintiffs failed to meet the pre-suit demand requirement under heightened pleading standards for derivative suits. Judge Mosman upheld those findings last week, adding that “the fact that Umpqua may have lowered performance goals after repeated failures to accomplish its prior goals during an economic downturn is not sufficient to rebut the [business judgment] presumption in the individual defendants’ favor.”

We reached out Travis Downs III at Robbins Geller but didn’t immediately hear back. The plaintiffs have 30 days from Judge Mosman’s opinion to file an amended complaint.

Paul Rowe at Wachtell didn’t return a call seeking comment, but he did co-author this client memo on the case after Judge Acosta’s decision last month. Rowe and company called the case “a powerful reminder that directors of both financial and non-financial companies may base compensation on long-term goals and choose the yardsticks by which to measure executive performance with confidence that courts will respect their good faith business judgment.”