The New Jersey Supreme Court recently adopted an Appellate Division decision rejecting an expansion of the right of shareholders not bringing a derivative suit to inspect corporate documents beyond “books and records of account, minutes, and record of shareholders.”

The plaintiff in Feuer v. Merck & Co, owned 288 shares of Merck stock when Merck consummated the purchase of Cubist Pharmaceuticals Inc. for $9.6 billion, despite its knowledge that certain Cubist patents were subject to challenge and then later invalidated. Feuer’s counsel contacted the Merck board, questioning the deal since there was no discount to the acquisition price  for the loss of the patents. Counsel asked that Merck reconsider or renegotiate the deal and, failing that, commence litigation against those responsible. The board did appoint a “Working Group” to review the matter, which concluded that the board’s actions were a proper exercise of its business judgment and rejected Feuer’s demands. His lawyer then submitted numerous questions to Merck’s counsel about the Working Group and later wrote to the board demanding that the board sue the Working Group and its counsel for aiding and abetting the “underlying wrongdoing.” Subsequently, Feuer’s counsel demanded twelve categories of “Merck’s ‘Books and Records’” on the issue of the Working Group and the Cubist transaction, as well as the board’s consideration of his demands. The board refused his demand other than providing minutes of both the company and the Working Group which plaintiff received with confidentiality restrictions.