Feuer v. Merck & Co., Inc., 238 N.J. 27 (2019). As discussed here, the Appellate Division, in an opinion by Judge Ostrer that was reported at 455 N.J. Super. 69 (App. Div. 2019), affirmed (after de novo review of the legal issues involved) a ruling of the Chancery Division that had ruled against plaintiff, a Merck shareholder, in his demand to review various Merck documents. Plaintiff had invoked both N.J.S.A. 14A:5-28 and the common law. Today, in a 6-0 vote, the Supreme Court affirmed based on Judge Ostrer’s opinion.
In essence, the Appellate Division concluded that plaintiff’s requests for documents exceeded the permissible scope of N.J.S.A. 14A:5-28. That statute permits shareholders to review “books and records of account, minutes, and shareholder record.” The panel held that the documents that plaintiff sought to inspect were not “books and records of account.” Judge Ostrer observed that “[t]he phrase ‘books and records of account’ does not encompass any and all records, books, and documents of a corporation.” Because “Feuer’s document demands exceed the scope of inspection that the statute authorizes,” the statute did not afford him the right to inspect the documents he sought.
Plaintiff’s common law claim fared no better. Merck had argued that the statute abrogated the common law right to inspect, and the panel seemed poised to agree. Ultimately, however, Judge Ostrer decided that it was not necessary to address that issue. Plaintiff’s common law claim failed because the common law did not permit inspection in the circumstances of this case. Plaintiff had “largely demand[ed] documents he himself prompted the corporation to create.” The panel was “aware of no case, and Feuer has pointed to none, in which a shareholder effectively forced the creation of documents upon his or her allegation of mismanagement, and then obtained a right to inspect those very documents.”