Follow-on derivative litigation

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As we have noted on this site in recent years, privacy-related issues have been and remain a significant potential source of D&O risk and liability exposure. In the latest example of the ways that privacy-related concerns can translate into D&O claims, a plaintiff shareholder has filed a shareholder derivative lawsuit against the board and controlling shareholders of company Alphabet alleging that the defendants violated their fiduciary duties by failing to take steps to protect the company from over $4.5 billion in fines, penalties, and settlements arising from alleged privacy violations. A copy of the redacted public version of the September 22, 2026, complaint can be found here.

Continue Reading Alphabet Board Hit with Privacy-Related Follow-On Derivative Lawsuit

Over the last several months, the boards of a number of tech companies have been hit with “follow on” shareholder derivative lawsuits, after the companies were first sued in underlying intellectual property suits. The derivative lawsuits allege that the companies’ boards knowingly allowed their companies to use copyrighted materials to train their AI models, resulting in the underlying IP liability litigation, as well as potential IP-related liability. In the following guest post, Nathaniel French and Mason Dressler take a detailed look at the latest of these lawsuits, filed against Apple’s board. Nate is a partner and Mason is an associate at the Kennedys law firm. Our thanks to Nate and Mason for allowing us to publish their article on this site.

Continue Reading Guest Post: Apple Intelligence: Ongoing Risks Associated with AI Development

One of the much-discussed concerns in the insurance industry about artificial intelligence (AI) is the risk of “silent AI” – that is, the seepage of AI-related matters into various insurance coverages that were not intended (at least not consciously) to provide coverage for these kinds of exposures. A new shareholder derivative lawsuit filed against the board of Microsoft provides an illustration of these kinds of concerns in operation. The new derivative suit is a follow-on to prior underlying litigation in which copyright holders allege Microsoft used the holders’ copyright materials to develop its AI products. The new derivative lawsuit alleges that Microsoft’s directors violated their duties to the company by knowingly allowing copyright infringement, causing harm to the company.

The new lawsuit, discussed below, shows how a matter that would not typically be covered under a D&O policy (copyright infringement) can translate into a potentially covered matter (a breach of fiduciary duty lawsuit), and it also shows how AI-related exposures can seep into D&O insurance coverage, as well. A copy of the June 30, 2026, lawsuit filed against certain of Microsoft’s directors and officers can be found here.

Continue Reading New Microsoft Derivative Lawsuit: “Silent AI” and D&O Exposure

In recent months, securities class action litigation patterns involving AI-related disclosures have emerged and developed, as has been documented on this site (most recently, for example, here). There has of course been a great deal of other kinds of AI-related litigation, including lawsuits involving intellectual property issues, privacy and data-collection concerns, discrimination and bias claims, and a variety of different kinds of tort allegations.

In a shareholder derivative lawsuit recently filed against the board of software firm Adobe, these two lines of AI-related litigation crossed; the plaintiff shareholder alleges that the defendants violated their board duties by knowingly permitting the company to train its artificial intelligence tools using material copyrighted by others and in a way that subjected the company to IP-related litigation. As discussed below, the new lawsuit illustrates how the broader range of AI-related litigation can translate into follow-on D&O claims, representing yet another area of AI-related D&O risk.

Continue Reading AI-Related IP Litigation Triggers Follow-On D&O Lawsuit

In my annual roundup of the issues to watch in the world of D&O that I posted early in the fall, I included in my list of topics the possibility of an increase in antitrust-related enforcement activity. I raised this concern in part because of fears arising from the emerging make-up of the Biden Administration’s antitrust regulatory team. For some readers, it may not have been apparent how these antitrust regulatory concerns might translate into D&O claims activity. Anyone looking for an example of how antitrust enforcement activity can lead to D&O claims will want to review the two shareholder derivative actions filed late last week against certain directors and officers of Alphabet, the parent of Google, as well as against directors and officers of Google itself. The complaints assert breach of fiduciary duty claims against the defendants relating to antitrust enforcement actions that have been filed against Alphabet and against Google by federal and state regulators.
Continue Reading Alphabet’s Board Hit with Antitrust Enforcement Follow-On D&O Lawsuits