In 2009, Washington’s Supreme Court announced in In re F5 Networks that Washington follows Delaware with respect to its standard for pleading demand futility in derivative actions. A previous blog discussed that here. In 2021, Delaware’s Supreme Court announced an updated test for demand futility. This posed a question to Washington practitioners as to whether Washington courts would follow suit and adopt the updated test. Now, we have an answer from the recent Washington case, Trimm v. Kelly.
Demand Futility – the Original Test
Derivative actions allow shareholders or LLC members to assert litigation on behalf of the entity. This raises significant corporate governance concerns. For corporations, directors and officers control litigation, and for LLC’s, managers and a majority of members (ordinarily) control litigation. As such, derivative actions completely flip control of litigation. To address this concern, courts require derivative plaintiffs to explain why they either (1) demanded the corporation sue and the corporation wrongfully refused or (2) never made demand because demand would be futile. This must be plead in a complaint with particularity. CR 23.1.
Ordinarily, derivative plaintiffs plead demand futility. This requires the plaintiff to allege facts that create a reasonable doubt that (1) the corporation’s directors or LLC’s managers have an interest in the transaction that is the subject of the derivative litigation OR (2) a majority of the corporation’s directors or LLC’s managers are dominated or controlled by a person interested in the transaction. Delaware courts established this requirement in Aronson v. Lewis, 473 A.2d 805 (Del.1984) and Washington adopted this in In re F5 Networks. Recently, Delaware updated this test in United Food & Commer. Workers Union v. Zuckerberg, 262 A.3d 1034 (Del. 2021).
Delaware’s Test Under United Food
In United Food, the Delaware Supreme Court addressed a specific test for demand futility recommended by the Court of Chancery (Delaware’s trial court for business disputes) that posed three questions:
(i) whether the director received a material personal benefit from the alleged misconduct that is the subject of the litigation demand;
(ii) whether the director faces a substantial likelihood of liability on any of the claims that would be the subject of the litigation demand; and
(iii) whether the director lacks independence from someone who received a material personal benefit from the alleged misconduct that would be the subject of the litigation demand or who would face a substantial likelihood of liability on any of the claims that are the subject of the litigation demand.
Accordingly, the Court of Chancery recommended that “[i]f the answer to any of the questions is ‘yes’ for at least half of the members of the demand board, then demand is excused as futile.” United Food, 262 A.3d at 1059. Ultimately, the Delaware Supreme Court found this test to be consistent with its past authority, including Aronson, and it adopted this test as a way to establish demand futility in derivative actions.
United Food’s Demand Futility Test to Washington
While the Delaware Supreme Court issued the United Foods opinion in 2021, Washington courts had not addressed whether this new test also applied in Washington. That recently changed with the case, No. 86734-2-I, 2025 Wash. App. LEXIS 2666 (Ct. App. Dec. 29, 2025) (unpublished). In Trimm, the Court of Appeals affirmatively applied the United Foods test to a derivative complaint filed against Starbucks. Accordingly, practitioners should be prepared to analyze the relevant prongs under United Foods for Washington derivative actions.
Closing Considerations
A separate blog will discuss the facts and analysis of Trimm v. Kelly, but one important note is that the opinion is not published. It is difficult to know whether this will create any problems for Trimm’s new test and its applicability going forward. Nevertheless, practitioners should be aware of the new test under Trimm when litigating derivative actions and consider addressing both In re F5 Networks and Trimm out of an abundance of caution.
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