§ 3.04 PROCEDURAL CONSIDERATIONS
[1] Verifying the Complaint
CR 23.1 requires verification of derivative complaints brought on behalf of corporations and unincorporated associations. In other words, a shareholder plaintiff must either swear to the contents ofthe derivative claim under penalty ofperjury or sign and acknowledge the claim before a notary public. See Levy v. State, 91 Wn. App. 934, 943, 957 P.2d 1272 (1998); see also GR 13(a) (allowing use of unsworn verification subject to penalty of perjury in lieu of sworn affidavit). Washington statutes authorizing derivative claims include a similar requirement in certain circumstances. Compare RCW 23B.07.400(2) (requiring verification of derivative complaints filed on behalf of for-profit corporations), with RCW 25.15.396 (no statutory verification requirement for derivative complaints filed on behalf of limited liability companies).
The purpose of verification in derivative litigation is to avoid the threat of strike suits (i.e., actions in which a plaintiff makes allegations without regard to their truth in the hope of coercing settlement). Consistent with this purpose, the Washington Court of Appeals has determined that dismissal for failure to file a verified complaint is not required if the court determines that the action is not a strike suit, and the plaintiff subsequently submits a verification that cures the initial technical defect. RCL Nw., Inc. v. Colo. Res., Inc., 72 Wn. App. 265, 270-71, 864 P.2d 12 (1993).
[2] Notice to Shareholders
Washington law does not require a derivative plaintiff to provide notice to shareholders or to make a demand on the corporation's shareholders before filing suit. See RCW 23B.07.400 (no shareholder notice or demand requirement); see also WASHINGTON BUSINESS CORPORATION ACT SOURCEBOOK § 23B.07.400, at 2-3 (Wash. State Bar Assoc. 5th ed. 2016) ("SOURCEBOOK") (official legislative history to RCW 23B.07.400 stating that no prior notice to or demand on shareholders required). While a shareholder notice or demand requirement would appear to be consistent with the principle that derivative plaintiffs should exhaust all internal avenues of relief before commencing a lawsuit, it would conflict with a more important principle—that the board manages the corporation, not the shareholders. It would also increase the costs of derivative litigation and discourage legitimate cases. For these reasons, the legislature decided not to require notice or demand on the shareholders. SOURCEBOOK § 23B.07.400, at 3.
[3] Bond
A plaintiff may file a derivative action in Washington without posting a bond. See RCW 23B.07.400 (no bond requirement); see also SOURCEBOOK § 23B.07.400, at 3 (official legislative history to RCW 23B.07.400 stating no bond required). The legislature eliminated the requirement to post a bond in 1989, reasoning that the requirement discouraged derivative lawsuits by small shareholders and recognizing that there was no similar bond requirement for several other classes of cases, such as putative class actions, antitrust actions, and personal injury lawsuits. SOURCEBOOK § 23B.07.400, at 3.
[4] The Statute of Limitations
Claims asserted in a derivative action are subject to the same limitations periods as claims asserted directly by a corporation. If the statute of limitations would bar a direct action by the corporation, it also would bar a derivative action. Davis v. Harrison, 25 Wn.2d 1, 17, 167 P.2d 1015 (1946).
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