Cohen v. Beneficial Industrial Loan Corp.

Brief Fact Summary.

Plaintiffs sued Defendants in a derivative suit. Defendants requested security for costs.

Synopsis of Rule of Law.

A decision is final, for purposes of appeal under 28 U.S.C. § 1291, when it is an important claim of right and independent of the larger claim.

Facts.

Stockholders of Beneficial Industrial Loan Corporation (Plaintiffs) sued managers and directors of Beneficial Industrial Loan Corporation (Defendants) in a derivative suit for stealing money from the corporation. Defendants moved to require Plaintiffs to post security for costs.

Issue.

Is the trial court’s refusal to grant security for costs appealable under 28 U.S.C. § 1291?

Held.

Yes, the trial court’s refusal to grant security for costs is appealable under 28 U.S.C. § 1291.

Discussion.

The Court determined that the trial court’s refusal to grant security for costs was appealable under 28 U.S.C. § 1291 because the decision was final. The decision was final because it was an important issue involving a right and was independent of the larger claim of the derivative suit.