Shlensky v. Wrigley

Brief Fact Summary. Plaintiff, William Shlensky, filed a derivative action against Defendant director, Phillip Wrigley, to force the installation of lights for night baseball.

Synopsis of Rule of Law. A court will not interfere with an honest business judgment absent a showing of fraud, illegality or conflict of interest.

Facts. Defendant is the director of the Chicago National League Ball Club, which is the company that owns the Chicago Cubs. Although every other major league team had installed lights, Defendant did not install them for the Cubs because he was concerned that night baseball would be detrimental to the surrounding neighborhood. Plaintiff argued that the team was losing money, and that the other Chicago team, the White Sox, had higher attendance during the weekdays because they played at night. Therefore, reasoned Plaintiff, the Cubs would draw more people with weekday night games. Plaintiff asserts that Defendant’s first concern should be with the shareholders rather than the neighborhood.

Issue. The issue is whether the court should overrule decisions made by Defendant absent a showing of fraud, illegality or a conflict of interest.

Held. The court will not overturn Defendant’s decision to not install lights at the ballpark. The court cited some reasons why the light installation could be detrimental, such as lowering the property value of the park itself, a lack of proof on behalf of Plaintiff that financing would be available for lights and would be certain to be offset by increasing revenues. The court cites precedent that asserts that business decisions should not be disturbed just because a defendant can make a reasonable case that the policy chosen by the company may not be the wisest policy available.

Discussion. The court notes that they were not necessarily agreeing with Wrigley’s position in refusing to install lights, but that there was some reasons for doing so. The court stated that there was no requirement to show all three factors of illegality, fraud or a conflict of interest, but there was not evidence of any of the above in this case.