Code of the District of Columbia

Subchapter VIII. Actions by Members.


§ 29–808.01. Direct action by member.

(a) Subject to subsection (b) of this section, a member may maintain a direct action in the Superior Court against another member, a manager, or the limited liability company to enforce the member’s rights and otherwise protect the member’s interests, including rights and interests under the operating agreement or this chapter or arising independently of the membership relationship.

(b) A member maintaining a direct action under this section shall plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited liability company.


(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)

Section References

This section is referenced in § 29-804.09 and § 29-806.01.

Editor's Notes

Uniform Law: This section is based on § 901 of the Uniform Limited Company Act (2006 Act).


§ 29–808.02. Derivative action.

A member may maintain a derivative action in the Superior Court to enforce a right of a limited liability company if:

(1) The member first makes a demand on the other members in a member-managed limited liability company, or the managers of a manager-managed limited liability company, requesting that they cause the company to bring an action to enforce the right, and the managers or other members do not bring the action within a reasonable time; or

(2) A demand under paragraph (1) of this section would be futile.


(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)

Section References

This section is referenced in § 29-808.04 and § 29-808.06.

Editor's Notes

Uniform Law: This section is based on § 902 of the Uniform Limited Company Act (2006 Act).


§ 29–808.03. Proper plaintiff.

A derivative action to enforce a right of a limited liability company may be maintained only by a person that is a member at the time the action is commenced and:

(1) Was a member when the conduct giving rise to the action occurred; or

(2) Whose status as a member was derived, by operation of law or pursuant to the terms of the operating agreement, from a person that was a member at the time the conduct giving rise to the action occurred.


(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(h)(9)(A), 59 DCR 13171.)

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 rewrote the section.

Editor's Notes

Uniform Law: This section is based on § 903 of the Uniform Limited Company Act (2006 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.


§ 29–808.04. Pleading.

In a derivative action under § 29-808.02, the complaint shall state with particularity:

(1) The date and content of plaintiff’s demand and the response to the demand by the managers or other members; or

(2) If a demand has not been made, the reasons a demand under § 29-808.02(1) would be futile.


(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)

Editor's Notes

Uniform Law: This section is based on § 904 of the Uniform Limited Company Act (2006 Act).


§ 29–808.05. Special litigation committee.

(a) If a limited liability company is named as or made a party in a derivative proceeding, the company may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the company. If the company appoints a special litigation committee, on motion by the committee made in the name of the company, except for good cause shown, the Superior Court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation. This subsection shall not prevent the court from enforcing a person’s right to information under § 29-804.10 or, for good cause shown, granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.

(b) A special litigation committee may be composed of one or more disinterested and independent individuals, who may be members.

(c) A special litigation committee may be appointed:

(1) In a member-managed limited liability company:

(A) By the consent of a majority of the members not named as defendants or plaintiffs in the proceeding; and

(B) If all members are named as defendants or plaintiffs in the proceeding, by a majority of the members named as defendants; or

(2) In a manager-managed limited liability company:

(A) By a majority of the managers not named as defendants or plaintiffs in the proceeding; and

(B) If all managers are named as defendants or plaintiffs in the proceeding, by a majority of the managers named as defendants.

(d) After appropriate investigation, a special litigation committee may determine that it is in the best interests of the limited liability company that the proceeding:

(1) Continue under the control of the plaintiff;

(2) Continue under the control of the committee;

(3) Be settled on terms approved by the committee; or

(4) Be dismissed.

(e) After making a determination under subsection (d) of this section, a special litigation committee shall file with the Superior Court a statement of its determination and its report supporting its determination and shall serve each party with a copy of the determination and report. The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made its recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court shall enforce the determination of the committee. Otherwise, the court shall dissolve the stay of discovery entered under subsection (a) of this section and allow the action to proceed under the direction of the plaintiff.


(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(h)(9)(B), 59 DCR 13171.)

Section References

This section is referenced in § 29-801.07.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “and shall serve each party with a copy of the determination and report” for “giving notice to the plaintiff” in (e).

Editor's Notes

Uniform Law: This section is based on § 905 of the Uniform Limited Company Act (2006 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.


§ 29–808.06. Proceeds and expenses.

(a) Except as otherwise provided in subsection (b) of this section:

(1) Any proceeds or other benefits of a derivative action under § 29-808.02, whether by judgment, compromise, or settlement, belong to the limited liability company and not to the plaintiff; and

(2) If the plaintiff receives any proceeds, the plaintiff shall remit them immediately to the company.

(b) If a derivative action under § 29-808.02 is successful in whole or in part, the Superior Court may award the plaintiff reasonable expenses, including reasonable attorney’s fees and costs, from the recovery of the limited liability company.

(c) A derivative action on behalf of a limited partnership may not be voluntarily dismissed or settled without the Superior Court’s approval.


(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(h)(9)(C), 59 DCR 13171.)

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 added (c).

Editor's Notes

Uniform Law: This section is based on § 906 of the Uniform Limited Company Act (2006 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.