In Halebian v. Berv, No. 12-3360-cv (2d Cir. Nov. 12, 2013), the Second Circuit revisited the issue of whether plaintiffs in derivative actions were entitled to discovery after a special committee moved to terminate the litigation.  In that case, governed by Massachusetts law, the plaintiff alleged that the defendants breached their fiduciary duties when considering and recommending a new investment advisory agreement to shareholders after the sale of an affiliated investment advisor.  The Second Circuit found that where a trustee’s independence is not at issue, Massachusetts law presumes the decision to reject a demand is protected by the business judgment rule unless plaintiff makes a showing of bad faith or lack of investigation.  Plaintiff in Halebian conceded that he could not overcome the presumption without discovery, but asserted that the district court improperly denied him the necessary discovery.  The Second Circuit held that, having received the special committee report and over one thousand pages of exhibits and trustee questionnaires, plaintiff "possessed sufficient discovery on the issues of independence, good faith, and reasonableness to draft discovery requests tailored to the issues in this case, or to set forth 'specified reasons' as to why he could not 'present [particularized] facts essential to justify [his] opposition.’”  The court thus held that the district court did not abuse its discretion in determining that further discovery was not proper.