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No Right to Jury Trial in Michigan Shareholder Oppression Actions

In Madugula v. Taub, 2014 Mich. LEXIS 1281 (Mich. July 15, 2014), the Michigan Supreme Court held that parties do not have a right to a jury trial in actions for shareholder oppression; rather, such claims must be heard by a court sitting in equity. The court reached its decision by determining that neither the shareholder oppression statute, MCL 450.1489, nor the Michigan Constitution provides for the right. Indeed, the statute itself does not explicitly mention jury trials, but instead permits a court to “make an order or grant of relief as it considers appropriate.” Although such relief may come in the form of money damages—a remedy normally awarded by a jury—the broad discretion of the circuit court to fashion any relief reflects the equitable nature of the claim: claims of which are normally decided by a judge. Like the statute, the Michigan Constitution also precludes the right to a jury trial in shareholder oppression actions. While Article 1, 14 states that “[t]he right of trial by jury shall remain,” the provision only extends to claims that are similar to claims that were traditionally tried before a jury at the time the 1963 Constitution was adopted. A shareholder oppression action, according to the court, is comparable to a shareholder derivative claim and a corporate dissolution claim, both of which are equitable in nature and decided by judges. Thus, without a statutory or constitutional basis granting the right, the court concluded that the right to a jury trial does not exist in shareholder oppression actions and that such claims must be heard by a court sitting in equity.

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