## Facts

- Chicago National League Ball Club (Inc.), a Delaware corporation, owned and operated the Chicago Cubs and Wrigley Field.
- Philip K. Wrigley was the corporation’s president, a director, and the controlling shareholder (about 80% of the stock).
- A minority shareholder brought a stockholders’ derivative action alleging negligence, mismanagement, and corporate waste based on the directors’ refusal to install lights at Wrigley Field and schedule night baseball games.
- The complaint alleged that night baseball was widely adopted in Major League Baseball and was used to increase attendance and revenues.
- The complaint attributed the Cubs’ operating losses (1961–1965) to inadequate attendance caused by the absence of night games.
- The complaint alleged Wrigley opposed lights because he viewed baseball as a daytime sport and believed night games would harm the surrounding neighborhood, rather than for corporate benefit.
- The plaintiff sought damages and injunctive relief requiring installation of lights and scheduling of night games.
- The trial court dismissed the amended complaint for failure to state a cause of action; the plaintiff appealed.

## Issues

1. Whether a derivative complaint states a claim for negligence, mismanagement, or waste challenging directors’ refusal to install lights and schedule night games when it does not allege fraud, illegality, or a conflict of interest.
2. Whether a court may override directors’ good-faith business policy decisions as “unwise” or less profitable.

## Decision

- The appellate court affirmed dismissal for failure to state a cause of action.
- The court held the challenged decision was a matter of director discretion protected by the business judgment rule.
- The court found no well-pleaded allegations of fraud, illegality, self-dealing, or conflict of interest that would justify judicial intervention.
- The court treated predictions that lights would increase profits as speculative and insufficient to show actionable negligence or waste.

## Legal Principles

- Courts will not substitute their judgment for that of corporate directors on ordinary business policy decisions made in good faith.
- A shareholder must plead fraud, illegality, or conflict of interest (or comparable facts showing improper motive) to overcome business judgment deference.
- Allegations that an alternative strategy could be more profitable, without more, do not state a claim for director liability.
- Consideration of neighborhood and long-term effects on property value or goodwill may be consistent with acting in the corporation’s interests, and does not itself show bad faith.
- Corporate “waste” is not established by a failure to make a particular investment when directors have plausible business reasons for inaction and there is no diversion of assets or giveaway to insiders.

## Conclusion

The court held that a derivative challenge to the Cubs’ refusal to install lights and schedule night games could not proceed absent allegations of fraud, illegality, or conflicted self-interest, and it declined to second-guess directors’ good-faith business decisions under the business judgment rule.


Shlensky v. Wrigley, 95 Ill. App. 2d 173, 237 N.E.2d 776 (Ill. App. Ct. 1st Dist. 1968)