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Guidant (D) is an Indiana company that develops, manufactures, and distributes cardiovascular medical products. Endovascular Technologies Inc. is a wholly owned subsidiary of D. Endovascular designed the Ancure Endograft System to treat abdominal aortic aneurysms and received FDA approval for commercial sale in the United States in 1999. After an investigation into defects in the device, the incomplete handling and reporting of complaints, inadequate corrective actions, and FDA violations, D pled guilty to one felony count of making false statements to a federal agency and nine felony counts of shipping misbranded medical devices in interstate commerce. Guidant paid a $43.4 million criminal fine and a $49 million civil settlement. Six shareholder derivative actions were filed on behalf of D in response to these events. Alaska Electrical (Ps) filed the consolidated complaint alleging breach of fiduciary duty, abuse of control, gross mismanagement, and waste of corporate assets against D's entire board of directors (Ds). Ds moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, asserting that the plaintiffs had not made a demand on Ds. Ps countered that the complaint showed a demand would have been useless, excusing failure to do so. The court certified a question.

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