Also known as: diligent inquiries · reasonable inquiry
Written by attorneys · grounded in primary & secondary sources — see below
A standard of investigation that requires a careful and good-faith effort to uncover relevant facts before taking legal action or making a certification. The inquiry must be sufficient to support conclusions about the existence or nonexistence of facts that affect rights or obligations.
Minority shareholder Destiny Davis filed a derivative suit against Dixon Foods alleging that the CEO diverted a contract to a family-owned supplier. The board appointed a special committee that interviewed witnesses, reviewed financial records, and examined the supplier relationship before concluding that continued litigation would harm the company. The court granted the motion to dismiss because the committee's process met the required standard.
Attorney Derek Douglas represented Delta Dynamics in a contract dispute and signed responses to requests for production. Before signing, Douglas reviewed client emails, interviewed the project manager, and confirmed that no responsive documents existed in the offsite archive. The certification rested on that investigation.
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Defendant Dolores Diaz received a request to admit that her company had received written warnings about equipment defects. After checking project files and speaking with the site supervisor, Diaz answered that she could not admit or deny because the records were incomplete. The answer identified the inquiry performed.
Plaintiff Daphne Doyle sought to serve a nonresident defendant in a quiet title action. After checking public records, contacting known associates, and hiring an investigator who searched multiple states, Doyle filed an affidavit stating that diligent inquiry had failed to locate the defendant. The court authorized publication based on that showing.
Owner Diana Delgado held ten mineral interests in one county and failed to file a timely statement of claim. After publication of notice, Delgado filed within the statutory window because she had made repeated searches of county records and contacted prior operators in an effort to preserve the interests. The court held the interests did not lapse.
The board of Drake Logistics considered a merger proposal. CEO Dylan Duffy presented an oral summary of the terms without having reviewed the draft agreement, and the board approved the deal the same day. The court later found that the directors had not performed the inquiry needed to rely on the business judgment rule.
The corporation must show that a qualified decision maker determined in good faith, after conducting a reasonable inquiry, that maintaining the suit is not in the corporation's best interests. The inquiry must be adequate to support the conclusions reached.
Yes. An attorney must conduct a reasonable inquiry into the facts before certifying that a response is complete and correct. Relying solely on a client's unverified statement when records exist fails the standard.
A party may do so only after stating that a reasonable inquiry has been made and that the information known or readily obtainable is insufficient to admit or deny the matter.
The agent must review readily available public information that a person of ordinary experience using due care would examine. Failure to check widely reported news about a vendor's performance breaches that duty.
…of the proceeding under the statute of California, on account of the entire absence of an affidavit of non-residence, and of diligent inquiry for the residence of the debtor; 2d, the absence of any order for publication in Eaton's case, — both of which are conditions precedent to the jurisdiction of the court to take any action…