What is the effect of Mills v. Mills proxy solicitation on a plaintiff's claim for damages?

Appellant argues that the district court erred in holding in its first memorandum opinion that her complaint failed "to satisfy the transaction causation requirement of Mills . . . ." ² Appellees, in contrast, urge that we affirm the dismissal on this ground, asserting that "where the transaction authorized by the allegedly false or misleading proxy materials is the election of directors, previous improper corporate payments (as breaches of fiduciary duty) are not approved by shareholders voting for directors, and thus are not caused by the proxy statements." This argument, however, misconstrues plaintiff's claim. In the cases relied on by appellees, ³ the plaintiff sought damages because of allegedly improper payments, which did not require shareholder approval. The causal link between the proxy solicitation for the election of directors and the injury complained of the improper payments was attenuated at best. In the instant case, however, the challenged "transaction" is the election of the directors, and we have no doubt that the "proxy solicitation itself . . . was an essential link in the accomplishment" of that transaction, within the meaning of Mills. See also Berkman v. Rust Craft Greeting Cards, Inc., 454 F.Supp. 787, 793 (S.D.N.Y.1978).