The Minnesota Supreme Court ruled Wednesday that a three-year-old shareholder lawsuit can proceed against medical device maker Medtronic over allegations that investors were harmed by a $50 billion corporate “inversion” deal that moved the company’s corporate headquarters from Fridley to Ireland.

Plaintiffs’ attorneys say longtime Medtronic shareholders were forced to pay millions in capital gains taxes while the value of their shares was inappropriately diluted, as Medtronic lowered its corporate tax rate in January 2015 by acquiring Ireland-based Covidien and placing the combined entity under an Irish holding company called Medtronic PLC.

The lawsuit, which is seeking class-action status, is seeking financial damages, but plaintiffs’ attorneys have not ruled out other legal remedies involving the merger of Medtronic and Covidien.

A Medtronic spokesman noted that Wednesday’s ruling expressed no opinion on the underlying merits of the case, but it simply sends the case back to Hennepin County District Court for possible trial.

Previously, the lower court dismissed the case, ruling that shareholders lacked the ability to sue under Minnesota law. In January 2016, the Minnesota Court of Appeals revived the case, ruling that the shareholders had solid legal footing to proceed. On Wednesday, in an 18-page opinion written by Chief Justice Lorie Skjerven Gildea, the state’s high court agreed that a key portion of the lawsuit should proceed.

In many cases pitting shareholders against a corporation or its directors, Minnesota law gives corporate boards — not shareholders — the exclusive right to file litigation against a company or its directors to recover alleged damages. Giving boards the right to decide whether to file lawsuits for what are classified as “derivative” claims is supposed to minimize distracting shareholder lawsuits.

Vernon Vander Weide, a Minneapolis attorney representing plaintiff Kenneth Steiner, said the court rejected Medtronic’s argument that all cases arising from perceived unfair treatment in a merger should be derivative lawsuits.

In this case, plaintiffs argue that the shareholders were injured by dilution and capital gains taxes, while the company benefited from the greater financial freedom of moving overseas.

As part of the inversion, Medtronic shareholders had their old Medtronic Inc. shares wiped out and shares of the newly merged Medtronic issued, which the Internal Revenue Service treats as a taxable event under rules governing inversions.

The merger also created millions of new Medtronic shares issued to Covidien shareholders as part of the compensation for the deal, diluting the holdings and voting rights of existing Medtronic shareholders.

Regarding the alleged injury from capital gains, the Supreme Court wrote: “Medtronic itself did not incur a capital-gains tax liability on the transaction, and therefore could not recover for the injury caused by this alleged harm. Because any recovery would go only to the shareholders who incur a capital-gains tax liability, rather than to the corporation, the court of appeals correctly held that claims asserting this harm are direct,” which means Medtronic cannot have them dismissed on the grounds that they are “derivative” claims.

Regarding the stock dilution, the Supreme Court wrote, “Steiner alleged that Medtronic structured the inversion to secure and then protect the corporation’s expected tax benefit by taking from its shareholders a portion of their interest in the corporation, thus decreasing their ownership share in the new Medtronic. ... Rather than a simple loss of economic value, Steiner alleged an injury based on the loss of certain rightful incidents of his ownership interest, which is an injury that falls only on shareholders and not the corporation.”

Paul Vaaler, a professor with a joint appointment to the University of Minnesota law and business schools, said it would be a relatively straightforward matter for someone to compute the value of the millions in capital gains taxes that were paid by the shareholders.

But figuring out the value of a diluted voting right will be challenging.

“Does [the decision] create new liabilities that the company hadn’t counted on at the beginning of the transaction? I think the answer is yes,” Vaaler said. “But does it create rights for shareholders to more easily enjoin, or stop, a transaction? ... The answer to that is unclear, but it’s probably no.”

Vander Weide said in an e-mail, “We are pleased with the unanimous Supreme Court decision and are looking forward to resuming the litigation in the District Court.”

Medtronic spokesman Fernando Vivanco said via e-mail that the decision was only a procedural one. “While the court is sending some claims back to the district court for further proceedings, the court did not express any opinion on the merits,” Vivanco said. “Medtronic will now proceed to defend the remaining portion of the case, and believe the substantive claims are without merit.”