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California Supreme Court Follows Delaware Law

By Francis G. X. Pileggi, Esq.

Grosset v. Wenaas is the name of a very recent California Supreme Court decision that followed Delaware law. Read the opinion here. This West Coast jurisprudence comes to us courtesy of  Justin Myer Lichterman, a lawyer in the San Francisco office of the Orrick firm who was kind enough to forward the case to me with the following introductory summary:

 Though the real issue in the case was whether CA requires continuous ownership, as well as contemporaneous, the Court brought CA into line with Delaware on the contemporaneous and continuous ownership requirements for standing in derivative actions. The Court punted on the potential 2115 and internal affairs issues that it could have addressed in deciding the case.

Money quote: "Not only does a requirement for continuous ownership further the statutory purpose to minimize abuse of the derivative suit, but the basic legal principles pertaining to corporations and shareholder litigation all but compel it." (pg. 16 )

Full post as published by Delaware Corporate and Commercial Litigation Blog on February 17, 2008 (boomark / email).