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CALIFORNIA CORPORATE & SECURITIES LAW

Fictitious Name Use Fails To Engender Standing Or Jurisdictional Issue

California Code of Civil Procedure Section 367 requires that every action must be prosecuted in the name of the real party of interest.  What happens when a plaintiff sues under a fictitious business name of a dissolved foreign limited liability company?  Yesterday, the Court of Appeal answered that question in The Rossdale Group, LLC v. Walton, Cal. Ct. App. Case No. H043476 (June 15, 2017).

The Court of Appeal concluded that Section 367 does not establish a baseline standing requirement.  Indeed, the concept of standing is of much less significance to California courts because, unlike federal courts, they are not limited by the “case” or “controversy” requirement of Article III of the U.S. Constitution.  The Court of Appeal, in an opinion by Presiding Justice Conrad L. Rushing, also found that the plaintiff’s suspended status did not affect its standing.  In other words, incapacity does not equate to a want of standing. Finally, the Court found that Section 367 does not prevent a party from suing under a fictitious name.

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