Choice of Law/Conflict of Law

Nevada Supreme Court Upholds Fraud Verdict Against The California Franchise Tax Board

The Franchise Tax Board’s Shande This is case that has been more than two decades in the making.  It began in the 1990s when inventor Gilbert Hyatt filed a California tax return showing that he relocated from California to Nevada.  Consequently, he reported licensing payments for only part of the year.  California was suspicious because his return reflected no moving Read more...


Judge Rules Choice Of Law Waives CSL Claim

I was quite surprised to read Judge Gregory M. Sleet’s ruling in OpenGate Capital Group LLC v. Thermo Fisher Scientific Inc., 2014 U.S. Dist. LEXIS 92256 (D. Del. July 8, 2014).  The lawsuit was brought by the purchaser of a business.  The purchase agreement included a choice of law clause specifying that the agreement would be “governed by and construed in accordance Read more...


Court Rules LLC Form Provided No Fiduciary Shield To Personal Jurisdiction

Last Friday’s post concerned whether a plaintiff could establish jurisdiction by tagging a corporate officer attending a conference in California.  The question was whether a corporation is present wherever its officers are present.  Today’s post considers the converse question.  Is a member of an LLC present where the LLC is present? In Poga Mgmt Ptnrs LLC v. Medfiler LLC, 2014 U.S. Read more...


Ninth Circuit Finds No Tag Jurisdiction Over Foreign Corporation

When a corporation sends an officer to a conference in California, is the corporation present in California?  A corporation can only act through its officers.  Thus, it might be said that the corporation is present wherever its officers happen to be, particularly if their presence is related to corporate business.  The question of where a corporation is present might seem better Read more...


Delaware Court Rules Nevada Law Governs But Applies Delaware Law

Although there are many significant differences between the corporate laws of Nevada and Delaware, the Nevada Supreme Court has often looked across the country to Delaware.  Thus, the Nevada high court has adopted Delaware’s test for demand futility articulated in Aronson v. Lewis, 473 A.2d 805 (Del. 1984) (overruled in part on other grounds by Brehm v. Eisner, 746 A.2d 244 (Del. 2000)).  Read more...


Internal Affairs Doctrine May Not Control Alter Ego Liability

The internal affairs doctrine “is a conflict of laws principle which recognizes that only one State should have the authority to regulate a corporation’s internal affairs — matters peculiar to the relationships among or between the corporation and its current officers, directors, and shareholders — because otherwise a corporation could be faced with conflicting demands.” Edgar v. MITE Corp., 457 Read more...


Delaware Embraces General Solicitation

Nevada Secretary of State Ross Miller has been a tireless promoter of Nevada’s private corporation law.  Over a year ago, he announced an on-line business entity search tool for iPhone, iPad and iPod Touch users.  See Business Entity Search Now Available On Your iPhone And iPad.  A few months later, Secretary Miller announced an innovative business-to-government (B2G) website, christened Silverflume.  See  Read more...


When The Parent Is A Blue Hen And The Subsidiary Is A 49er, What Law Governs?

With most publicly traded companies choosing to incorporate in Delaware, corporate officers are likely to assume that they have the benefit of Delaware law.  Assumptions sometimes can be wrong. FDIC v. Faigin, 2013 U.S. Dist. LEXIS 94899 (C.D. Cal. July 8, 2013) involved a suit by the Federal Deposit Insurance Corporation (which is identified as “Company” in the order) to recover over $100 Read more...


Alter Ego – “Easy To State But Difficult To Apply”

Yesterday, the California Court of Appeal found substantial evidence in the record to uphold a trial court’s decision to add an affiliated corporation as a judgment debtor under the “single enterprise” theory.  Toho-Towa Co., Ltd. v. Morgan Creek Productions, Cal. Ct. Appeal Case No. B242095, July 11, 2013.  Some of the factors cited were: The entities were owned by the Read more...


Responding To Professor Bainbridge’s Response

Last week, Professor Stephen Bainbridge posted this response to my post on post on exclusive forum selection bylaws in light of Chancellor Strine’s opinion in Boilermakers Local 154 Retirement Fund v. Chevron Corporation, 2013 Del. Ch. LEXIS 154 (June 25, 2013).  Professor Bainbridge, citing numerous cases, makes the point: Since many–if not most–of the suits that would be affected by forum selection bylaws Read more...