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CALIFORNIA CORPORATE & SECURITIES LAW

Homographic Cases Indeed!

Homographs are words that share the same spelling but have different meanings.  One such word that is very familiar to lawyers is the word “case”.  Lawyer’s try cases, shelve books in cases, and write in upper case and lower case letters.  How can one word share the same spelling and pronunciation and yet have such different…

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Applying The Statute Of Frauds To “Et Al.”

Charles II, aka the “Merry Monarch”, was sitting on the English throne when the original Statute of Frauds was enacted in 1677.  Therefore, one should be forgiven for the mistaken presumption that all questions involving the application of the statute have been raised and duly answered.  Just yesterday, in fact, the California Court of Appeal addressed the apparently…

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Magistrate Judge Rules SEC’s Attorney-Conduct Rules Preempt State Law

Last December, Chief Magistrate Judge Joseph C. Spero ruled that the SEC’s attorney-conduct rules preempt California’s statutory and professional rules requiring attorneys to maintain inviolate the confidences.  Wadler v. Bio-Rad Laboratories, Inc., 2016 U.S. Dist. LEXIS 176166  (N.D. Cal. Dec. 20, 2016).  This is a topic that I and other members of the Corporations Committee of…

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Ninth Circuit Accords Chevron Deference To The SEC, What Would Judge Gorsuch Say?

Last week, I noted that Judge Gorsuch has expressed a certain skepticism of Chevron deference.  The next day, the Ninth Circuit Court of Appeals held that the Securities and Exchange Commission’s interpretation of Section 19(d)(2) of the Securities Exchange Act is entitled to Chevron deference. Sharemaster v. United States SEC, 2017 U.S. App. LEXIS 1827 (9th…

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LLC Bound By Agreement Signed By Manager’s Manager

Justice Kenneth R. Yegan clearly and concisely frames the question in Western Surety Co. v. La Cumbre Office Partners, LLC, 2017 Cal. App. LEXIS 77 (2017): ” natural person is the managing member of a limited liability company (LLC 1) that is the sole manager of another limited liability company (LLC 2). The person signs an…

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U.S. District Court Finds Personal Jurisdiction In Derivative Suit

I think it is beyond peradventure that a state enjoys personal jurisdiction over corporations incorporated within that state.  What about the personal jurisdiction over the corporation’s directors and officers?  That was the question addressed by U.S. District Judge Jennifer A. Dorsey in Sonoro Invest, S.A. v. Miller, 2017 U.S. Dist. LEXIS 9657 (D. Nev. Jan. 24,…

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Court Of Appeal Voids Jury Trial Waiver Notwithstanding New York Choice of Law

A New York state of mind, but California dreaming A sophisticated lender and borrower negotiate a loan agreement in New York, the lender disburses the loan proceeds in New York, and both parties agree that New York law governs.  This choice-of-law is memorialized in bold face type and capital letters in the loan agreement.  In…

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Must A False Statement To A Franchisee Be Made “In this state”?

The list of instruments and interests included within the definition of a “security” in California Corporations Code Section 25019 is long.  A franchise, however, is not to be found amongst the named.  In fact, the statute specifically excludes a franchise subject to registration under the California Franchise Investment Law (Corporations Code Section 31000 et seq.) or exempt…

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Will Congress Deep Six The SEC’s Resource Extraction Rule?

In December of last year, I wrote about how the Securities and Exchange Commission’s Resource Extraction Rule might meet an untimely end.  See There’s Still Time For Congress To Void The SEC’s Resource Extraction Rule (Dec. 14, 2016).  The rule, Rule 13q-1 and an amendment to Form SD, had an extraordinarily difficult birth: Congress had ordered…

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Court Rules Plaintiff Is Not Required To Advance Defendant’s Legal Expenses

Imagine how frustrated you would be if you sued someone and the defendant responded by demanding that you advance his legal expenses in defending your lawsuit.  The plaintiff in Allergia, Inc. v. Bouboulis, 2017 U.S. Dist. LEXIS 7759 (S.D. Cal. Jan. 19, 2017) found itself in just that situation.  U.S. District Judge Janis L. Sammartino, however, spared the…

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