June 28, 2022

Volume XII, Number 179

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June 27, 2022

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Professor Bainbridge Will Need To Wait A Bit Longer For The Answer To This Question

In October 2020, Professor Stephen Bainbridge posed this question of whether shareholder inspection rights are subject to the internal affairs doctrine.  His post followed Vice Chancellor J. Travis Laster's ruling in Juul Labs, Inc. v. Grove, 2020 Del. Ch. LEXIS 264 that stockholder inspection rights are "a core matter of internal corporate affairs".   Professor Bainbridge had long taught that inspection rights were an exception.  I pointed out that at least one California court agreed.  See Professor Bainbridge Asks "Are shareholder inspection rights subject to the internal affairs doctrine?"

The issue was raised again in California, but the Court of Appeal declined to take a position:

Once again, we will not decide this issue because the question whether shareholder inspection rights are governed by the internal affairs doctrine is not properly before us.  Grove litigated his inspection rights in Delaware, received an unfavorable ruling, and elected not to appeal.  The present appeal is not from the Delaware judgment, but from a stay order that gives full faith and credit and collateral estoppel effect to the Delaware judgment.

Grove v. Juul Labs, 2022 Cal. App. LEXIS 353.  For more on this recent case, see Court Finds California Labor Statute To Be No Bar To Charter Forum Selection Clause.

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume XII, Number 123
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
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Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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