California Appellate Court Decides California Law Applies “For Now” to Shareholder Derivative Suit Against Directors of a Nevada Corporation

Kruss v. Booth is a "must read" for lawyers confronting Section 2115 of the California Corporations Code. Section 2115 represents the California legislature's attempt to thumb its nose at the internal affairs doctrine. That doctrine holds that the internal affairs of a corporation should be governed by the law of the state of incorporation. Section 2115 provides that specified provisions of California's General Corporation Law apply to foreign corporations when their most substantial business and shareholder contacts are with California. In an article that appeared in the Los Angeles Daily Journal on Friday, June 18, 2010, I discuss what the court decided and what I think it missed.