Supreme Court of California

California law, like Delaware law, generally requires a plaintiff in a shareholder's derivative suit to maintain continuous stock ownership throughout the pendency of the litigation. Under this rule, a derivative plaintiff who ceases to be a stockholder by reason of a merger ordinarily loses standing to continue the litigation. However, equitable considerations may warrant an exception to the continuous ownership requirement if the merger itself is used to wrongfully deprive the plaintiff of standing, or if the merger is merely a reorganization that does not affect the plaintiff's ownership interest.

Appellate Information

• Decided 02/14/2008
• Published 02/14/2008

Judges

• BAXTER, J.

Court

• Supreme Court of California

Counsel

• For Appellant:
  
• Kreindler & Kreindler, Gretchen M. Nelson, Los Angeles;  Federman & Sherwood, William B. Federman, Stuart W. Emmons;  Law Offices of George A. Shohet and George A. Shohet for Intervener and Appellant., Steven G. Ingram for Consumer Attorneys of California as Amicus Curiae on behalf of Intervener and Appellant., Richard M. Buxbaum as Amicus Curiae on behalf of Intervener and Appellant.


• For Appellees:
  
• Gray Cary Ware & Freidenrich, DLA Piper RudnickGray Cary US, DLA Piper US, Robert W. Brownlie, Paul A. Reynolds, San Diego, Kathryn E. Karcher and Stanley J. Panikowski for Defendants and Respondents., National Chamber Litigation Center, Robin S. Conrad, Amar D. Sarwal;  Morrison & Foerster, Beth S. Brinkman, Seth M. Galanter, Jordan Eth, Judson E. Lobdell and Christopher A. Patz, San Francisco, for Chamber of Commerce of the United States of America as Amicus Curiae on behalf of Defendants and Respondents.