Title: Greb v. Diamond Int'l Corp.
Citation: N/A
Docket Number: S183365
State: California
Issuer: California Supreme Court
Date: February 21, 2013

1 
Filed 2/21/13 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
WALTER GREB et al., 
) 
 
 
) 
S183365 
 
Plaintiffs and Appellants, 
) 
 
 
) 
 
 
v. 
) 
Ct.App. 1/1 A125472 
 
 
) 
 
DIAMOND INTERNATIONAL  
) 
CORPORATION, 
) 
San Francisco City  
 
) 
and County  
 
Defendant and Respondent.  
) 
Super. Ct. No. CGC-08-274989 
 ___________________________________ ) 
 
 
We granted review to resolve a conflict in the Courts of Appeal concerning 
interpretation of Corporations Code section 2010,1 which governs the winding-up and 
survival of dissolved corporations.  We consider whether the statute applies to foreign 
corporations — those formed in states other than California — and conclude, consistently 
with the appellate court below, that it does not.   
I.  Facts and procedure 
 
In December 2008, plaintiffs Walter Greb (now deceased) and his wife Karen 
Greb filed a complaint for personal injuries and loss of consortium against defendant 
Diamond International Corporation (defendant) and several other entities.  Plaintiffs‟ 
complaint alleged injuries from exposure to asbestos.  Although defendant has been 
dissolved for many years, plaintiffs sought recovery from unexhausted liability insurance 
that covered defendant during the decades when it did business in California.  (See 
                                              
1  
All further statutory references are to this code unless otherwise noted.   
 
2 
§ 2011, subd. (a)(1)(A) [permitting recovery against dissolved corporations from 
“undistributed assets, including . . . any insurance assets”].)   
Defendant demurred to plaintiffs‟ complaint, alleging that more than three years 
earlier, in July 2005, it had obtained a corporate dissolution pursuant to the laws of 
Delaware, defendant‟s state of incorporation.  Accordingly, defendant argued, pursuant to 
Delaware‟s three-year survival statute,2 when plaintiffs filed their complaint in December 
2008, defendant lacked the capacity to be sued.  Plaintiffs opposed the motion, arguing 
their action was permitted under California‟s own survival statute, section 2010, which 
they asserted takes precedence over Delaware law in this setting.   
The trial court ruled that California‟s survival statute did not apply to foreign 
corporations, and hence that Delaware‟s corresponding statute applied to defendant.  
Accordingly, the trial court sustained the demurrer without leave to amend, and dismissed 
plaintiffs‟ complaint with prejudice.  On review, the Court of Appeal affirmed.  It 
followed the interpretation of section 2010 set out in dicta in two prior appellate court 
decisions — North American Asbestos Corp. v. Superior Court (1982) 128 Cal.App.3d 
                                              
2  
Delaware General Corporation Law section 278 provides, in part:  “All 
corporations, whether they expire by their own limitation or are otherwise dissolved, shall 
nevertheless be continued, for the term of 3 years from such expiration or dissolution or 
for such longer period as the Court of Chancery shall in its discretion direct, bodies 
corporate for the purpose of prosecuting and defending suits, whether civil, criminal or 
administrative, by or against them, and of enabling them gradually to settle and close 
their business, to dispose of and convey their property, to discharge their liabilities and to 
distribute to their stockholders any remaining assets, but not for the purpose of continuing 
the business for which the corporation was organized.  With respect to any action, suit or 
proceeding begun by or against the corporation either prior to or within 3 years after the 
date of its expiration or dissolution, the action shall not abate by reason of the dissolution 
of the corporation; the corporation shall, solely for the purpose of such action, suit or 
proceeding, be continued as a body corporate beyond the 3-year period and until any 
judgments, orders or decrees therein shall be fully executed, without the necessity for any 
special direction to that effect by the Court of Chancery.”  (Del. Code Ann. tit. 8, § 278.)   
 
3 
138 (North American I), and Riley v. Fitzgerald (1986) 178 Cal.App.3d 871 (Riley) — 
and disagreed with the holding concerning that statute set out in a third appellate court 
decision, North American Asbestos Corp. v. Superior Court (1986) 180 Cal.App.3d 902 
(North American II).  As noted, we granted review to resolve the conflict.3   
II.  Discussion 
Section 2010 provides in relevant part:  “(a)  A corporation which is dissolved 
nevertheless continues to exist for the purpose of winding up its affairs, prosecuting and 
defending actions by or against it and enabling it to collect and discharge obligations, 
dispose of and convey its property and collect and divide its assets, but not for the 
purpose of continuing business except so far as necessary for the winding up thereof.”4  
Like the law in a few other states, the section sets no time limitation for suing a dissolved 
corporation for injuries arising from its predissolution conduct; the sole temporal 
limitation to such a suit is found in the applicable statute of limitations relating to each 
cause of action.  As we explained in Penasquitos, Inc. v. Superior Court (1991) 53 Cal.3d 
1180, 1190 (Penasquitos):  “Under our statutory scheme, the effect of dissolution is not 
so much a change in the corporation‟s status as a change in its permitted scope of 
                                              
3  
In the Court of Appeal, the parties stipulated to a dismissal of this case, but the 
appellate court elected to proceed with the opinion because the appeal had been fully 
briefed and raised issues warranting an opinion.  (See Eisenberg et al., Cal. Practice 
Guide: Civil Appeals and Writs (The Rutter Group 2009) ¶ 5:63, pp. 5-23 to 5-24.)  We 
agree with the Court of Appeal‟s conclusion in this regard.   
4  
The rest of section 2010 reads in full:  “(b) No action or proceeding to which a 
corporation is a party abates by the dissolution of the corporation or by reason of 
proceedings for winding up and dissolution thereof.  [¶]  (c) Any assets inadvertently or 
otherwise omitted from the winding up continue in the dissolved corporation for the 
benefit of the persons entitled thereto upon dissolution of the corporation and on 
realization shall be distributed accordingly.”   
 
4 
activity. . . .  Thus, a corporation‟s dissolution is best understood not as its death, but 
merely as its retirement from active business.”   
The parties agree that if section 2010 does not apply to a dissolved foreign 
corporation, defendant‟s capacity to be sued would be governed solely by Delaware‟s 
corresponding survival statute — and that law would bar plaintiffs‟ claims against 
defendant.  (See, e.g., In re RegO Co. (Del.Ch. 1992) 623 A.2d 92, 96 [Del.‟s three-year 
survival law precludes suit against a dissolved corporation even when the plaintiff did not 
know of the injury during that period].)  If, on the other hand, California‟s section 2010 
applies to a dissolved foreign corporation, a court would then be required to perform a 
choice-of-law analysis in order to determine which state‟s law should apply and govern 
defendant‟s capacity to be sued.  (See Kearney v. Salomon Smith Barney, Inc. (2006) 39 
Cal.4th 95, 107-108 (Kearney) [describing the traditional three-step choice-of-law 
inquiry].)5   
We proceed to describe the conflict in the appellate decisions concerning whether 
section 2010 applies to dissolved foreign corporations.   
                                              
5  
As we explained in Kearney:  “First, the court determines whether the relevant law 
of each of the potentially affected jurisdictions with regard to the particular issue in 
question is the same or different.  Second, if there is a difference, the court examines each 
jurisdiction‟s interest in the application of its own law under the circumstances of the 
particular case to determine whether a true conflict exists.  Third, if the court finds that 
there is a true conflict, it carefully evaluates and compares the nature and strength of the 
interest of each jurisdiction in the application of its own law „to determine which state‟s 
interest would be more impaired if its policy were subordinated to the policy of the other 
state‟ [citation], and then ultimately applies „the law of the state whose interest would be 
the more impaired if its law were not applied.‟  [Citation.]”  (Kearney, supra, 39 Cal.4th 
at pp. 107-108.)  The circumstance that “two states are involved does not in itself indicate 
that there is a „conflict of laws‟ or „choice of laws‟ problem.”  (Offshore Rental Co. v. 
Continental Oil Co., Inc. (1978) 22 Cal.3d 157, 161-162.)   
 
5 
A.  The conflicting appellate court decisions   
 1.  North American I   
In North American I, the plaintiffs, California residents, sued the defendant, an 
Illinois corporation, in California for asbestos-related personal injuries suffered in 
California.  Under the corporate survival law of Illinois, a corporation can be sued for 
two years after it files for dissolution.  The suit was filed more than two years after the 
defendant had dissolved.  (North American I, supra, 128 Cal.App.3d at p. 141.)   
The defendant moved to quash service of process, arguing it lacked the capacity to 
be sued under Illinois law.  The trial court denied the motion, and the Court of Appeal 
denied the defendant‟s writ petition, holding that service was proper and the appropriate 
method for the defendant to assert its lack of capacity to be sued was by demurrer or 
motion for judgment on the pleadings.  In dicta, the court stated that should the case go 
forward (and a court be required to determine whether the defendant had the capacity to 
be sued) it was “clear that the California survival law does not apply to suits against 
dissolved foreign corporations.”  (North American I, supra, 128 Cal.App.3d at p. 143.)  
The court based this conclusion on section 102, subdivision (a) (hereafter section 102(a)).  
(North American I, supra, at p. 144.)   
Section 102(a) specifies that the provisions of division 1 (the General Corporation 
Law) apply to (1) all “corporations organized under this division”; (2) specified 
“domestic corporations”; and (3) “other” corporations only to the extent the provisions of 
the code “expressly include[]” them.6   
                                              
6  
Before quoting section 102(a) in full, it is useful to briefly describe the structure of 
the Corporations Code.  The code is divided into various titles — title 1 (corporations), 
title 2 (partnerships), title 3 (limited liability companies), etc.  Within title 1, there are 
four divisions:  division 1 (General Corporation Law), division 1.5 (the Corporate 
Flexibility Act of 2011), division 2 (nonprofit corporations) and division 3 (corporations 
 
(footnote continued on next page) 
 
6 
The court in North American I construed section 102(a) as providing that “with 
certain exceptions not applicable here the provisions of the Corporations Code apply only 
to domestic corporations and that application to other corporations is permitted only „to 
the extent expressly included in a particular provision of this division.‟ ”  (North 
American I, supra, 128 Cal.App.3d at p. 144, italics added.)  The court observed that the 
survival statute, section 2010, “is in chapter 20 of division 1, which is entitled „General 
Provisions Relating to Dissolution.‟  Nowhere is there any mention that the provisions of 
that chapter or of section 2010 apply to foreign corporations.  Foreign corporations are 
the subject of the entire next chapter, chapter 21.”  (North American I, supra, at p. 144.)   
In addition, the court in North American I relied on a then decades-old law review 
note, Foreign Corporations: Continuance of Existence After Dissolution (1947) 35 Cal. 
L.Rev. 306.  The note addressed the common law‟s treatment of dissolved corporations,7 
                                                                                                                                                                           
(footnote continued from previous page) 
 
for specific purposes).  Each division is subdivided into chapters and articles; divisions 2 
and 3 are further divided into designated parts.   
 
Chapter 1 (general provisions and definitions) of title 1, division 1, includes 
section 102(a), which provides in full:  “Subject to Chapter 23 (commencing with Section 
2300) (transition provisions), this division applies to corporations organized under this 
division and to domestic corporations that are not subject to Division 1.5 (commencing 
with Section 2500), and to domestic corporations that are not subject to Division 2 
(commencing with Section 5000) or Part 1 (commencing with Section 12000), 2 
(commencing with Section 12200), 3 (commencing with Section 13200), or 5 
(commencing with Section 14000) of Division 3 on December 31, 1976, and that are not 
organized or existing under any statute of this state other than this code; this division 
applies to any other corporation only to the extent expressly included in a particular 
provision of this division.”  (Italics added.) 
7  
Under the common law, as with a deceased person, a dissolved corporation could 
not sue or be sued.  (Crossman v. Vivienda Water Co. (1907) 150 Cal. 575, 580; see 
Comment, Corporations — Dissolution — Directors as Trustees (1913) 1 Cal. L.Rev. 
266 [describing the common law rule and the practical problems it caused, and proposing 
a statute like those then in other states, “forfeiting the right of [a dissolved] corporation to 
 
(footnote continued on next page) 
 
7 
and California‟s then relatively new survival statue, enacted in 1929 — Civil Code 
former section 399, the direct predecessor of current Corporations Code section 2010.  
The note observed that “some courts, relying on the general policy of their corporation 
statutes, have held that the [survival] law of the forum applies to foreign as well as 
domestic corporations” and that in view of high court authority “[i]t is settled that such an 
extension is valid.”  (35 Cal. L.Rev. at pp. 308-309, fns. omitted.)  After analyzing the 
existing California statutes — including Civil Code former section 278, which provided a 
narrow definition of the term “corporation” that expressly excluded foreign entities — the 
note author concluded that because California‟s survival statue did not expressly provide 
that foreign corporations were included within its scope, the statute “could hardly be 
applied to foreign corporations.”  (35 Cal. L.Rev. at p. 309; see id., fn. 23.)  The author 
proposed that “for the protection of the corporation, the public, and creditors” the statute 
should be amended to apply as well to foreign corporations.  (35 Cal. L.Rev. at p. 309.)  
But, as the court in North American I observed, “[n]o such amendment has taken place.”  
(North American I, supra, 128 Cal.App.3d at p. 144.)   
The court in North American I reasoned that these statutory provisions and this 
history led to the conclusion that “the California survival law does not apply to suits 
against dissolved foreign corporations.”  (North American I, supra, 128 Cal.App.3d at 
p. 143.)   
2.  Riley 
In Riley, supra, 178 Cal.App.3d 871, the plaintiffs, who were the sole shareholders 
of a dissolved Texas corporation and assignees of its assets, sued on behalf of themselves 
                                                                                                                                                                           
(footnote continued from previous page) 
 
do business, but preserving its existence for two years at least, for the sole purpose of 
suing and being sued”].)   
 
8 
and the dissolved corporation, seeking to recover damages sustained by the Texas 
corporation prior to its dissolution.  The plaintiffs charged the defendants, California and 
Texas residents, with fraud and breach of fiduciary duty.  Prior to the action, the parties 
had stipulated that the plaintiffs‟ capacity to sue would be the same as that of the Texas 
corporation under that state‟s corporate survival law.  Texas law provides that a 
corporation continues to exist for three years after dissolution for the purpose of winding 
up its affairs, suing, and being sued.  The suit was filed more than three years after the 
Texas corporation dissolved.  (Id., at p. 874.)   
The defendants in Riley moved for judgment on the pleadings, asserting that the 
plaintiffs lacked capacity to sue under Texas law.  The trial court granted the motion.  
The Court of Appeal affirmed, finding that the plaintiffs had agreed to be bound by Texas 
law, which applied and barred suit.  (Riley, supra, 178 Cal.App.3d at pp. 877-883.)  And 
in any event, the court stated in dicta, California‟s survival statute, section 2010, did not 
apply to foreign corporations.  (Riley, supra, at pp. 875-877.)   
Addressing that latter question, the court first cited case law from both California 
and Texas standing for the proposition that “the effect of corporate dissolution or 
expiration depends upon the law of [the corporation‟s] domicile.”  (Riley, supra, 178 
Cal.App.3d at p. 876.)8  The court found that “[n]othing in the California Corporations 
                                              
8  
The court cited three appellate court decisions, Fidelity Metals Corp. v. Risley 
(1946) 77 Cal.App.2d 377, 381, J.C. Peacock, Inc. v. Hasko (1960) 184 Cal.App.2d 142, 
150, and Lewis v. LeBaron (1967) 254 Cal.App.2d 270, 278-279.  It further signaled, 
“[s]ee also” two older decisions of this court, Anderson v. Derrick (1934) 220 Cal. 770, 
775, and Crossman v. Vivienda Water Co., supra, 150 Cal. at page 580.  All of these 
cases reflect the common law rule, which in turn is generally echoed in the Restatement 
Second of Conflict of Laws (1971), section 299 (“(1) Whether the existence of a 
corporation has been terminated or suspended is determined by the local law of the state 
of incorporation.  [¶]  (2) The termination or suspension of a corporation‟s existence by 
the state of incorporation will be recognized for most purposes by other states.”).  But as 
 
(footnote continued on next page) 
 
9 
Code indicates that this long-held principle has been overruled or superseded by statute.”  
(Riley, at p. 876.)  In reaching its conclusion the court relied substantially on section 
2115, located in chapter 21 (foreign corporations) of division 1, the General Corporation 
Law.   
Section 2115 was enacted as part of a comprehensive revision of the Corporations 
Code in the mid-1970s.  The section addressed so-called pseudo-foreign corporations — 
entities incorporated outside California, but that meet two tests:  (1) the corporation 
transacts more than half of its business (as measured by various objective criteria) in 
California, and (2) a majority of the voting securities are held by California residents.  
(See § 2115, subd. (a)(1) & (2).)  Such foreign corporations must abide by numerous 
specified statutes within division 1, the General Corporation Law — provisions that 
govern corporate “internal affairs” and would not otherwise apply to foreign entities.9  
This statute, which survived multiple challenges to its constitutionality in Wilson v. 
Louisiana-Pacific Resources, Inc. (1982) 138 Cal.App.3d 216,10 further mandates 
                                                                                                                                                                           
(footnote continued from previous page) 
 
we will see, this deferential approach has been eroded by statutes and judicial 
construction.   
9  
Section 2115, subdivision (b) subjects such foreign corporations to governance by 
the following provisions of division 1, the General Corporation Law.  Chapter 1 “(general 
provisions and definitions), to the extent applicable to the following provisions”:  
portions of chapters 3 (directors and management), 5 (dividends and reacquisitions of 
shares), 6 (shareholders‟ meetings and consents), 7 (voting of shares), 10 (sales of assets), 
and 11 (merger); all of chapters 12 (reorganizations) and 13 (dissenters‟ rights); portions 
of chapter 15 (records and reports); and all of chapter 16 (rights of inspection).   
10  
The court considered and rejected federal and state constitutional challenges to the 
statute based on claims including the full faith and credit clause, the commerce clause, 
the due process clauses, the contract clauses, and the equal protection clauses.  (Wilson v. 
Louisiana-Pacific Resources, Inc., supra, 138 Cal.App.3d at pp. 222-231.)   
 
10 
adherence to these provisions “to the exclusion of the law of the jurisdiction in which it is 
incorporated.”  (§ 2115, subd. (b).)   
In concluding that the survival statute did not apply to foreign corporations, the 
appellate court in Riley observed that the statute is part of chapter 20, which concerns 
dissolution, and is not listed in section 2115 of chapter 21, setting out the statutes that 
apply to the foreign corporations that have the most extensive contacts with California.  
(Riley, supra, 178 Cal.App.3d at p. 876.)  Finally, the court in Riley also found support 
for its conclusion in North American I‟s analysis, described earlier.  (Riley, supra, at 
pp. 876-877.)   
3.  North American II 
North American II involved the same defendant as North American I.  And as in 
that earlier case, the plaintiff, a California resident, filed a personal injury action against 
the dissolved Illinois corporation, seeking compensation for asbestos-related injuries.  
Again, suit was filed more than two years after the defendant had dissolved.  The 
defendant moved for summary judgment, asserting it lacked the capacity to be sued under 
the Illinois two-year survival law.  The trial court denied the motion, ruling that 
California‟s survival statute, section 2010, applied to the defendant.  (North American II, 
supra, 180 Cal.App.3d at p. 905.)   
The Court of Appeal, First Appellate District, Division Three — the same division 
that had decided North American I — affirmed in a two-to-one decision, with Justice 
Scott, the author of North American I, in dissent.   
In concluding that section 2010 applied to foreign corporations, the majority in 
North American II did not address Riley, supra, 178 Cal.App.3d 871, which had been 
filed almost two months earlier.  It acknowledged that its new conclusion “deviates from 
the dicta in [North American I], where this court said that Corporations Code section 
2010 applied only to domestic corporations.”  (North American II, supra, 180 Cal.App.3d 
at p. 908.)  The court explained that “[o]n further reflection and examination of some of 
 
11 
the history behind Corporations Code section 2010 and related provisions of corporation 
law, we have concluded that section 2010 should not be so read under the circumstances 
of the case at bench, but should be read to protect the interests of California.”  (Ibid.)   
The majority in North American II observed that in 1929, when the predecessor to 
section 2010 was enacted, the state Constitution contained a since-repealed clause — 
included in the California Constitution of 1879 — providing that “[n]o corporation 
organized outside the limits of this State shall be allowed to transact business within this 
State on more favorable conditions than are prescribed by law to similar corporations 
organized under the laws of this State.”  (Cal. Const., art. XII, former § 15 [repealed in 
1972], italics added.)  The majority stated that pursuant to this former constitutional 
provision “a statute placing an obligation on a domestic corporation, such as one 
permitting suit against it long after its dissolution, would be read as placing a similar 
burden on a foreign corporation licensed to transact intrastate business in California . . . .”  
(North American II, supra, 180 Cal.App.3d at p. 908.)   
The majority in North American II reasoned,  “Article XII, section 15, was in 
effect when the original version of Corporations Code section 2010, applying survival 
law to „[all] corporations,‟ was adopted . . . .  [A]t that time Civil Code section 283 . . . 
stated that the provisos of its title were applicable to „every private corporation,‟ ” and 
“[m]any other sections [of the statutory scheme as originally adopted in 1929] specified 
„domestic corporation‟ or „foreign corporation‟ when such a limitation was intended 
[citations].  Thus, in 1929 it was clear that California’s survival law applied to both 
foreign and domestic corporations.”  (North American II, supra, 180 Cal.App.3d at 
p. 908, italics added.)   
The appellate court majority acknowledged that very soon after enactment of the 
survival statute in 1929, the Legislature in 1931 narrowly defined the term “corporation” 
as meaning — unless expressly provided otherwise — “only a domestic corporation.”  
(North American II, supra, 180 Cal.App.3d at p. 908 [referring to Civ. Code, former 
 
12 
§ 278, as added by Stats. 1931, ch. 862, § 2, p. 1764, & amended by Stats. 1933, ch. 533, 
§ 1, p. 1358].)  This definition continued in force until 1977, when the existing 
Corporations Code was repealed and replaced with the current code, which included 
corresponding new sections 102(a) (quoted ante, fn. 6) and 16211 — each of which 
similarly limits the applicability of the various statutes set out in division 1 of the new 
Corporations Code, and the term “corporation” as used in that new code.  The majority in 
North American II conceded that in light of these various provisions, “the term 
„corporation‟ used in [the survival statute,] . . . section 2010 could arguably have come to 
mean only a domestic corporation.”  (North American II, supra, 180 Cal.App.3d at 
p. 908, italics added.)  The appellate court found, however, that the “circumstances of the 
repeal of article XII, section 15, show that no such change in the law was intended and 
that ‘corporation’ as used in section 2010 [and its predecessors] still has its original 
meaning, covering both domestic and foreign corporations to the extent that foreign 
corporations will not receive more favorable treatment than domestic corporations.”  (Id., 
at pp. 908-909, italics added.)12   
                                              
11  
Section 162 defines the term “corporation,” “unless otherwise expressly 
provided,” to mean “only . . . a corporation organized under this division or a corporation 
subject to this division under the provisions of subdivision (a) of Section 102.”  Section 
167 provides, “ „Domestic corporation‟  means a corporation formed under the laws of 
this state”; correspondingly, section 171 provides, “ „Foreign corporation‟ means any 
corporation other than a domestic corporation” but does “not include a corporation . . . 
chartered under the laws of the United States.”   
12  
The majority in North American II explained the basis for this conclusion:  
“Repeal of article XII, section 15, was first proposed in 1967 by the Article XII 
Committee of the Constitution Revision Commission (Minutes of the Meeting of the 
Constitution Revision Commission, February 16, 1967 [at p. 2]).  The committee 
suggested deletion of section 15 because „[t]he section can be dealt with by statute.  The 
committee recommended deletion of the entire section.‟  (Ibid.)  The report of the 
California Constitution Revision Commission, dated 1968, page 92, proposed repeal of 
section 15 with the following comment:  „Equal treatment of foreign and domestic 
 
(footnote continued on next page) 
 
13 
The majority in North American II continued:  “Because the electorate did not 
intend to change the law by repeal of article XII, section 15, we read the term 
„corporation‟ in Corporations Code section 2010 to have its original meaning when we 
are dealing with the question of whether a foreign corporation will receive more 
favorable treatment than a domestic corporation, that is, to include both domestic and 
foreign corporations.  Though the Legislature added definitional sections in 1931 
[citation] and took other steps to tighten up the language of the corporation laws, it never 
took deliberate action to abrogate the original policy of treating foreign corporations no 
more favorably than domestic corporations with respect to their capacity to be sued.  Nor 
did the electorate take action intended to exempt foreign corporations from the California 
survival law.  We read section 2010 in accordance with the intentions of both the 
Legislature and the electorate.”  (North American II, supra, 180 Cal.App.3d at p. 909, 
italics added.)   
The majority in North American II next addressed and rejected the suggestion that 
section 2115 — which, as observed earlier, had been relied upon by the court in Riley — 
should lead to a different conclusion.  (North American II, supra, 180 Cal.App.3d at 
pp. 909-910.)13  In closing, the majority observed that there is no constitutional 
                                                                                                                                                                           
(footnote continued from previous page) 
 
corporations is assured by other provisions of the California and Federal Constitutions.  
The transaction of business in California by foreign corporations also is governed by 
extensive statutes.  This Section therefore is deleted as unnecessary.‟  After being 
defeated twice at the polls, the proposal to repeal article XII, section 15 (along with 
several other provisions), was approved at the primary election held June 6, 1972.  The 
ballot argument supporting repeal stated only that the proposition approved was 
„basically a housekeeping measure to eliminate obsolete and unnecessary words from the 
Constitution.  No new material is added to the Constitution, and there is no change in law 
or policy.‟ ”  (North American II, supra, 180 Cal.App.3d at p. 909.)   
13  
The majority reasoned:  “Section 2115 subjects certain foreign corporations with 
extensive property, payroll, sales, and shareholders in California to a panoply of 
 
(footnote continued on next page) 
 
14 
impediment to a state‟s subjecting foreign corporations to the burdens of its own survival 
statue.  (North American II, at p. 910.)14   
                                                                                                                                                                           
(footnote continued from previous page) 
 
provisions of the California Corporations Code.  Missing from the list is Corporations 
Code section 2010.  Petitioner contends that this omission mandates a finding that section 
2010 applies only to domestic corporations and not to either purely foreign corporations 
or to the „quasi-foreign‟ corporations targeted by Corporations Code section 2115.  
However, petitioner[‟]s reasoning is flawed, and we read no significance from section 
2115‟s silence about section 2010.  It is evident from scrutiny of the list of provisions 
applied to „quasi-foreign‟ corporations that they cover the mechanics of corporate life” — 
so-called “internal affairs” — “which would ordinarily be directed just to domestic 
corporations.  Stated in general terms, section 2115 merely provides that when a foreign 
corporation conducts more than one-half of its business in California and has more than 
one-half of its shareholders in the state, it will be subject to certain statutory provisions 
usually reserved for domestic corporations.  There is no indication that in enacting 
section 2115 the Legislature even considered the question of whether a foreign 
corporation should survive for purposes of suit.  It is apparent that the Legislature felt that 
the provisions encompassed in section 2115 should only apply to foreign corporations if 
the specified percentages for business and share holdings in our state were reached, but 
this does not indicate any intention on the part of our lawmakers that other provisions of 
the law may not be applicable to foreign corporations.  There are a myriad of statutory 
provisions that apply to foreign corporations that are not included in section 2115.  And 
the absence of these statutory provisions from section 2115 is for a good reason, because 
they apply to all foreign corporations, not just to corporations which meet the percentage 
figures prescribed in section 2115.”  (North American II, supra, 180 Cal.App.3d at 
pp. 909-910.)   
14  
The court stated:  “This question was answered by the United States Supreme 
Court in Clark v. Williard [(1934)] 292 U.S. 112.  In circumstances similar to these, the 
court considered an argument that the corporation‟s capacity for suit should be 
determined by application of the law of its domicile.  The court found, however, that the 
cited cases expressed a rule that was „to be applied when there is no statute or public 
policy to the contrary in the state where the foreign corporation has been licensed to do 
business.  They do not delimit the capacity of a state, when granting such a license, to 
subject it to conditions.‟  (Id., at p. 119.)”  (North American II, supra, 180 Cal.App.3d at 
p. 910.)  The majority observed that the foreign corporation in the matter before it had 
been licensed to conduct business in California when its activities within the state gave 
rise to the lawsuit, and concluded that section 2010, as construed, could properly govern 
suits against the foreign corporation.  (North American II, supra, at p. 910.)   
 
15 
Justice Scott, who authored the unanimous opinion in North American I, dissented, 
maintaining that section 2010 did not apply to dissolved foreign corporations.  Justice 
Scott relied on the reasoning set out in North American I, supra, 128 Cal.App.3d 138, and 
he rejected the majority‟s analysis concerning the pseudo-foreign corporation statute, 
section 2115.  (North American II, supra, 180 Cal.App.3d at pp. 911-913 (dis. opn. of 
Scott, J.).)   
Specifically disagreeing with the majority‟s analysis regarding the repealed 
constitutional provision (Cal. Const., art. XII, former § 15), Justice Scott wrote:  “The 
only significant change since the decision in North American I is the majority‟s discovery 
of reports showing that the Constitution Revision Commission and the electorate may not 
have realized the full impact of the decision to repeal article XII, section 15 of the 
California Constitution.  But no amount of electoral error in repealing article XII, section 
15, can supply a missing word to Corporations Code section 2110.  Whether the 
electorate realized it or not, repeal of article XII, section 15, removed the only bar to 
treating foreign corporations more favorably than domestic corporations with regard to 
corporate survival as the Legislature most clearly has done.”  (North American II, supra, 
180 Cal.App.3d at p. 913 (dis. opn. of Scott, J.).)   
B.  The decision below  
The Court of Appeal below agreed generally with North American I, supra, 128 
Cal.App.3d 138, and Riley, supra, 178 Cal.App.3d 871 — and disagreed with North 
American II, supra,180 Cal.App.3d 902 — concluding that section 2010 does not apply 
to a dissolved foreign corporation.  In reaching that determination, the appellate court 
relied on three provisions of the Corporations Code described earlier:  section 102(a), 
which, the court found, limits the application of the provisions of the code solely to 
certain domestic corporations, unless a provision expressly provides otherwise; section 
162, which, considered with section 102(a), the court found, evinces “a clear intent to 
limit the Corporations Code‟s general application to domestic corporations”; and section 
 
16 
2115, which, the court noted, “identifies all of the chapters and sections of the 
Corporations Code that apply to foreign corporations meeting certain threshold 
requirements, [but] does not mention section 2010.”   
Having found the statutory scheme sufficiently clear on its face, the appellate 
court below dismissed as “somewhat convoluted” — and in any event irrelevant — the 
constitutional analysis that influenced the majority in North American II.  The court 
viewed plaintiffs‟ argument in this regard as a facet of the statutory construction issue, 
and wrote:  “Repeating the reasoning of North American II, plaintiffs here contend the 
1972 repeal of article XII, section 15, of the California Constitution shows a legislative 
intent that California Corporations Code section 2010 apply to foreign corporations.  It is 
well established, however, that legislative intent should not be resorted to where a statute 
is clear on its face.  „In determining legislative intent, courts look first to the words of the 
statute itself:  if those words have a well-established meaning, as we hold they do here, 
there is no need for construction and courts should not indulge in it.‟  [Citation.]”  The 
appellate court below did not otherwise address the constitutional arguments raised by the 
majority in North American II, or by plaintiffs in this case.   
C.  Contentions and analysis 
Plaintiffs advance alternative arguments in support of their assertion that the 
survival statute, section 2010, applies to dissolved foreign corporations.  First, they assert 
that the Corporations Code, properly construed, renders foreign corporations like 
defendant subject to the statute — and they also argue that such an interpretation would 
promote sound policy objectives.  Second, plaintiffs assert that even if the code does not 
make foreign corporations subject to California‟s survival statute, California‟s 
Constitution mandates that same result.  We address these arguments in turn.   
 
17 
 1.  Do section 102(a) and related provisions render foreign corporations like 
      defendant subject to section 2010, the survival statute?   
As alluded to earlier, the statutes governing the formation, conduct, and existence 
of business (for profit) corporations in California are found in the many chapters and 
scores of sections of title 1, division 1, the General Corporation Law, sections 1-2319.15  
Plaintiffs rely primarily on section 102(a) (quoted in full ante, fn. 6), which as noted 
earlier defines the application of the General Corporation Law, and its numerous 
statutory provisions, including section 2010.  Reduced to its essence as relevant here, 
section 102(a) specifies that the General Corporation Law, division 1, applies to (1) 
“corporations organized under this division,” to (2) certain “domestic corporations” and 
to (3) “any other corporation only to the extent expressly included in a particular 
provision of this division.”  (Italics added.)16   
Plaintiffs assert that section 102(a) and related provisions disclose legislative 
intent to apply the survival statute, section 2010, to foreign corporations like defendant 
that transact business in California.  As explained below, we disagree.   
The parties concur that the second and third categories of corporations subject to 
the General Corporation Law under section 102(a) are not implicated in the present case.  
The second category was adopted to make it clear that the comprehensive mid-1970s 
amendments to the General Corporation Law applied not only to future entities 
“organized under” it, but also to the many existing domestic corporations organized under 
                                              
15  
Other types of corporations — nonprofit, “flexible,” and those for specific 
purposes — are addressed in title 1, division 1.5 (§§ 2500-3500), division 2 (§§ 5002-
10840) and division 3 (§§ 12000-14550).   
16  
Correspondingly, as observed ante, footnote 11, section 162 defines the term 
“corporation” — “unless otherwise expressly provided” — to mean “only . . . a 
corporation organized under this division or a corporation subject to this division under 
the provisions of subdivision (a) of Section 102.”  (Italics added.)   
 
18 
prior California laws.17  But defendant is not a domestic corporation, and hence does not 
fall within that category.  And unlike some other sections within division 1 that expressly 
apply to “other” (including foreign) corporations,18 section 2010, the survival statute, 
does not.   
This leaves the first category set out in section 102(a) — “corporations organized 
under this division.”  Based on this language, it would appear to be doubtful that 
defendant is a corporation within that category.  The phrase “organized under,” given its 
ordinary usage, would seem to relate to the fundamental creation and structuring of a 
corporation — matters governed by division 1, chapter 2 (organization and bylaws), 
sections 200-213.  Defendant, incorporated in Delaware, clearly was not formed or 
created under division 1, the General Corporation Law.   
Plaintiffs nevertheless insist that defendant was indeed “organized under division 
1.”  They reason as follows:  (i) The code defines the term “domestic corporation” as “a 
corporation formed under the laws of this state” (§ 167, italics added); (ii) by using the 
different phrase “organized under this division” in section 102(a), the Legislature must 
have intended to draw a distinction between “domestic” corporations and those 
“organized under” division 1 — and hence to include within the category of corporations 
subject to division 1, the General Corporation Law, those foreign corporations that 
                                              
17  
See, e.g., the legislative committee comments to division 1, chapter 23 (transition 
provisions):  “Section 102 provides that the new law is applicable to any corporation 
organized under it or to any business or private corporation organized under predecessor 
laws . . . .”  (Legis. Com. com., 2 Deering‟s Ann. Corp. Code (2009 ed.) p. 599.)   
18  
For examples of provisions expressly applying to foreign corporations, see 
sections 208 (authorization of and limitations on contracts by corporations), 
1108, subdivisions (a)-(f) (merger of corporations), 1157, subdivisions (a)-(f) (conversion 
of other entities into corporations), 1501, subdivision (g) (annual report to shareholders), 
1600, subdivision (d) (shareholders‟ rights of inspection), 1602 (director‟s right of 
inspection), and 2260 (penalty provisions).   
 
19 
transact business in the this state; (iii) defendant qualifies as being “organized under this 
division” because under division 1, chapter 21 (foreign corporations) defendant was 
subject to various requirements, which plaintiffs characterize as “organizational mandates 
for transacting intrastate business” in California.   
Specifically, as plaintiffs observe, pursuant to chapter 21 of division 1 all “foreign 
corporations transacting intrastate business” in California (§ 2100)19 must not only obtain 
a certificate of qualification to do so (§ 2105, subd. (a)) but must also set up and consent 
to a California agent for service of process, pay state fees, select a permissible corporate 
name for use in California, and continually update and amend their filings here.  
(§§ 2105, subd. (a)(4) & (5)(A) [accepting service of process], 2106, subds. (a) [paying 
“fees required by law”] & (b) [using a corporate name that does not conflict with a Cal. 
business], 2107 [duty to update and amend all required filings].)  These requirements of 
chapter 21, plaintiffs assert, constitute “organizational mandates” that, in turn, render 
each foreign corporation that complies with them “organized under” division 1.   
Defendant observes in its answer brief that nothing in these statutes governing 
qualification to transact business in California refers to such requirements as 
“organization,” or as plaintiffs characterize them, “organizational mandates.”  Nor, 
defendant asserts, does the code contemplate that a foreign corporation is “ „organized‟ 
under California law simply by virtue of qualifying to transact interstate business.”  
Neither, defendant argues, did the Legislature contemplate that a corporation could be 
“organized” under the laws of more than one state.20  And yet, defendant asserts, under 
                                              
19  
The Corporations Code defines “transact[ing] intrastate business” as “entering into 
repeated and successive transactions of its business in this state.”  (§ 191, italics added.)   
20  
When referring to where a corporation is organized, the code uniformly speaks of 
“the jurisdiction” or “the state” in the singular.  (See §§ 317, subd. (i), 1108, subd. (d), 
1109, 1113, subd. (j)(4), 1152, subd. (a)(5), 1155, subd. (b)(3), 1156, subd. (a), 2101, 
subd. (b), 2105, subd. (a)(1), 2112, subd. (a)(1).)   
 
20 
plaintiffs‟ theory a corporation would be “organized” under the laws of every state where 
it qualifies to conduct business — with profound consequences.   
As defendant observes, under plaintiffs‟ reading of section 102(a), “every foreign 
corporation that qualified to do business in California would be governed by all of 
division 1”21 — including all of California‟s myriad provisions in division 1 relating to 
organization and bylaws (ch. 2, §§ 200-213), directors and management (ch. 3, §§ 300-
318), shares and share certificates (ch. 4, §§ 400-423), dividends and reacquisitions of 
shares (ch. 5, §§ 500-508), shareholders‟ meetings and consents (ch. 6, §§ 600-605), 
voting of shares (ch. 7, §§ 700-711), shareholder derivative actions (ch. 8, § 800), 
amendment of articles (ch. 9, §§ 900-911), sale of assets (ch. 10, §§ 1000-1002), merger 
(ch. 11, §§ 1100-1113), dissenters‟ rights (ch. 13, §§ 1300-1313), records and reports 
(ch. 15, §§ 1500-1511), rights of inspection (ch. 16, §§ 1600-1605), dissolution (chs. 18-
20, §§ 1800-1809, 1900-1907, 2000-2011), and crimes and penalties (ch. 22, §§ 2200-
2260).  Defendant asserts that plaintiffs “provide no basis to pluck out particular sections, 
such as [the survival provision, section] 2010, and hold that the particular section applies 
but the rest of division 1 does not.”   
Under plaintiffs‟ view, if a foreign corporation were to challenge the application 
of any such California provision, a choice-of-law inquiry (see ante, fn. 5) would be 
triggered concerning each of the various ways in which California corporate law differs 
from that of other jurisdictions.  Defendant contends that such a system would be 
unworkable,22 and asserts that the Legislature could not have intended such a “radical 
change” and “bizarre regime.”   
                                              
21  
Here and elsewhere we have, for consistency, altered the capitalization of 
“division” and related terms from that set out in the briefs.   
22  
Defendant argues that under such scheme, “foreign corporations would find 
themselves having to follow a litany of requirements regarding various corporate 
 
(footnote continued on next page) 
 
21 
Additionally, defendant asserts, plaintiffs‟ interpretation of this key language 
“would render almost completely irrelevant the other provisions of chapters 1 through 20 
that expressly apply to foreign corporations.  (See [statutes cited ante, fn. 18].)  For 
example, [section] 1501[, subdivision] (g), which pertains to annual reports to 
shareholders, states that the requirements apply to a certain subset of foreign corporations 
— those with their principal executive office in this state or that customarily hold board 
meetings in the state.  The intended scope of [section] 1501 would be significantly altered 
by plaintiffs‟ interpretation of the code, again because all foreign corporations qualified 
to do business in California would fall within the ambit of division 1, including chapter 
15, not just those foreign corporations with their principal office in this state or that 
customarily hold board meetings in this state.”  (Italics added.)   
Finally, defendant argues that “[b]y making all of division 1 applicable to any 
foreign corporation qualified to do business in California, plaintiffs‟ proposal would 
render [section] 2115 [imposing certain California requirements, described ante, fn. 9, on 
pseudo-foreign corporations] largely superfluous.”  Defendant asserts:  “[U]nder 
plaintiffs‟ interpretation . . . all the sections [covered by section 2115] would already 
apply to these foreign corporations because all such corporations would be considered 
„organized under‟ division 1.”   
                                                                                                                                                                           
(footnote continued from previous page) 
 
activities that their home state already regulates, creating innumerable, treacherous 
conflicts of law that the corporation would find impossible to navigate.  For example, if a 
Delaware corporation wanted to amend its charter, engage in a merger, or declare a 
dividend, matters governed by both Delaware and California law, and the provisions of 
the two states differed as to these matters, the foreign corporation would have to engage 
in its own choice-of-law analysis to determine which states‟ law it needed to follow.”  
(Citing § 500 and Del. Code Ann., tit. 8, § 170, setting forth different financial tests that 
must be satisfied for a corporation to be able to pay a dividend.)   
 
22 
Plaintiffs respond to these various points — and specifically, to defendant‟s 
overarching argument that the scheme envisioned by plaintiffs would subject every 
foreign corporation that qualified to do business in California to governance by all of 
division 1 and hence would be unworkable and could not have been contemplated by the 
Legislature — by contending that the code can be harmonized in a way that diminishes 
the problems identified by defendants.  According to plaintiffs, the Legislature has 
created “three classes of foreign corporations that do business in California”:  (1) 
Corporations that engage in only occasional business in California, and hence are not 
subject to the “qualification” requirements of division 1, chapter 21 (§§ 2105-2107); (2) 
corporations that engage in successive and repeated business in California, and hence are 
subject to these statutory qualification requirements; and (3) so-called pseudo-foreign 
corporations that conduct the majority of their business, etc., in California, and are hence 
subject not only to these statutory qualification requirements, but also to the additional 
requirements imposed by section 2115.  Plaintiffs assert:  Corporations that fall into 
category (1) do not qualify as being “organized under” division 1, and hence they are not 
subject to its requirements.  On the other hand, plaintiffs argue, corporations falling into 
categories (2) and (3) are indeed “organized under” division 1, and they are hence subject 
to the requirements of division 1, albeit in different ways.  Plaintiffs postulate that 
corporations falling within category (2) — like defendant here — are governed by all of 
the requirements of division 1 (including the survival provision, § 2010), subject to the 
outcome of a choice-of-law analysis with regard to each California statutory provision 
that conflicts with a provision governing the corporation in its state of incorporation.  By 
contrast, plaintiffs maintain, with regard to category (3), because section 2115‟s 
enumerated requirements apply “to the exclusion of the law of the jurisdiction in which it 
 
23 
is incorporated” (id., subd. (b)), the various California requirements listed in that section 
(described ante, fn. 9) apply automatically, without being subjected to any choice-of-law 
analysis.23 
As defendant observes, plaintiffs‟ expansive interpretation of section 102(a) would 
appear to render largely superfluous the various statutory provisions within division 1 
that, pursuant to the third clause of section 102(a), specifically subject foreign 
corporations to their requirements.  (See, e.g., statutes cited ante, fn. 18.)  Under 
plaintiffs‟ interpretation, no “category (1)” corporation would ever be subject to such 
specifically extended requirements — thus nullifying the statutory extensions as to those 
corporations.  And also under plaintiffs‟ interpretation, all “category (2)” corporations 
would already be automatically governed by those statutes — subject, of course, to 
choice-of-law analysis — thus rendering such specifically extended requirements 
essentially superfluous as applied to those corporations.  And with regard to “category 
(3)” corporations — pseudo-foreign entities that are subject to the additional enumerated 
statutory requirements of section 2115 — they too would already be automatically 
governed by many of those statutes; moreover, as observed, ante, footnote 23, with 
regard to division 1 statutes not specifically enumerated in section 2115, pseudo-foreign 
corporations also would be governed by those additional statutes, subject to choice-of-
law analysis.   
We discern in the statutes no evidence that the Legislature intended by section 
102(a) to accomplish the dramatic result ascribed to it by plaintiffs — essentially, 
                                              
23  
Presumably, under plaintiffs‟ theory, with regard to this third category, other 
statutory requirements of division 1 not enumerated in section 2115 would, as with 
“category (2)” matters, be subject to the outcome of a choice-of-law analysis with regard 
to each California statutory provision that conflicts with a provision governing the 
corporation in its state of incorporation.   
 
24 
imposing on all “category (2)” foreign corporations that are qualified to undertake 
repeated and successive business in California, the burden of complying with all 
provisions of division 1, subject to what would often be a difficult choice-of-law analysis 
with regard to each California statutory provision that conflicts with a provision 
governing the corporation in its state of formation.  As defendant suggests, such a scheme 
would require foreign corporations to “follow a litany of requirements regarding various 
corporate activities that their home state already regulates, creating innumerable, 
treacherous conflicts of law that the corporation would find impossible to navigate.”  (See 
ante, fn. 22.)  We would expect the Legislature to have made its intentions clear had it 
intended to adopt such an elaborate and litigation-intensive scheme.   
For these reasons we disagree with plaintiffs‟ assertion that foreign corporations 
like defendant, that have qualified under sections 2105-2107 to undertake “repeated and 
successive transactions of its business in this state” are thereby rendered “organized 
under” division 1, the General Corporation Law, and hence subject to its myriad 
provisions, including section 2010.  Accordingly, we are disposed to reject plaintiffs‟ 
interpretation of section 102(a) and related statutes.   
2.  The construction of the code by the majority in North American II   
 
As observed earlier, the majority in North American II, supra, 180 Cal.App.3d 
902, reached a contrary conclusion based in part on its view of the proper interpretation 
of the statutory predecessor to the survival statute, section 2010 — Civil Code former 
section 399,24 which was enacted in 1929 as part of a corporation law modernization 
                                              
24  
Civil Code former section 399 read in relevant part:  “All corporations, whether 
they expire by their own limitation, by forfeiture of charter by order of court, or are 
otherwise dissolved, shall nevertheless continue to exist for the purpose of winding up 
their affairs, prosecuting and defending actions by or against them, and of enabling them 
to collect and discharge obligations, to dispose of and convey their property, and to 
collect and divide their assets, but not for the purpose of continuing the business for 
 
(footnote continued on next page) 
 
25 
project spanning 1929-1933.25  Like section 2010, former section 399 of the Civil Code 
did not explicitly state whether it applied solely to domestic corporations or to both 
domestic and foreign corporations, and there is no indication that the Legislature 
specifically addressed that issue — even though an example for such an expansive 
                                                                                                                                                                           
(footnote continued from previous page) 
 
which the corporation was established.  [¶]  Any assets inadvertently or otherwise omitted 
from the winding up shall continue in the dissolved corporation for the benefit of the 
persons who would have been entitled thereto upon dissolution of the corporation, and on 
realization shall be distributed accordingly.”  (Stats. 1929, ch. 711, § 29, p. 1277.)   
25  
Sparked by an article — Ballantine, Legislative Developments in Corporation Law 
(1927) 15 Cal. L.Rev. 422 — the State Bar in 1928 proposed reform of California‟s 
corporation law, then housed in the Civil Code.  The State Bar appointed a Committee on 
Revision of the Corporation Laws (State Bar Committee), which reviewed the statutes of 
other jurisdictions as well as the Uniform Business Corporation Act (1928) and other 
available sources.  (See generally Ballantine, Plans for a Modernized Incorporation Law 
(1928) 16 Cal. L.Rev. 425; Ballantine, Changes in California Corporation Laws (1929) 
(1929) 17 Cal. L.Rev. 529; Sterling, Modernizing California’s Corporation Laws (1936) 
12 Wisc. L.Rev. 453, 455-460 (Sterling).)   
From the inception of the project it was understood that, for legal and practical 
reasons, the necessary amendments would have to be accomplished over successive 
legislative sessions — in 1929, 1931, and 1933.  Those changes that could be enacted 
early in the process were so enacted.  (Stats. 1929, ch. 711, §§ 1-43, pp. 1261-1287.)  But 
some of the contemplated amendments could not be enacted by the Legislature until 
certain restrictive and outdated provisions of article XII of the Constitution, governing 
corporations, first were repealed or amended — which was accomplished in November 
1930.  (See generally Ballantine, Cal. Corporation Laws (1932) pp. 2-6, quoting the 1930 
amendments and ballot arguments, and summarizing the changes, which did not affect 
art. XII, former § 15, discussed post, pt. II.C.3.)  Thereafter, in phase two of the 
corporation law reforms, the bulk of the State Bar Committee‟s substantive changes were 
enacted in 1931.  (Stats. 1931, ch. 862, §§ 1-3, pp. 1762-1835.)  Finally, in 1933, the 
State Bar Committee proposed and the Legislature enacted “clean up” amendments to 
statutes and recent revisions.  (Stats. 1933, ch. 533, §§ 1-96, pp. 1358-1420.)  For these 
reasons, it is appropriate to view the corporation law amendments of 1929-1933 as a 
coordinated and synchronized package.   
 
26 
approach then existed in New Jersey, the state upon which California‟s survival statute 
was primarily modeled.26   
In concluding that the former version of the survival statute should be interpreted 
to apply to both domestic and foreign corporations, the court in North American II relied 
in part on the fact that in 1929, when the section was enacted, former section 283 of the 
Civil Code provided that the provisions within its title applied to “every private 
corporation.”  (North American II, supra, 180 Cal.App.3d at p. 908, italics added.)   
 
In order to understand what was meant by the phrase “every private corporation” 
in 1929 when the Legislature enacted former definitional section 283, along with former 
                                              
26  
According to the contemporaneous article, Ballantine, Questions of Policy in 
Drafting a Modern Corporation Law (1931) 19 Cal. L.Rev. 465, the California survival 
statute, by prolonging corporate life “for an indefinite period,” was based “on the model 
of the New Jersey statutes” — as distinguished from the approach of other jurisdictions 
that placed a limit, typically three years, on the “continuation of a quasi-corporate 
existence” for dissolution and winding up.  (Id., at p. 483; see 2 Compiled Stats. N.J. 
(1911) Corporations, § 53, pp. 1634-1635, § 59,  p. 1637 [P.L. 1896, pp. 295-296] 
[neither provision indicating whether it applied to foreign as well as domestic 
corporations].)  In other words, the State Bar Committee drafters focused on whether the 
survival period should be open ended, or fixed by a period of years — but, apparently, 
they did not focus on the specific issue that we face now, whether the new survival 
statute would apply to foreign as well as domestic corporations.   
 
Another provision of the New Jersey statutes addressed the issue we face now.  
When former section 399 of the Civil Code was enacted in 1929, a separate New Jersey 
statute provided:  “Foreign corporations doing business in this state shall be subject to 
the provisions of this act, so far as the same can be applied to foreign corporations.”  
(2 Compiled Stats. N.J., supra, Corporations, § 96, p. 1657 [P.L. 1896, p. 307], italics 
added.)  No similar provision was added in California, and the legislative history 
materials do not disclose that any such provision was considered.  We also observe that 
New Jersey soon thereafter added a statutory provision expressly providing that a 
dissolved “domestic or foreign corporation . . . shall continue as a body corporate for the 
purpose of defending such suit.”  (1934 N.J. Laws ch. 159, p. 400; see N.J. Rev. Stat. 
§ 14:13-14; Dr. Hess & Clark, Inc. v. Metalsalts Corp. (D.N.J. 1954) 119 F.Supp. 427 
[so construing the subsequent N.J. statute].)  Again, no such provision was added, or 
apparently considered, in California.   
 
27 
section 399, the predecessor to the survival statute, both as part of the Civil Code, that 
language must be read in the context of the definitions then existing.  Former section 284 
of the Civil Code remained unchanged by the 1929 legislation and specified that 
corporations were either “public” or “private”:  “Public corporations are formed or 
organized for the government of a portion of the State; all other corporations are private.”  
(As amended by 1873-1874 Code Amdts., p. 197.)  Significantly, Civil Code former 
section 285 — also amended in 1929 as part of that year‟s reform legislation package — 
had provided:  “Private corporations may be formed by the voluntary association of any 
three or more persons in the manner prescribed in this title [that is, the General 
Corporation Law, Civil Code former section 283 et seq., setting out the conditions of and 
mechanisms for forming a corporation in California].  A majority of such persons must 
be residents of this state.”  (Civ. Code, former § 285, as amended by Stats. 1905, ch. 392, 
§ 1, p. 502, italics added.)   
From these provisions, all of which derived from substantively identical 
predecessor statutes dating from the early 1870s,27 it appears that the phrase “every 
private corporation,” as employed through 1929 and beyond, referred only to a domestic 
corporation — one formed under California statutes.  Legislation passed in 1931, in the 
second phase of the coordinated modernization reforms, confirmed that definition.28  
                                              
27  
See 1 Annotated Civil Code, sections 284 and 285 (1st ed. 1872, Haymond & 
Burch, commrs.-annotators) pages 83-85; 1 Annotated Civil Code, sections 284 and 285 
(1st ed. 1874, Haymond & Burch, commrs.-annotators) pages 83-85.   
28  
During that phase of the State Bar project to reform California‟s corporation 
statutes (see ante, fn. 25), many substantive changes were adopted.  (Stats. 1931, ch. 862, 
§§ 1-3, pp. 1762-1835.)  The Legislature added section 279 of the Civil Code, retaining 
language from prior statutes dating back to the early 1870s, specifying that the 
“provisions of this title are applicable to every private corporation . . . .”  (Stats. 1931, 
ch. 862, § 2, p. 1765, italics added.)  Significantly, the Legislature also added a new 
definitional section, Civil Code former section 278, that erased any possible doubt 
 
(footnote continued on next page) 
 
28 
Indeed, a different and broader reading of the phrase “every private corporation” would 
have been inconsistent with the interpretation of similar language in other jurisdictions,29 
and with this court‟s application of the internal affairs doctrine, under which our state 
refrained from regulating the inner workings of foreign corporations (see, e.g., post, 
fn. 35).   
Accordingly, contrary to the majority opinion in North American II, supra, 180 
Cal.App.3d 902, 908, we do not infer that by specifying that the provisions of the General 
Corporation Law were applicable to “ „every private corporation,‟ ” the Legislature in 
1929 must have intended all of the various sections within that title to apply generally to 
both domestic and foreign business corporations.  The inference we draw is the opposite 
— that the Legislature intended its general statutes governing domestic corporations 
should apply to foreign corporations only as specifically provided in those statutes.30  It 
would have been unprecedented for the Legislature in 1929 to have intended otherwise.   
                                                                                                                                                                           
(footnote continued from previous page) 
 
concerning what was meant by the term “corporation”:  “ „Corporation,‟ unless otherwise 
expressly provided, refers only to a domestic corporation.”  (Stats. 1931, ch. 862, § 2, 
p. 1764, italics added.)  The same section also specified:  “ „Domestic corporation‟ means 
a corporation formed under the laws of this state, and „foreign corporation‟ means any 
other corporation.”  By these amendments, the Legislature further clarified what was 
apparent when it enacted the first phase of corporation reform amendments, including the 
survival statute, in 1929:  California‟s General Corporation Law applied to foreign 
corporations only as specifically provided in those statutes.   
29  
See, e.g., Comment, Foreign Corporations — State Boundaries for National 
Business (1949-1950) 59 Yale L.J. 737, 738 (reviewing past decisions and observing that 
“the statutory words „every corporation‟ have often been construed as embracing only 
domestic corporations”).   
30  
In the decades prior to 1929 the Legislature had exercised its authority by enacting 
statutes specifically extending certain burdens imposed on domestic corporations to 
foreign corporations.  (See, e.g., post, fn. 36.)  And in other situations, the Legislature 
apparently exercised its authority to refrain from extending such burdens, even in the face 
 
(footnote continued on next page) 
 
29 
Finally, regarding the survival statute in particular, we note that the leading 
treatises stated, and the majority of out-of-state decisions of that era held, that a state‟s 
survival statute did not apply to foreign corporations.31  A statute covering foreign as 
                                                                                                                                                                           
(footnote continued from previous page) 
 
of a decision by this court pointing out that the “Legislature alone” could make such an 
extension.  (South Yuba Water etc. Co. v. Rosa (1889) 80 Cal. 333, 336-337.)  We also 
note that in the course of its 1929-1933 coordinated reforms (see ante, fn. 25), the 
Legislature enacted a number of statutes that it specifically made applicable to foreign as 
well as domestic corporations.  (See former provisions of Civ. Code, enacted by 
Stats. 1931, ch. 862, § 2, pp. 1795-1803 [former §§ 329 (allowing action against domestic 
and foreign corporations concerning lost or destroyed bonds), 330.21, subd. (a) (the term 
“shares” under the Stock Transfer Act applied to “shares of stock in a domestic or foreign 
corporation”), & 345 (general provision concerning ultra vires acts “shall extend to 
contracts . . . made by foreign corporations in this state”)]; Stats. 1933, ch. 533, § 23, 
p. 1371 [former § 315 (procedures for determining the validity of election or appointment 
in California of “any director of any domestic corporation, or of any foreign 
corporation”); Stats. 1933, ch. 533, § 26, p. 1372 [former § 320b, subd. (4) (procedures 
for voting of shares in the name of “a corporation, domestic or foreign”)]; Stats. 1933, 
ch. 533, § 33, p. 1377 [former § 328e (granting domestic and foreign corporations 
immunity from liability concerning transfer of shares by minors)]; Stats. 1933, ch. 533, 
§ 54, p. 1388 [former § 355 (shareholders‟ inspection of records of domestic and foreign 
corporations)]; Stats. 1933, ch. 533, § 55, p. 1388) [former § 356 (director‟s inspection of 
records of domestic and foreign corporations)]; Stats. 1933, ch. 533, § 58, p. 1390 
[former § 359 (requiring provision of financial statements to shareholders of domestic 
corporations and “foreign corporations having the principal place for the transaction of 
their business in this State or customarily holding meetings of their boards of directors 
therein”)].)  As noted, Civil Code former section 399 did not expressly apply to foreign 
corporations.   
31  
According to the leading treatise of the day — Fletcher, Cyclopedia of the Law of 
Private Corporations (as updated by then-current supplements) — the clear majority rule 
was that a state‟s survival statute applied only to that state‟s domestic corporations, and 
not to foreign corporations.  (See id., vol. 8 (1919) § 5616, p. 9212 [“These statutes 
which prevent abatement [of suits against corporations] upon dissolution do not apply to 
foreign corporations”]; id., §§ 5628, 5629, p. 9221 [even though states‟ survival statutes 
are often applicable to “all” corporations, “such statutes do not apply to foreign 
corporations, it is generally held” (italics added)]; id., § 5819, p. 9719 [“By the weight of 
authority, it is held that such a statute has no application to foreign corporations”]; see 
 
(footnote continued on next page) 
 
30 
well as domestic corporations would have placed California outside the clear majority 
rule.  In light of the national scope of the comprehensive review that preceded the 
legislation (see ante, fn. 25), if our Legislature had contemplated such a dramatic change 
from the majority approach, we would expect it to have been clear in doing so.32   
                                                                                                                                                                           
(footnote continued from previous page) 
 
also 3 Cook on Corporations (8th ed. 1923), ch. XXXVIII, § 642, pp. 2402-2403 [“A 
statute that corporations shall continue for a certain time after their dissolution for 
purposes of litigation does not apply to foreign corporations”].)   
 
The minority view was acknowledged and criticized in Beale, The Law of Foreign 
Corporations (1904) section 828, pages 989-990:  “It may be claimed that a statute 
permitting a corporation to sue and be sued for a certain time after dissolution applies to a 
foreign corporation, and that such corporation, though dissolved in its own State, may 
nevertheless be party to a suit by virtue of the statute.  In a few jurisdictions the statute is 
interpreted as applying to foreign corporations, though the better view would seem to be 
that it applies to domestic corporations only.”  (Fns. omitted, italics added.)  The treatise 
acknowledged that a statute adopting the minority view would be constitutional.  (Id., at 
p. 990, citing McGoon v. Scales (1869) 76 U.S. 23.)   
 
Representative cases predating the late 1920s, reflecting the majority rule (that the 
survival statute did not cover foreign corporations), include the following:  Life Ass’n of 
America v. Goode (Tex. 1888) 8 S.W. 639; Marion Phosphate Co. v. Perry (5th Cir. 
1896) 74 F. 425 (applying Fla. Law); Dundee Mortgage & Trust Investment Co. v. 
Hughes (C.C. Or. 1898) 89 F. 182 (applying Or. law); Fitts v. National Life Ass’n (Ala. 
1900) 30 So. 374; Harris-Woodbury Lumber Co. v. Coffin (C.C.W.D.N.C. 1910) 179 F. 
257 (applying N.C. law); Riddell v. Rochester German Ins. Co. of New York (R.I. 1912) 
85 A. 273; Martyne v. American Union Fire Ins. Co. of Philadelphia (N.Y. 1915) 110 
N.E. 502.  Cases predating the late 1920s, reflecting the minority position that a survival 
statute covered foreign corporations, include the following:  Stetson v. City Bank of New 
Orleans (1853) 2 Ohio St.Rep. 167; Life Association of America v. Fassett (1882) 102 Ill. 
315; Hauger v. International Trading Co. (Ky.Ct.App. 1919) 214 S.W. 438.   
32  
That the Legislature did not so intend is further demonstrated by one of the various 
“clean-up” amendments recommended by the State Bar Committee drafters, and adopted 
by the Legislature, in the third phase of modernization reforms in 1933.  (Stats. 1933, ch. 
533, pp. 1358-1420; see generally Ballentine, Amendments of the California General 
Corporation Law (1933) 8 State Bar J. 136.)  Among those revisions was a slight change 
to the opening words of the survival statute, Civil Code, former section 399.  Whereas the 
1929 and 1931 versions commenced by specifying that the provision applied to “All 
 
(footnote continued on next page) 
 
31 
 3.  Even if the statutes do not make foreign corporations subject to California’s  
      survival statute, does California’s Constitution mandate that same 
      result?   
Plaintiffs insist that if, as above, we reject their statutory construction argument 
that defendant was “organized under” division 1 and for that reason is subject to section 
2010, that statute “still applies to [defendant]” under the compulsion of article XII, 
former section 15 of the California Constitution.  As noted earlier, that constitutional 
provision, which was repealed by the electorate in 1972, provided that corporations 
“organized outside the limits of this State” — e.g., foreign corporations — “shall [not] be 
allowed to transact business” in this state “on more favorable conditions than” 
corporations “organized under the laws of this State.”  (Cal. Const., art. XII, former § 15; 
hereafter article XII, former section 15.)  Plaintiffs concede that their constitutional 
argument, which they present as an “alternative” to their statutory contention, is 
somewhat in tension with it — in that each depends on a different understanding of the 
term “organized” — but they insist that it stands as an independent reason for this court 
to reverse the decision below.   
Underlying plaintiffs‟ argument are two premises:  (1) pursuant to article XII, 
former section 15, the “original meaning” of the survival statute in 1929 (and thereafter) 
was that it covered both domestic and foreign corporations (otherwise foreign 
corporations would “be allowed to transact business” in this state “on more favorable 
conditions than” domestic corporations); and (2) accordingly, the repeal of article XII, 
                                                                                                                                                                           
(footnote continued from previous page) 
 
corporations,” the 1933 version — adopting the language that is still used today in 
section 2010 — changed the opening sentence to read, “A corporation . . . .”  In context, 
this change appears to have been intended to further clarify that the survival statute 
applied, not literally to all corporations, but instead to corporations as defined elsewhere 
in the statutes — that is, to domestic corporations only.   
 
32 
former section 15 in 1972 did not alter that asserted original reach of the survival statute; 
instead, the constitutional provision lives on, at least insofar as the survival statute is 
concerned.  In advancing these arguments plaintiffs endorse the position of the appellate 
court majority in North American II, supra, 180 Cal.App.3d 902, and fault the decision of 
the appellate court below, and defendant‟s brief, for failing to “analyze, let alone refute, 
North American II‟s constitutional analysis.”   
It is true that the decision below failed to grapple with the North American II 
majority‟s constitutional analysis, and indeed defendant‟s brief addresses that issue only 
cursorily.  But having examined that matter ourselves, we conclude that plaintiffs, and the 
majority in North American II, have not properly construed the former constitutional 
provision.  As we will explain, North American II misinterpreted article XII, former 
section 15, when it read that section as intending to provide that every statutory 
restriction or requirement that the Legislature imposes upon a domestic corporation also 
must be imposed upon a foreign corporation.  Instead, the former constitutional 
provision, properly interpreted, simply prohibited the Legislature from explicitly granting 
a privilege or benefit to a foreign corporation that was withheld from domestic 
corporations — for example by permitting only a foreign corporation, and not domestic 
corporations, to engage in a particular business or in a particular location.   
Article XII, former section 15, was drafted and adopted by the delegates to the 
constitutional convention of 1878-187933 and endorsed by the voters later that year when 
they approved the new Constitution.  As noted, the provision read:  “No corporation 
organized outside the limits of this State shall be allowed to transact business within this 
                                              
33  
See 1 Willis & Stockton, Debates and Proceedings of the Constitutional 
Convention of the State of California (1878-79) (1880) pages 250 and 426 (initial 
proposals of provision); 3 Willis & Stockton, supra, at page 1217 (as amended); id., at 
page 1521 (as adopted).   
 
33 
State on more favorable conditions than are prescribed by law to similar corporations 
organized under the laws of this State.”34   
From an early time our cases construing and applying article XII, former section 
15, concluded that the provision had no application to state statutes that regulated the 
“internal affairs” of corporations.  As to those matters, the cases held that, under the 
internal affairs doctrine, a foreign corporation was subject to only the law of its state of 
incorporation.35  In other contexts, cases of that era cited article XII, former section 15 
                                              
34  
There had been no similar provision in the prior state Constitution of 1849.  By 
one contemporaneous account, the provision was inspired by a somewhat similar 
provision of the 1874 Arkansas Constitution.  (Desty, The Constitution of the State of 
California Adopted in 1879, With References to Similar Provisions of the Constitutions 
of Other States (1893) p. 328 [copyright 1879; indicating that the provision was related to 
“Ark. XII, 11”].)   
 
Actually, the Arkansas provision appears to have been considerably broader than 
that enacted by California.  Article XII, section 11 of the Arkansas Constitution, as 
adopted in 1874, read:  “Foreign corporations may be authorized to do business in this 
State, under such limitations and restrictions as may be prescribed by law; Provided:  
That no such corporation shall do any business in this State, except while it maintains 
therein one or more known places of business, and an authorized agent or agents in the 
same, upon whom process may be served; and, as to the contracts made or business done 
in this State, they shall be subject to the same regulations, limitations and liabilities as 
like corporations of this State: and shall exercise no other or greater powers, privileges 
or franchises than may be exercised by like corporations of this State; nor shall they have 
power to condemn or appropriate private property.”  (Italics added.)  Although by the late 
1920s a handful of other jurisdictions had constitutional provisions very similar to 
California‟s, they all postdated article XII, former section 15, and appear to have been 
modeled on it.   
35  
In Miles v. Woodward (1896) 115 Cal. 308, this court held that a statute requiring 
filing and posting of weekly reports was not unconstitutional under article XII, former 
section 15, merely because it imposed its burdens on domestic, and not foreign, 
corporations.  This court wrote that despite the constitutional provision, “[t]he laws of the 
state do not have extraterritorial force.  It would be meaningless for this state to try to 
legislate upon the internal affairs of such foreign corporations, and it has not attempted to 
do so.”  (Miles, at p. 311; accord, Western Union Tel. Co. v. Superior Court (1911) 15 
Cal.App. 679, 694 [the formation, organization, stock, and subscriptions requirements 
 
(footnote continued on next page) 
 
34 
most often in discussing and applying California statutes that, by their terms, applied 
similar restrictions on both domestic and foreign corporations.  For example, a series of 
cases discussed the former constitutional provision when applying a statute imposing a 
“stockholder liability” burden on stockholders of both domestic and foreign 
corporations.36  The court concluded in each case that the statutory burden properly 
applied to stockholders of both types of corporations.37  None of these decisions 
suggested that article XII, former section 15, would by itself render stockholders of 
foreign corporations subject to such a liability burden.   
 
In Conference Free Baptists v. Berkey (1909) 156 Cal. 466 (Berkey), this court 
held that the constitutional provision did not apply in the case of a one-time business 
transaction.  In the course of our analysis we discussed whether article XII, former 
                                                                                                                                                                           
(footnote continued from previous page) 
 
governing domestic corporations are not, by virtue of art. XII, former § 15, applicable to 
foreign corporations — and this does not amount to allowing foreign corporations to 
transact business on terms more favorable than domestic corporations]; see also Southern 
Sierras Power Co. v. Railroad Commission of California (1928) 205 Cal. 479 
[reaffirming a robust application of the internal affairs doctrine without even mentioning 
art. XII, former § 15].)   
36  
See Civil Code former section 322 (“Each stockholder of a corporation is 
individually and personally liable for such proportion of all its debts and liabilities 
contracted or incurred during the time he was a stockholder as the amount of stock or 
shares owed by him bears to the whole of the subscribed capital stock or shares of the 
corporation.”).  Such statutory liability was compelled by the 1879 California 
Constitution‟s article XII.  This constitutional underpinning was among the matters 
repealed by the constitutional amendment of 1930 (see ante, fn. 25; Sterling, supra, 12 
Wisc. L.Rev. 453, 456-457), and the statute itself was repealed in Statutes 1931, chapter 
257, section 1, page 444.   
37  
See Pinney v. Nelson (1901) 183 U.S. 144; Peck v. Noee (1908) 154 Cal. 351; 
Thomas v. Wentworth Hotel Co. (1910) 158 Cal. 275; Provident Gold Mining Co. v. 
Haynes (1916) 173 Cal. 44.   
 
35 
section 15, in addition to barring the Legislature from enacting statutes that granted 
foreign corporations benefits or privileges not afforded to domestic corporations, also 
was “ „self-executing‟ ” in the sense that it automatically imposed on foreign corporations 
general statutory burdens that were imposed on domestic corporations.38  We stated in 
dictum that whether the provision was self-executing in this sense was “a question which 
may be open to doubt.”  (Berkey, supra, at p. 468.)  In this regard we cited cases strongly 
supporting such doubt by finding the corresponding provision of the Montana 
Constitution did not automatically impose on foreign corporations the same burdens 
imposed by statute on domestic corporations.39  This prompted a leading commentator to 
                                              
38  
The court in Berkey recognized that the provision was “ „self-executing‟ ” in the 
first sense described above:  Without need for any implementing legislation, the 
provision prohibited “the passing of laws affirmatively giving superior privileges to 
foreign corporations.”  (Berkey, supra, 156 Cal. at p. 468.)  If the Legislature had enacted 
such a statute, the statute would have been unconstitutional under article XII, former 
section 15, because of the constitutional provision itself and would have been struck 
down by a court if challenged.  No statute was needed to implement the constitutional 
prohibition in this respect.   
39  
In Uihlein v. Caplice Commercial Co. (Mont. 1909) 102 P. 564, the Montana 
Supreme Court, construing that state‟s somewhat similar counterpart to our article XII, 
former section 15, concluded that the Montana provision was “[p]rimarily . . . addressed 
to the legislative assembly” and “was intended to prohibit the passage of laws giving to 
foreign corporations the right to exercise or enjoy any greater privileges than those 
possessed or enjoyed by domestic corporations,” not “to bring foreign corporations 
within the provisions of a law intended to apply solely to domestic corporations.”  
(Uihlein v. Caplice Commercial Co., supra, at p. 568.)  Similarly, in First Nat’l Bank v. 
Weidenbeck (8th Cir. 1899) 97 F. 896, the court rejected an argument that the Montana 
constitutional provision required foreign corporations to comply with all forum state rules 
applicable to its domestic corporations, stating that such a result would be “untenable” 
and hence “[i]t is never done”: “in the very nature of things, it is impossible to provide 
exactly the same system of laws for foreign as for domestic corporations.”  (Id., at 
p. 900.)  Instead, the court held, the constitutional provision is simply “an inhibition 
against the grant of powers and privileges to foreign corporations that are not granted to, 
or cannot be enjoyed by, domestic corporations under like conditions.”  (Ibid.)   
 
36 
say that our decision in Berkey “intimated, but [did] not decide[], . . . that this provision 
of the constitution is not self-executing . . . .”  (Clarke, Cal. Corporation Law (1916) 
ch. XXXIV, pp. 608-609.)   
Based on this history, we disagree with the implicit assumption of the majority in 
North American II that in 1929, when the survival statute was enacted, the general 
understanding was that article XII, former section 15, meant that all statutory burdens 
imposed on domestic corporations also would apply to foreign corporations — even if the 
particular statute did not specify that it would apply to foreign as well as domestic 
corporations.  Berkey, supra, 156 Cal. 466, decided in 1909, demonstrates that it was not 
at all clear in 1929 that the former constitutional provision had the effect attributed to it in 
1986 by the appellate court in North American II.  Accordingly, even if we apply the 
doctrine that ambiguous statutory provisions should be interpreted to avoid constitutional 
problems, we cannot endorse the implicit conclusion of the court in North American II 
that such an interpretation of the 1929 survival statute was or is required.40  In view of 
the language of the current statutory provisions and the deliberate changes made to them 
throughout the years, as well as the legislative and constitutional background against 
which the predecessor of section 2010 was enacted, we conclude that the survival statute 
should properly be interpreted to apply to domestic corporations only.   
D.  Dicta in our cases 
Against this conclusion plaintiffs highlight dicta in two of our decisions — 
Penasquitos, supra, 53 Cal.3d 1180, and McCann v. Foster Wheeler LLC (2010) 48 
                                              
40  
Having concluded that the court in North American II misinterpreted the meaning 
and effect of article XII, former section 15, we need not address the circumstances 
surrounding the repeal of former constitutional provision in 1972.  Because that former 
provision is not a proper basis for interpreting the former or current versions of the 
survival statute as applying to both domestic and foreign corporations, that former 
provision is not relevant to the issue before us — and its repeal is similarly irrelevant.   
 
37 
Cal.4th 68 (McCann) — in which we cited and described the conclusion of North 
American II, supra, 180 Cal.App.3d 902, that the survival statute, section 2010, applies to 
foreign corporations.  Plaintiffs assert that in doing so we tacitly approved the reasoning 
of North American II.   
In Penasquitos, supra, 53 Cal.3d 1180, we held that section 2010 permitted not 
only the continuation of suits against dissolved domestic corporations, but also the 
initiation of suits against dissolved domestic corporations.  In support we cited out-of-
state-cases so construing similar statutes, and we also quoted both prior North American 
decisions for the proposition that under section 2010, “ „there is no time limitation for 
suing a dissolved corporation for injuries arising out of its predisposition activities.‟ ”  
(Penasquitos, supra, at pp. 1187-1188, quoting North American I, supra, 128 Cal.App.3d 
at p. 143, and North American II, supra, 180 Cal.App.3d at p. 904.)  In the course of 
reciting the history of the North American II litigation, we mentioned in passing that the 
appellate court in that latter case had reconsidered its earlier determination that foreign 
corporations were not covered by section 2010, and had concluded instead that they are 
covered by that survival statute.  (Penasquitos, supra, at p. 1188.)  Because, as noted, 
Penasquitos did not concern a foreign corporation, we did not consider, much less 
resolve, whether section 2010 applies to such corporations, and thus the decision does not 
assist plaintiffs.   
McCann, supra, 48 Cal.4th 68, which concerned a suit for asbestos-related injuries 
against an existing (not dissolved) foreign corporation, is similarly unhelpful to plaintiffs.  
In that decision we applied traditional choice-of-law principles; the case had nothing to 
do with, and did not even mention, section 2010, the survival statute.  Applying the 
“comparative impairment” prong of the three-part governmental interest choice-of-law 
test (see ante, fn. 5) on the facts presented in McCann — involving conduct occurring 
outside California, and a foreign law that limited liability for such conduct engaged in by 
the defendant within the foreign state‟s territory — we concluded that the interest of the 
 
38 
foreign jurisdiction in enforcing its own liability-limiting law was paramount, and the 
interest of California in enforcing its own law was properly subordinated.  (McCann, 
supra, at p. 101.)  In reaching this determination, we stressed that on different facts — as 
when a defendant “is responsible for exposing persons to the risks associated with 
asbestos or another toxic substance through its conduct in California,” the conclusion 
under the comparative impairment inquiry would likely be different, and “would allocate 
to California the predominant interest in regulating the conduct.”  (Ibid.)  In support, we 
cited, as an example, North American II, supra, 180 Cal.App.3d at pages 907-908, and 
described that decision in a parenthetical as “holding California law applicable when the 
plaintiff was exposed to asbestos in California by a company incorporated in another 
state, where plaintiff‟s action against the company would have been barred as untimely 
under the other state‟s law.”  (McCann, supra, at p. 101.)  Clearly, the import of our 
citation to North American II was to its choice-of-law analysis, which we implicitly 
approved on its own terms; but we did not consider the issue we face today, whether a 
foreign corporation is subject to our state‟s survival statute.  Again, this dictum — 
especially when viewed in light of the extensive history discussed ante, part II.C.3. — 
does not assist plaintiffs.   
E.  Policy considerations  
Plaintiffs highlight defendant‟s history of transacting business in California from 
the 1930s through the 1980s, when it surrendered its certificate of qualification.  They 
assert that defendant, having been dormant for nearly two decades, strategically filed for 
dissolution in Delaware in 2005 in order to cut off its continuing liability (and recovery 
of damages through applicable “undistributed . . . insurance assets” — see § 2011, subd. 
(a)(1)(A)) to asbestos victims.  Plaintiffs argue that this course of conduct “directly 
contravenes California policy.  When foreign corporations seek and accept the benefits of 
transacting business here, California law should not allow them to use their home state‟s 
corporate-friendly laws to deprive California citizens of their remedies.”  (Italics added.)   
 
39 
The policy question concerning whether the provisions of California‟s survival 
statute should apply to foreign as well as domestic corporations is properly a matter to be 
determined by the Legislature, not this court.  Because the Legislature has left the holding 
of North American II, supra, 180 Cal.App.3d 902, untouched since 1986, it might be 
argued that section 2010 reflects the Legislature‟s acquiescence concerning what 
California law should provide.  But as explained above, the history and language of the 
statutes simply do not support the proposition that section 2010, at its inception or today, 
governed or governs foreign in addition to domestic corporations.   
III.  Conclusion 
We conclude that California‟s survival statute, section 2010, does not apply to 
foreign corporations, and we disapprove North American II, supra, 180 Cal.App.3d 902, 
to the extent it held otherwise.  Having reached this decision, we need not perform a 
choice-of-law comparative-impairment analysis in order to determine which state‟s law 
should apply.  (See ante, fn. 5.)   
The judgment of the Court of Appeal is affirmed.   
 
 
 
 
 
 
 
 
CANTIL-SAKAUYE, C. J.  
 
 
WE CONCUR: 
 
KENNARD, J. 
BAXTER, J. 
WERDEGAR, J. 
CHIN, J. 
CORRIGAN, J. 
LIU, J.
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Greb v. Diamond International Corporation 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 184 Cal.App.4th 15 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S183365 
Date Filed: February 21, 2013 
__________________________________________________________________________________ 
 
Court: Superior 
County: San Francisco 
Judge: Peter J. Busch 
 
__________________________________________________________________________________ 
 
Counsel: 
 
Law Office of Ted W. Pelletier, Ted W. Pelletier; Clapper, Patti, Schweizer & Mason, Jack K. Clapper, Steven J. 
Patti and Christine A. Renken for Plaintiffs and Appellants. 
 
Murchison & Cumming, Edmund G. Farrell III, Scott L. Hengesbach and Maria A. Starn for Defendant and 
Respondent. 
 
 
 
 
 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Ted W. Pelletier 
Law Office of Ted W. Pelletier 
22 Skyline Road 
San Anselmo, CA  94960 
(415) 454-8783 
 
Edmund G. Farrell III 
Murchison & Cumming 
801 South Grand Avenue, 9th Floor 
Los Angeles, CA  90017 
(213) 623-7400