Opinion ID: 1567838
Heading Depth: 1
Heading Rank: 3

Heading: The Public Policy of the State of New Jersey as Embodied in R.S. 14:3-15, N.J.S.A.

Text: It is clear that R.S. 14:3-15 embodies an important public policy of the State of New Jersey and represents an exercise of the police power of that State. The Legislature of New Jersey by enacting the statute intended to prevent losses to both foreign and domestic corporations and their stockholders by strike suits. This view was expressed by Governor Walter E. Edge when he approved the Act. [4] He pointed out that the statute's purpose was to deter the filing of irresponsible suits by persons who either have no legitimate cause of action or who institute such action more for the personal gain of a settlement out of court than in the interest of the corporation or its stockholders. These suits involving the highly complicated transactions of modern corporate business are very costly to defend, regardless of whether or not they may be justifiable. For this reason they have been the subject of great abuse and have been used to harass corporate officers and directors with baseless litigation.    It is a minimum protection for corporations and their officers and directors, against `strike suits'   . A statement similar in tenor was attached to Assembly Bill No. 242, which became the Act under consideration, introduced by Assemblyman W. H. Jones in the House of Assembly on March 16, 1945. Governor Thomas E. Dewey of New York made a substantially similar statement with regard to the New York Act, now Section 61-b of the General Corporation Law of New York, Consol.Laws, c. 23. Governor Dewey said,    many suits that were well based have been brought, not in the interest of the corporation or of its stockholders, but in order to obtain money for particular individuals who had no interest in the corporation or in its stockholders. Secret settlements  really payoffs for silence  have been the subjects of common suspicion. [5] The New York statute is almost identical with that of New Jersey. See as cited in note 17 infra.