Court Opinion

ID: 821505
Source: CourtListenerOpinion
Date Created: 2013-02-28 07:22:39.3122+00
Date Added: 2024-06-11T11:57:20.718777
License: Public Domain

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.

                                              1
§ 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.)

                                              2
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.”

                                               3
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.)

                                               4
                        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)

                                               5
       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)

                                               6
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”].)

                                              7
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)

                                              8
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.)

                                              9
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

                                               10
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

                                              11
§ 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)

                                              12
       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)

                                             13
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.)

                                             14
        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

                                              15
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.

                                              16
       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.)

                                              17
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).

                                             18
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).)

                                              19
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)

                                             20
       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.)

                                              21
       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

                                             22
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.

                                              23
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)

                                             24
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.

                                             25
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.

                                             26
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)

                                             27
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)

                                             28
       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)

                                               29
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)

                                              30
       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.

                                             31
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).

                                               32
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)

                                              33
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.

                                             34
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.)

                                             35
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.

                                              36
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

                                              37
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.)

                                             38
       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.

                                             39
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