Court Opinion

ID: 4153916
Source: CourtListenerOpinion
Date Created: 2017-03-20 14:08:07.214367+00
Date Added: 2024-06-11T14:34:19.573902
License: Public Domain

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SJC-12101

         FRED CHITWOOD   vs.   VERTEX PHARMACEUTICALS, INC.

         Suffolk.      November 9, 2016. - March 20, 2017.

 Present:   Gants, C.J., Botsford, Lenk, Hines, Gaziano, Lowy, &
                            Budd, JJ.1

    Corporation, Stockholder, Custodian of corporate records.

     Civil action commenced in the Superior Court Department on
August 15, 2013.

     The case was heard by Janet L. Sanders, J.

     The Supreme Judicial Court on its own initiative
transferred the case from the Appeals Court.

     Steven J. Purcell, of New York (Justin Sherman, of New
York, & Mitchell J. Matorin also present) for the plaintiff.
     R. Todd Cronan (William B. Brady also present) for the
defendant.
     Ben Robbins & Martin J. Newhouse, for New England Legal
Foundation, amicus curiae, submitted a brief.

     GANTS, C.J.    Under G. L. c. 156D, § 16.02 (b), of the

Massachusetts Business Corporation Act (act), a shareholder of a

     1
       Justice Botsford participated in the deliberation on this
case prior to her retirement.
                                                                   2

corporation, upon written notice, is entitled to inspect and

copy various categories of corporate records if the shareholder

makes the demand "in good faith and for a proper purpose," and

if the particular records sought to be inspected are "directly

connected" with that purpose.    The plaintiff, Fred Chitwood, a

shareholder of the defendant Vertex Pharmaceuticals, Inc.

(Vertex or the corporation), made a demand for corporate records

pursuant to § 16.02 (b), claiming that inspection of the records

was needed to investigate his allegation that the board of

directors had committed a breach of its fiduciary duty of

oversight with regard to Vertex's financial reporting and

insider stock sales.   Vertex "rejected" the demand, claiming

that the demand was "invalid under Massachusetts law" and that

it was improper because the board, following a reasonable

inquiry by a special committee of independent directors, had

rejected his earlier demand to commence derivative litigation

based on the same allegations of misconduct.     The plaintiff

commenced an action in the Superior Court, seeking an order

compelling Vertex to make the requested corporate records

available to the plaintiff.     After a bench trial, the judge

dismissed the complaint with prejudice, concluding that the

plaintiff had failed to meet his burden of showing a proper

purpose.
                                                                     3

     The issue on appeal is whether the judge applied the

correct standard regarding the proper purpose required to

inspect corporate records under § 16.02 (b).    We conclude that

she did not.   Because the judge applied too demanding a standard

and because the scope of the demand made by the shareholder far

exceeded the authorized scope of inspection under § 16.02 (b),

we vacate the judgment dismissing the shareholder's claim for

inspection and remand the case for further proceedings

consistent with this opinion.2

     The right of inspection.    Under § 16.02, a shareholder of a

Massachusetts corporation is entitled to inspect two categories

of corporate records.   The first category of records, delineated

in G. L. c. 156D, § 16.01 (e), includes the corporation's

articles of organization and bylaws (and all amendments

thereto); resolutions adopted by the board of directors creating

one or more classes of shares, and setting the rights,

preferences, and limitations of those classes of shares (where

the shares issued are outstanding); the minutes of all

shareholders' meetings, as well as the records of all actions

taken by shareholders without a meeting, for the past three

years; all written communications to shareholders within the

past three years, including the annual financial statements

     2
       We acknowledge the amicus brief submitted by the New
England Legal Foundation.
                                                                   4

provided to shareholders, for the past three years; the names

and business addresses of the corporation's current directors

and officers; and the corporation's most recent annual report

delivered to the Secretary of State.    To inspect the corporate

records in this first category, a shareholder need only provide

written notice at least five business days before the

shareholder wishes to inspect and copy; no showing of good faith

or proper purpose is required.   G. L. c. 156D, § 16.02 (a).

     The second category of records, delineated in G. L.

c. 156D, § 16.02 (b), includes records of "excerpts from minutes

reflecting action taken" by the board of directors or a

committee acting in place of the board;3 the "accounting records

of the corporation, but if the financial statements of the

corporation are audited by a certified public accountant,

inspection shall be limited to the financial statements and the

supporting schedules reasonably necessary to verify any line

item on those statements;" and the list of the names and

addresses of all corporate shareholders, showing the number and

class of shares held by each.    See G. L. c. 156D, § 16.01 (c).

     3
       The full text of G. L. c. 156D, § 16.02 (b) (1), provides
for the inspection and copying of "excerpts from minutes
reflecting action taken at any meeting of the board of
directors, records of any action of a committee of the board of
directors while acting in place of the board of directors on
behalf of the corporation, minutes of any meeting of the
shareholders, and records of action taken by the shareholders or
board of directors without a meeting, to the extent not subject
to inspection under [§ 16.02 (a)]."
                                                                      5

To inspect this second category of corporate records a

shareholder not only must provide five days' written notice but

also must meet the following three requirements:    (1) the

shareholder must show that the "demand is made in good faith and

for a proper purpose," (2) the shareholder must describe "with

reasonable particularity his purpose and the records he desires

to inspect," and (3) the shareholder must show that "the records

are directly connected with his purpose."     G. L. c. 156D,

§ 16.02 (c).    In interpreting the meaning of these requirements,

we are guided by the comments prepared by the task force on the

revision of the Massachusetts business corporation law that

drafted the act, "which included more than fifty experienced

Massachusetts corporate lawyers."    See Halebian v. Berv, 457

Mass. 620, 625 (2010), citing comment to G. L. c. 156D, 25 Mass.

Gen. Laws Ann. at 48 (West Supp. 2010).

    "A 'proper purpose' means a purpose that is reasonably

relevant to the demanding shareholder's interest as a

shareholder."   Comment to G. L. c. 156D, 25A Mass. Gen. Laws

Ann. at 46 (West Supp. 2016) (comment).     The drafters also noted

that the phrase "proper purpose" is "well understood" and that

the "very substantial case law defining 'proper purpose' will

continue to be applicable."    Id.   That case law recognizes that

"[s]tockholders are the beneficial owners of all the assets of

the corporation, and they are entitled to reliable information
                                                                    6

as to the financial condition of the corporation, the manner in

which business has been conducted and its affairs have been

managed, and whether those to whom they have entrusted their

property have acted faithfully and efficiently in the interests

of the corporation."   Albee v. Lamson & Hubbard Corp., 320 Mass.

421, 424 (1946).   A proper purpose is one that protects the

shareholder's rights as an owner in the corporation and that

advances the interests of the corporation itself.    Id.    A

shareholder's purpose is improper where it is driven by "mere

curiosity," speculation, or vexatious motives (citation

omitted).   Gavin v. Purdy, 335 Mass. 236, 239 (1957).     See

Albee, supra (shareholder has no "right to an examination if his

purpose be to satisfy his curiosity, to annoy or harass the

corporation, or to accomplish some object hostile to the

corporation or detrimental to its interests").

    "Good faith," paired as it is with "proper purpose," means

that the stated proper purpose also must be the shareholder's

true purpose.   See Gavin, 335 Mass. at 239 (shareholder must act

with "an honest purpose, not adverse to the interests of the

corporation"); Albee, 320 Mass. at 424 (stockholder "who is

acting in good faith" for proper purpose "is generally entitled

to examine the corporate records and accounts").    This

understanding of the meaning of good faith is supported by the

Uniform Commercial Code's definition of "good faith," which
                                                                   7

requires "honesty in fact and the observance of reasonable

commercial standards of fair dealing."   G. L. c. 106, § 1-201

(20).

     The other requirements -- that the shareholder state his or

her purpose and the records sought with reasonable

particularity, and that the records sought be connected with

that purpose -- allow a fact finder to test whether the

shareholder's true purpose is a proper purpose.   See comment,

supra at 46 (eliciting "more meaningful statements of purpose"

avoids "harassment under the guise of inspection").   Where the

specific records sought have no relevant connection to the

shareholder's stated purpose, a fact finder may infer that the

stated purpose for inspection is not the true purpose, and that

inspection of those records is sought for another purpose that

the shareholder chose not to articulate because it would likely

be found improper.4

     Where a shareholder makes a demand in good faith and for a

proper purpose, stated with reasonable particularity, for

records that are relevant to that purpose, the corporation must

allow the inspection unless it can show that it has "determined

in good faith that disclosure of the records sought would

     4
       The drafters note that, where a corporation disputes the
"connection" or relevancy of the requested records, a judge may
review the records in camera before determining the validity of
the claim. Comment to G. L. c. 156D, § 16.02, 25A Mass. Gen.
Laws Ann. at 46 (West Supp. 2016).
                                                                   8

adversely affect the corporation in the conduct of its business

or, in the case of a public corporation, constitute material

non-public information at the time when the shareholder's notice

of demand to inspect and copy is received by the corporation."

G. L. c. 156D, § 16.02 (c) (4).    Where the corporation for any

reason does not allow the inspection and copying of the

requested records within a reasonable time, the shareholder may

apply to the Superior Court for an order to permit inspection

and copying, and that application shall be adjudicated "on an

expedited basis."    G. L. c. 156D, § 16.04 (b).

    The right of inspection under § 16.02 is "an independent

right of inspection"; it is not intended to substitute for or

diminish any rights of inspection that may exist under another

statute, the common law, or the right of discovery in

shareholder litigation.    See G. L. c. 156D, § 16.02 (e);

comment, supra at 46.

    Background.     We turn now to the complaint under § 16.04 (b)

that initiated this litigation.    According to that complaint,

the defendant corporation develops and manufactures drugs for

the treatment of serious diseases.   In the spring of 2012, the

corporation announced in a press release the interim results of

"phase two" of a study regarding the effectiveness of two of its

drugs to treat cystic fibrosis.   As a result of that

announcement, which suggested a medical breakthrough, the
                                                                   9

corporation's stock price "rose precipitously."    Three weeks

later, the corporation issued a new press release, which

suggested that the phase two study did not reflect a medical

breakthrough, and the corporation's stock price declined on this

news.   Between the first and the second announcement, seven of

the corporation's officers and directors sold over $37 million

in corporation stock.

    In November, 2012, the plaintiff5 sent a letter to the

corporation's board of directors detailing what he characterized

as the "false and misleading statements" in the first

announcement and identifying the officers and directors he

contended had wrongfully engaged in insider trading prior to the

second announcement.    He demanded that the board initiate

litigation on behalf of the corporation against the parties

responsible for issuing the false and misleading statements,

require the insiders who profited from the insider trading to

disgorge the profits, and that the board institute meaningful

corporate reforms.

    In response, the board established a special committee of

independent directors to investigate the plaintiff's

allegations, and retained outside counsel to assist in the

    5
       The plaintiff became the interested shareholder and
replaced the person identified in the November, 2012, letter to
the corporation's board of directors after it became clear that
the individual identified in the November letter was not in fact
a shareholder at the time of the relevant events.
                                                                   10

investigation.   In April, 2013, the board informed the plaintiff

by letter that the special committee had completed its

investigation and reported its findings to the board, and that a

majority of the independent directors had determined that there

was no breach of fiduciary duty by any officer or director of

the corporation and that a shareholder derivative action was not

in the best interests of the corporation.   The letter briefly

described the conduct of the investigation and provided a

summary of its principal findings, but did not append the

written report provided by the special committee to the board.

    On June 19, 2013, the plaintiff shareholder made a written

demand under § 16.02 to inspect the corporation's books and

records "to investigate potential wrongdoing, mismanagement, and

breaches of fiduciary duties by the members of the [b]oard or

others in connection with the events, circumstances, and

transactions" described earlier.   The shareholder asserted that

he did not believe the corporation's investigation "properly or

adequately responded to the concerns expressed" in the November,

2012, letter demanding the initiation of shareholder derivative

litigation.   The shareholder demanded the inspection and copying

of seven categories of records, including the records and

minutes of all meetings of the board and the special committee

regarding these issues, the special committee's final report and

any drafts of the report, all documents distributed at any
                                                                  11

meeting of the board or the special committee, all documents

concerning the results of the internal review of the phase two

study, copies of all policy and procedure manuals and other

documents describing the corporation's internal control

practices regarding the selection and oversight of contractors

to perform drug trials and studies for the corporation, and

calendars to show the number and duration of meetings of the

board and the special committee.

    On June 26, the board, through counsel, rejected the June

19 demand for inspection and identified four reasons for the

rejection.   First, the board contended that the demand was not

made for a "proper purpose" because the shareholder sought the

inspection of the corporation's books and records under § 16.02

for the purpose of investigating potential wrongdoing but had

failed to present any credible basis to infer that that were

legitimate issues that warranted further investigation.

    Second, the board contended that the demand lacked a

"proper purpose" because it essentially sought discovery in

support of the shareholder's derivative demand allegations that

the shareholder would be barred from obtaining had he brought a

shareholder derivative action under G. L. c. 156D, § 7.44.     The

board noted that § 7.44 provides that a derivative action

commenced after rejection of a demand shall be dismissed on

motion of the corporation where a judge finds that a majority of
                                                                  12

the independent directors present at a meeting of the board of

directors (where the independent directors constitute a quorum)

had determined in good faith after conducting a reasonable

inquiry that a derivative action would not be in the best

interests of the corporation.     The board also noted that a court

may stay discovery in a derivative proceeding while the

corporation's motion to dismiss is pending.     See G. L. c. 156D,

§ 7.43.

    Third, the board claimed that the demand was "overbroad and

far exceeds the narrow scope of records available for

inspection" under § 16.02.

    Fourth, the board claimed that it had made a good faith

determination that disclosure of the records sought would

adversely affect the corporation in the conduct of its business,

and that the requests call for the disclosure of non-public

material information.

    On August 15, 2013, the shareholder filed suit under G. L.

c. 156D, § 16.04, seeking an order compelling the corporation to

allow the inspection and copying of the books and records he had

demanded in his June 19 letter.    The shareholder's complaint,

which, under § 16.04 (b), was to be resolved on an "expedited

basis," was not resolved for nearly two years when, on August 4,

2015, final judgment entered dismissing the complaint with

prejudice.   During those two years, cross motions for judgment
                                                                    13

on the pleadings were denied, as was the corporation's motion

for summary judgment, and evidence was taken during a one-day

bench trial where the plaintiff shareholder and a board member

of the corporation, who also served as chair of its audit

committee, testified.

    In her findings of fact and conclusions of law, the trial

judge recognized that the plaintiff shareholder's demand was

overbroad and that, if he prevailed, his right to inspect

corporate records under § 16.02 (b) would be limited to

"excerpts from minutes reflecting any action taken at any

meeting of the board of directors [and] records of any action

of" the special committee.   The judge concluded that the

plaintiff was not entitled to inspect even this narrow swath of

records because he had failed to meet his burden of showing a

proper purpose.   The judge noted that the chronology of events

regarding the sale of stock by corporate insiders after "the

admittedly erroneous May 7 press release" and before the "May 29

correction" had prompted a United States Senator to ask the

Securities and Exchange Commission to examine the matter.     But

the judge declared that, where a shareholder seeks to inspect

corporate records under § 16.02 (b) to investigate allegations

of corporate wrongdoing and mismanagement, the shareholder "must

present some evidence of wrongdoing; simply relying on the

timing of certain events is not sufficient" (emphasis in
                                                                   14

original).6   The judge found that the shareholder had offered no

evidence "calling into question the independence of the

[s]pecial [c]ommittee or the diligence of its efforts."

     The judge found additional support for her conclusion that

the plaintiff is not entitled to inspection of the records under

§ 16.02 because she concluded that, if the shareholder were to

bring a derivative suit under G. L. c. 156D, § 7.44, based on

the evidence he presented at trial, he would not be entitled to

any discovery.   The judge noted that a corporation in a

derivative action is entitled to dismissal if a majority of the

independent directors present at a board of directors meeting

(where the independent directors constitute a quorum) determine

"in good faith after conducting a reasonable inquiry upon which

its conclusions are based that the maintenance of the derivative

proceeding is not in the best interests of the corporation."

§ 7.44 (a).   The judge also noted that, if the corporation were

to move to dismiss a derivative action, all discovery would be

stayed pending resolution of the motion unless the judge, on

     6
       The judge found guidance in a Massachusetts Superior Court
decision which declared that "a purpose to investigate possible
waste, mismanagement or other wrongdoing is a proper purpose
under [the Delaware inspection statute, [Del. Code Ann. tit. 8,
§ 220 (LexisNexis 2011)], provided that the shareholder presents
some evidence that establishes a credible basis from which a
court can infer the existence of legitimate issues as to such
conduct warranting further investigation." Gent vs. Teradyne,
Inc., Superior Court, No. 07-04676-BLS2 (Oct. 8, 2010), citing
Seinfeld v. Verizon Communications, Inc., 909 A.2d 117, 118, 122
(Del. 2006).
                                                                  15

good cause shown, ordered that specified discovery be conducted.

§ 7.44 (d).   In the absence of good cause, discovery would

proceed only if the motion to dismiss were denied, and the

motion would be denied only where the shareholder had alleged

"with particularity" facts that rebutted the facts presented by

the corporation showing that a majority of the board of

directors was independent when the independent directors decided

not to proceed with the derivative action and that their

determination was made in good faith after conducting a

reasonable inquiry.   Id.   The judge concluded that allowing

inspection under § 16.02 would render those limitations on

discovery "meaningless."

    Discussion.    Viewed from the perspective of the appellate

bench, this was an expensive litigation war of attrition that

was fought over nearly nothing.    The seven categories of records

that the shareholder demanded under § 16.02 far exceed the scope

of records that are within the right of inspection under

§ 16.02.   They are precisely the type of records that a

plaintiff shareholder might seek in discovery in a derivative

action in an attempt to show that the special committee's

inquiry into the allegations was not reasonable or that the

independent directors did not act in good faith.   But, as the

judge found, within these seven categories of records, the only

records within the scope of the right of inspection under
                                                                   16

§ 16.02 were the excerpts of minutes or comparable records that

reflected the actions taken at meetings of the board of

directors or meetings of the special committee.    The drafters'

comments make clear that they intended "to permit inspection of

votes or action taken on relevant matters, not of reports,

discussion or decisions not to act on a matter."   Comment, supra

at 45.   The drafters added, "Shareholders may have a legitimate

interest in reviewing whether action was properly taken by the

board of directors, but giving them a statutory right to examine

the remainder of the minutes of a board or committee meeting

could inhibit frank discussion or the disclosure of sensitive

matters to the directors to enable them to exercise their

fiduciary responsibilities."   Id.   In short, under § 16.02, a

shareholder is entitled to inspect the original minutes of a

board or committee meeting only to learn what action was taken

at those meetings; it does not provide a right of inspection of

the documents that were provided to board members for

consideration of that proposed action or of the minutes

memorializing the debate at the board or committee meeting as to

whether to take that action.

    Where, as here, a shareholder demands that the corporation

initiate a derivative action based on allegations of insider

trading after an inaccurate public announcement of the results

of drug testing that suggested an apparent scientific
                                                                   17

breakthrough, and where the corporation declines to do so, a

shareholder has a proper purpose in asking to inspect the

excerpts of the original minutes of the meetings of the board of

directors and the special committee that reflect the actions

taken at those meetings regarding the requested derivative

action.7   The minutes may well say nothing different regarding

these actions from what the corporation's attorney described in

the letter informing the shareholder of the corporate decision

to decline to proceed with the derivative action, but the

shareholder is entitled, as the Russian proverb says, to "trust

but verify."8   The shareholder need not, as the judge ruled,

provide evidence of wrongdoing beyond the timing of the press

releases and the insider trades to obtain these excerpts of the

original minutes.   The desire to verify the action taken by the

special committee and the board in response to these allegations

is a purpose that is "reasonably relevant to the demanding

shareholder's interest as a shareholder."   See comment, supra at

46.

      7
       The mere fact that the plaintiff's request was indeed
overbroad does not alone establish an absence of good faith.
      8
       The Russian proverb "trust, but verify" became famous in
the United States when former President Ronald W. Reagan quoted
it with respect to his nuclear disarmament discussions with the
Soviet government. See e.g., The Signing: 'Universal
Significance for Mankind,' N.Y. Times, Dec. 9, 1987, at A21.
                                                                  18

    The judge erred in applying a standard derived from

Delaware law in determining whether the shareholder had a proper

purpose.   In Delaware, as in Massachusetts, a shareholder's

desire to investigate corporate wrongdoing or mismanagement is a

proper purpose.   See Seinfeld v. Verizon Communications, Inc.,

909 A.2d 117, 121 (Del. 2006); Varney v. Baker, 194 Mass. 239,

240-241 (1907).   But the scope of corporate records that

potentially may be inspected to conduct such an investigation

under the Delaware counterpart of § 16.02 is far greater than

under § 16.02, because the Delaware statute permits inspection

of a corporation's "books and records," without specifying which

books and records.   See Del. Code Ann. tit. 8, § 220(b)(1)

(LexisNexis 2011).   Under Delaware law, a shareholder may

identify the category of corporate records he or she seeks to

inspect, and the scope of inspection is left to the sound

discretion of the judge.   See Del. Code Ann. tit. 8, § 220(c)(3)

("The Court may, in its discretion, prescribe any limitations or

conditions with reference to the inspection, or award such other

or further relief as the Court may deem just and proper");

United Techs. Corp. v. Treppel, 109 A.3d 553, 557-558 (Del.

2014) (court has broad discretion to determine scope of

inspection and use of information gathered); Security First

Corp. v. U.S. Die Casting & Dev. Co., 687 A.2d 563, 569 (Del.
                                                                     19

1997) (judge "has wide latitude in determining the proper scope

of inspection").

       In Seinfeld, supra at 118-119, the shareholder alleged that

three corporate executives were paid more than authorized in

their employment contracts, and the shareholder sought to

inspect the corporate books and records related to their

compensation.     Where an inspection's purpose is to investigate

possible corporate wrongdoing or mismanagement, the Delaware

Supreme Court requires the shareholder to show, "by a

preponderance of the evidence, a credible basis from which the

[court] can infer there is possible mismanagement that would

warrant further investigation."     Id. at 123.   "That 'threshold

may be satisfied by a credible showing, through documents,

logic, testimony or otherwise, that there are legitimate issues

of wrongdoing."    Id., quoting Security First Corp., 687 A.2d at

568.

       This burden is modest but it is more demanding than is

appropriate for the more limited scope of books and records

subject to inspection under § 16.02.     The inverse of the

Biblical adage that to whom much is given, much is expected is

that to whom less is given, less is expected.      See Luke 12:48

(Revised Standard Version).     The corporate records sought in

Seinfeld might be outside the scope of inspection in

Massachusetts under § 16.02, as might many investigative
                                                                   20

requests for corporate books and records that may be permissible

under Delaware law.    Where a shareholder seeks corporate books

and records under § 16.02 and claims a proper purpose of

investigating corporate wrongdoing or mismanagement, the

shareholder demonstrates a proper purpose where he or she

identifies particular facts or circumstances that permit a

reasonable inference that the requested books and records could

possibly reveal information that would tend to indicate the

existence of corporate wrongdoing or mismanagement.    Such a

showing, if made in good faith, suffices to show that the

shareholder's purpose is not driven by "mere curiosity" or

speculation.   See Gavin, 335 Mass. at 239.

    The judge also erred in concluding that, where a

shareholder's derivative demand has been declined by the

corporation, the shareholder, to show a proper purpose, must

present some evidence that the majority of the board of

directors who voted to decline were not independent or that

their determination was not made in good faith or that the

inquiry on which they based they determination was not

reasonable.    Essentially, the judge imposed a burden on the

shareholder seeking to inspect corporate books and records under

§ 16.02 that was comparable to the burden placed on a plaintiff

shareholder under § 7.44 (d) to defeat a motion to dismiss

brought by the corporation that had declined the plaintiff's
                                                                  21

derivative demand.9   Section 16.02, however, provides "an

independent right of inspection," and its drafters made clear in

their comments that the right of inspection under § 16.02 is

available "at any time."   Comment, supra at 45, 46.   A demand

for inspection under § 16.02 may be made before or after the

filing of a shareholder derivative action, and the definition of

"proper purpose" is not altered by its timing.   Indeed, a

shareholder has a right of inspection under § 16.02 even if the

shareholder derivative action he or she sought to initiate has

been dismissed.   To be sure, the dismissal of a related

shareholder derivative action may be relevant in determining

whether the demand for inspection under § 16.02 is made in good

faith or to harass the corporation, but the right of inspection

under § 16.02 is not restricted by the limits of discovery under

§ 7.44 (d).10

     9
       We understand why the judge believed that the allowance of
inspection of the plaintiff shareholder's overbroad request for
books and records would have frustrated the limitations of
discovery under § 7.44, because the vast majority of those
documents are outside the scope of § 16.02 and would be
available only through civil discovery in a shareholder
derivative suit. But the appropriate course of action is to
isolate which of the documents in the inspection request fall
within the scope of § 16.02, and then determine whether there is
a proper purpose to order inspection of that subset of
documents.
     10
       Because the shareholder here did not assert a common-law
right to inspect corporate books and records, we do not address
whether the common-law right of inspection survives after the
enactment of G. L. c. 156D, §§ 16.01 and 16.02, or, if it does
                                                                  22

    Conclusion.   The judgment of dismissal is vacated, and the

case is remanded to the Superior Court for further proceedings

consistent with this decision.

                                   So ordered.

survive, whether it provides a shareholder with a greater right
of inspection than provided under these statutes.