Batchelder v. Kawamoto Appellees' Brief - Greines, Martin, Stein ...

Who can sue? Can plaintiff, as the holder of ADRs rather than shares of
Honda Japan stock, i.e., of a contract right rather than an interest in securities,
bring any kind of derivative lawsuit against anyone? The trial court correctly
ruled that under Japanese law, as established in the trial court by the
uncontroverted testimony of Japanese law scholars, the answer is plainly "no."
Japanese law permits only a shareholder to bring a derivative action, and
Plaintiff holds ADRs .
In the face of a consensus of expert opinion on Japanese law,
plaintiff is forced to argue that California law governs this question. The trial
court correctly rejected this argument, because a proper choice-of-law analysis
compels the conclusion that Japanese law applies and precludes this litigation.
Whom can the plaintiff sue? Japanese law strictly limits the field of
potential defendants in a derivative suit to only the directors, auditors,
liquidators and promoters of the corporation in which the plaintzfl owns shares.
The trial court properly recognized that apart from restricting the right to sue
derivatively to shareholders and not permitting double derivative suits, Japanese
law also would not permit a suit against the former employees, directors and
agents of American Honda.
Although plaintiff argues that California law governs because he
seeks to assert California law claims on behalf of American Honda, the
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