Wilson

The question presented by this appeal, one of first impression and considerable significance, is whether the State of California may constitutionally impose its law requiring cumulative voting by shareholders upon a corporation which is domiciled elsewhere, but whose contacts with California, as measured by various criteria, are greater than those with any other jurisdiction.

Section 2115 of the California Corporations Code provides for the application of various provisions of that code to a foreign corporation which (on the basis of a three-factor formula including property, payroll and sales) does a ma jority of its business in this state, where in addition a majority of its outstanding voting securities are held of record by persons having addresses in this state. Among the provisions are subdivisions (a), (b) and (c) of section 708, which provide for cumulative voting.

Plaintiff Ross A. Wilson brought this action against Louisiana-Pacific Resources, Inc., a Utah corporation, seeking a declaratory judgment that the defendant met the tests of section 2115, and that he was therefore entitled to cumulative voting in accordance with section 708. The trial court found…