Lehman

This original proceeding raises the question of whether the statute of limitations for a liability “created by law” (Code Civ. Proc., § 359 (section 359)) applies to a claim alleging a breach of fiduciary duty by the directors of a corporation.

We conclude that section 359 governs a fiduciary duty claim where the basis of the directors’ liability was first authorized by a statute or the Constitution. If the basis of liability existed at common law, it was not “created by law” within the meaning of section 359, even if the common law theory of liability has since been codified.

I

BACKGROUND

The first amended complaint (complaint) alleges as follows. A corporation, e4L, Inc., did business in Los Angeles County and had its principal place of business there. e4L was a direct marketing company that promoted a wide variety of products on television, radio, and the Internet. Each week, it broadcast more than 3,000 half-hour television programs, commonly known as infomercials, throughout the world. e4L’s customers used credit cards to pay for purchases.

Stephen C. Lehman, Eric Weiss, and Daniel Yukelson were directors of e4L (directors). The directors controlled and…