Hambrecht & Quist Venture Partners v. American Medical International, Inc.

This appeal raises the question of whether a standard choice-of-law provision (which states that a contract shall be governed by the “laws” of a particular jurisdiction) incorporates the statutes of limitations of the chosen state. We hold that it does and further conclude that the choice-of-law provision in this case requires the application of a foreign statute of limitations which is shorter than the otherwise applicable California statute of limitations.

Background

In October 1992, plaintiffs filed their original complaint in superior court against American Medical International, Inc. (AMI) and others, alleging various causes of action arising out of plaintiffs’ purchase of stock in a leveraged buyout of a company affiliated with AMI. Defendants removed the action to federal district court and challenged the sufficiency of the allegations. The district court’s ruling resulted in the filing of a first amended complaint and a remand of the action to superior court.

The first amended complaint alleged as follows. AMI is a Delaware corporation with its principal place of business in Los Angeles County. It is a private hospital and health care company. In or about 1976,…