Softbank Content Services Inc. v. MPO Canada Inc.

MEMORANDUM *

We review the choice of law determination de novo. 1 The district court was sitting in diversity in California and thus correctly recognized it was bound to follow California’s choice of law rules. 2 The guarantee provided for application of California law, so if Transcontinental was the alter-ego of MPO Canada, as the district court concluded, then both firms committed themselves to application of California law.

Application of California substantive law was correct. California’s governmental interest in preventing abuse of the corporate form to accomplish fraud exceeds any interest to the contrary in this case.

The district court’s factual findings were not clearly erroneous. 3 MPO Canada did indeed place all of its assets beyond Softbank’s reach, as the district court recognized, partly by sale of shares in Americ Disc, and partly by encumbering the remaining shares with a lien. Transcontinental’s remaining rights in the shares enabled it to preserve its investment interest unburdened by the Softbank liability, by evading the Softbank judgment. Especially persuasive is the fact that MPO Canada had no directors of its own and was run entirely by Transcontinental…