Dodge V. Ford Motor Co. May Still Be "Good Law" In Michigan, But What About California?

• Published date: 10 January 2022
• Subject Matter: Corporate/Commercial Law, Corporate and Company Law, Shareholders
• Law Firm: Allen Matkins Leck Gamble Mallory & Natsis LLP
• Author: Mr Keith P. Bishop

Professor Stephen Bainbridge recently controverted the following assertion that Dodge v. Ford Motor Co. does not represent the law of Michigan:

. . . the claim that 'shareholder primacy' is the 'traditional paradigm' is absurd. The single case reference is predictably Dodge v. Ford Motor Co., 204 Mich. 459 (1919) which does not represent the law in the vast majority of states, including Michigan. See Lynn A. Stout, Why We Should Stop Teaching Dodge v. Ford (UCLA, Law-Econ Research Paper No. 07-11, 2007). Ewan McGaughey, The Codetermination Bargains: The History of German Corporate and Labor Law, 23 Colum. J. Eur. L. 135, 176 n.71 (2016).

Dodge v. Ford Motor Co. is famous in corporate law circles for the Michigan Supreme Court's asseveration that a business corporation "is organized and carried on primarily for the profit of the stockholders".

As far as I could determine, no California court has adopted the case...