In a 6–1 decision, New York’s highest court held that a plaintiff lacked standing to pursue derivative claims under English substantive law, rejecting the shareholder’s argument that the New York state legislature intended to grant standing for all shareholders of foreign corporations to file derivative lawsuits in New York. 

A bank holding company (the “Bank”) is incorporated under the laws of England and is headquartered in London. The plaintiff, a beneficial owner (the “Owner”) of the Bank’s shares, commenced this action on behalf of the Bank against current and former Bank directors and officers, as well as a New York-based affiliate alleging aiding and abetting breach of fiduciary duties under English law. The Bank moved to have the matter dismissed, arguing that the Owner lacked standing under English law because the Owner was not a registered member of the Bank. So, the internal affairs doctrine applied. 

On appeal, the court reaffirmed New York’s “longstanding adherence to the internal affairs doctrine,” which mandates that “the substantive law of the place of incorporation applies to disputes involving the internal affairs of a corporation.” The court also rejected the Owner’s argument that Sections 626 and 1319 of New York’s Business Corporation Law (the “BCL”) overrode the internal affairs doctrine. Section 626(a) provides that “an action may be brought in the right of a domestic or foreign corporation to procure a judgment in its favor, by a holder of shares or of voting trust certificates of the corporation or of a beneficial interest in such shares or certificates.” The Owner argued that Section 626 bestowed derivative standing on each member. Despite not being a registered member of the Bank, which is a requirement under English law, the Owner argued they had standing to represent the Bank because they held a “beneficial interest in [the Bank’s] shares.” The Bank argued and the court agreed that Section 626 simply establishes minimum grounds for a New York court to entertain an action brought derivatively on behalf of a corporation, without displacing the internal affairs doctrine. 

In the alternative, the Owner argued that Section 1319(a)(2) supplied the missing manifestation of legislative intent to displace the doctrine. The court quickly shut this argument down, noting that Section 1319(a)(2) is not a choice-of-law provision, but rather a list that sets forth various BCL articles and sections, including Section 626. Section 1319 provided that “to the extent provided therein, [each article] shall apply to a foreign corporation doing business in this state, its directors, officers and shareholders.” 

The court held that the statutory provisions cited by the Owner do not clearly manifest legislative intent to displace the long-settled internal affairs doctrine and, thus, do not preclude a defense that the Owner lacked standing under English substantive law to maintain this derivative action. The court noted that, had the legislature intended for Sections 626 and 1319 to override the internal affairs doctrine as it applies to shareholder derivative standing, they would have done so. 

Oregon is the first state in the U.S. to enact a state-level restriction on private equity (PE) investment or ownership in healthcare. Senate Bill 951 (the “SB 951”) aims to strengthen Oregon’s long-standing prohibition on the corporate practice of medicine marks a major shift in how corporate influence will be regulated.

On June 9, 2025, Oregon enacted SB 951, which targets the growing influence of corporate investors. Particularly, through Management Services Organizations (MSOs)—in clinical decision-making and medical practice ownership. It represents a decisive move to preserve physician autonomy and protect patient care from profit-driven goals. While Oregon already required doctors to own at least 51% of most practices, this requirement was bypassed by PE firms that employed physicians and then listed them as nominal owners while exerting control through affiliated MSOs. SB951 aims to close this backdoor by directly regulating MSOs and their ability to influence clinical operations.

Some key provisions set out by SB 951 will prohibit MSOs from owning or controlling a majority stake in medical practices and serving on their boards. MSOs will also be barred from making decisions that affect clinical care, such as scheduling patients, necessary staffing, influencing diagnostic coding, or negotiating payer contracts. These restrictions are safeguards that will ensure that only licensed physicians make decisions that may impact patient treatment.

• SB 951 also banned noncompete clauses for physicians, thus will allow physicians to continue practicing in the communities even after leaving a clinic. This safeguard was put in place to improve access to care, specifically those in rural or underserved communities.
• SB 951 will include a three-year transition period for compliance, with full implementation required by 2028. However, due to other governing bodies, hospitals, tribal healthcare facilities, and specialized behavioral clinics are exempt from SB 951.

SB 951 was a bipartisan bill that was driven by growing concerns over the effects of PE-backed consolidation in healthcare. Many stated that such investments led to higher costs, reduced access, and lower standards of care. Thus, SB 951 was passed as a safeguard against the corporatization of medicine with the goal of restoring clinical independence and prioritizing patients over investors. While other states, like Washington and Massachusetts have implemented some oversight mechanisms, Oregon is the first state to expressly block corporate control of medical practices.