Other jurisdictions are not as generous as New Jersey when determining the existence of shareholder oppression. Del Borrello v. Del Borrello, 62 Pa. D. & C 4th 417, 431 (2001).  As I stated in my previous blog posts, New Jersey applies the “reasonable expectations of the shareholder test.”  Brenner v. Berkowitz, 133 N.J. 435 (1993); Muellenberg v. Bikon Corp, 143 N.J. 168 (1996).  Delaware does not have a statute similar to New Jersey’s Minority Oppression Statute. Nixon v. Blackwell, 626 A.2d 1366, 1380 (Del. 1993).  Moreover, “Delaware Courts have not recognized any common-law remedy for minority oppression.”  208 N.J.L.J 727.
 
Texas Courts balance the minority shareholder’s reasonable expectations against the corporation’s desire to run its business effectively.  For example, in Willis v. Bydalek, 997 S.W.2d 798 (Tex. Ct. App. 1999), the Texas Court of Appeals applied that test and held that the lock-out and firing of minority shareholders did not constitute oppression. Id. at 801-802. 
 
In other jurisdictions, such as Minnesota, the majority’s defeated expectations must have been “central to the minority’s decision to join the venture.”  Gunderson v. Alliance of Computer Professionals, Inc., 628 N.W.2d 173, 191 (Minn. Ct. App. 2001). 
 
Oregon courts have held that a single violation alone of the minority shareholders may not be ground for Court intervention.  Hayes v. Olmsted & Assoc., Inc., 21 P.3d 178, 182 (Or. Ct. App. 2001).  Pursuant to the same, the Hayes Court held, “the existence of one or more badges of oppression in isolation does not necessarily justify relief.  Instead we examine the pattern of conduct of those in control and determine the effect of that conduct on the majority to determine whether, in sum, they show oppression.” Id
 
Unlike, Texas, Minnesota, and Oregon, New Jersey does not add the additional hurdles enumerated above. New Jersey applies the reasonable expectations of the shareholder test.  Nevertheless, New Jersey Courts have cautioned against applying the minority oppression statute.  Exadakitlos v. Cinnaminson Realty Co., 167 N.J. Super. 141 (App. Div. 1979). Again, under New Jersey law, oppression may only be found where the minority’s reasonable expectations have been interfered with. If the minority’s expectations were unreasonable they cannot maintain a claim of minority oppression.  
 
Scott Unger is a Shareholder in Stark & Stark’s Lawrenceville, New Jersey office concentrating in Shareholder & Partner Dispute Litigation. For questions, or additional information, please contact Mr. Unger.