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AEI Law, P.C., is The Hero's Law Firm, 7755 Center Avenue, 11th Floor, Suite 1100, Huntington Beach, CA (2026)

is a full service business and intellectual property law firm offering an outside business and legal affairs department to artists, entrepreneurs, and innovators.

06/04/2026

California LLC Member Removal Legal Guide

Can You Force Out an LLC Member in California? Judicial Expulsion, Dissociation, Buyouts, and California LLC Operating Agreements

One of the most common questions in a California LLC dispute is this: can the other members force an LLC member out of the company?

The short answer is: sometimes, but not easily.

Under California LLC law, members generally do not have a free-floating right to “kick out” another owner just because the relationship has gone bad, trust has broken down, or the business partners no longer get along. In many cases, the answer depends first on the LLC operating agreement, and second on whether the facts fit a specific provision of the California Corporations Code.

Start With the LLC Operating Agreement
If the California LLC operating agreement contains a buy-sell clause, expulsion provision, deadlock mechanism, or other member-removal procedure, that document will often be the first and most important place to look.

California Corporations Code section 17706.02 recognizes that a member may be dissociated from an LLC if an event stated in the operating agreement occurs, or if the member is expelled pursuant to the operating agreement. That means a well-drafted operating agreement can make a major difference in an LLC member dispute.

For example, an operating agreement may define triggering events such as fraud, embezzlement, felony conduct, material breach, insolvency, or competition with the company. It may also provide a valuation formula, payment terms, and a mandatory buyout procedure.

Without that kind of language, however, things get much harder.

No Operating Agreement? California Default Rules Are Limited
If there is no written operating agreement, or if the agreement is silent, California’s default LLC rules apply. Those rules do not create a broad right for the majority to expel a minority member whenever they want.

Instead, California Corporations Code section 17706.02 provides only limited statutory grounds for member expulsion.

The other members may unanimously expel a member in certain narrow situations, including where:

▪️it is unlawful to continue the LLC’s activities with that person as a member,
▪️the member has transferred all of that person’s transferable interest, subject to statutory exceptions,
▪️a corporate member has dissolved or lost good standing and failed to cure, or
▪️a member that is itself an LLC or partnership has dissolved and is winding up.

Those are not ordinary “business divorce” facts. In many real-world owner disputes, the fight is instead about alleged misconduct, self-dealing, concealment, misuse of company assets, or conduct that makes it impossible to continue operating together.

Judicial Expulsion of an LLC Member in California
California law does provide a path for judicial expulsion, but it is not automatic and it usually requires litigation.

Under Corporations Code section 17706.02, the LLC may apply for a court order expelling a member if that member has:

▪️engaged in wrongful conduct that has adversely and materially affected, or will adversely and materially affect, the LLC’s activities,
▪️willfully or persistently committed a material breach of the operating agreement or duties owed to the LLC, or
▪️engaged in conduct relating to the LLC’s activities that makes it not reasonably practicable to carry on the business with that person as a member.

This is an important point in California LLC litigation: not every disagreement justifies forcing out an LLC member. Courts generally look for serious misconduct, persistent breach, or a breakdown severe enough that continued operation with the member is no longer reasonably practicable.

Does Expulsion Mean the Member Loses Everything?
Not necessarily.

In California, there is an important distinction between removing a member from management and forcing a full buyout of that member’s economic interest. In many LLC disputes, dissociation means the member may lose management and voting rights, while the economic ownership issues still have to be resolved separately.

That is why many LLC cases turn into valuation disputes, buyout negotiations, dissolution claims, or broader breach of fiduciary duty and business tort litigation.

Can the Other Members Force a Buyout Instead?
Sometimes, but usually through contract or through a dissolution proceeding.

California Corporations Code section 17707.03 allows a member or manager to seek judicial dissolution of an LLC in certain circumstances, including deadlock, internal dissension, abandonment, fraud, mismanagement, abuse of authority, or when it is not reasonably practicable to carry on the business in conformity with the governing documents.

In that setting, the other members may avoid dissolution by purchasing the moving member’s interest for cash at fair market value. That is a statutory buyout mechanism, but it arises in the dissolution context. In other words, California law does not simply hand members a general-purpose eject button.

Practical Takeaway for California LLC Owners
If you are forming a California LLC, the best time to address member expulsion, dissociation, deadlock, and buyout rights is before the dispute begins. A strong operating agreement can define cause, set procedures, establish valuation rules, and reduce the risk of expensive business litigation later.

If your LLC is already in a dispute, the key questions are:

▪️Is there an operating agreement with a valid removal or buyout clause?
▪️Do the facts support judicial expulsion under California Corporations Code section 17706.02?
▪️Is judicial dissolution or a fair-market-value buyout under section 17707.03 a more realistic path?
▪️the members’ own actions created additional claims for breach of fiduciary duty, fraud, concealment, or misuse of company assets?

In short, California law does allow an LLC member to be forced out in limited circumstances, but it is rarely simple. Whether a member can be expelled, dissociated, bought out, or instead remains an economic owner often depends on the operating agreement, the facts, and the remedies being pursued in court.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship.

06/01/2026

Breach of Fiduciary Duty in California

A breach of fiduciary duty claim arises when a person or entity who has been entrusted to act for the benefit of another fails to honor that obligation. Under California law, fiduciary duties are not imposed in every business relationship. But where a true fiduciary relationship exists, the law expects more than ordinary honesty. It demands loyalty, good faith, fair dealing, and, in many settings, careful management of the other party’s interests.

California courts describe a fiduciary relationship as one in which a party is bound to act with the utmost good faith for the benefit of another and may not take advantage of the relationship without the other person’s knowledge or consent. Classic examples include trustee-beneficiary, partner-partner, agent-principal, attorney-client, and certain corporate and investment-adviser relationships. By contrast, not every contract dispute or failed business deal gives rise to a fiduciary duty claim. Many commercial parties deal at arm’s length, and those relationships are governed by contract law, not fiduciary law.

The Core Elements of a California Fiduciary Duty Claim

In California, a claim for breach of fiduciary duty generally has three basic elements:

1 A fiduciary relationship existed.

The plaintiff must first show that the defendant owed fiduciary duties. That usually depends on the nature of the relationship, the governing law, and sometimes the governing documents.

2 The fiduciary breached a duty arising from that relationship.

Once a fiduciary relationship is established, multiple duties may apply. Depending on the context, these can include duties of loyalty, due care, candor, disclosure, and good faith.

3 The breach caused damage.

The plaintiff must show that the alleged misconduct was a substantial factor in causing harm.

What Duties Does a Fiduciary Owe?

The answer depends on the relationship.

A fiduciary ordinarily owes a duty of loyalty, which means the fiduciary cannot use the position for secret personal advantage, self-deal without proper disclosure, or place personal interests ahead of the beneficiary’s interests. California law also recognizes a duty to act with utmost good faith.

A fiduciary may also owe a duty of care. In some contexts, that means managing the subject matter of the relationship with due care. For corporate directors, California statutes require directors to act in good faith, in the best interests of the corporation and its shareholders, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.

In the LLC context, California has also codified fiduciary duties. For example, in a member-managed LLC, the statutory duties include duties of loyalty and care, but the duty of care is framed more narrowly than ordinary negligence and is limited to refraining from grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law. That is one reason LLC fiduciary disputes must be analyzed carefully and with close attention to the company’s structure and governing documents.

What Conduct Can Constitute a Breach?

A breach of fiduciary duty can take many forms. Common examples include:

▪️Self-dealing or undisclosed conflicts of interest
▪️Misappropriating company or client funds
▪️Diverting business opportunities for personal gain
▪️Failing to disclose material information
▪️Secret compensation arrangements
▪️Negligent or reckless mismanagement of entrusted assets
▪️Using a position of trust to benefit one owner, manager, or insider at another’s expense

For example, California courts have recognized that attorneys owe fiduciary duties to clients, including loyalty. Misappropriation of client funds can breach that duty. Courts have also recognized that investment advisers and stockbrokers may owe fiduciary duties to clients, and that a breach may be based on a failure to act as a reasonably careful fiduciary would act under similar circumstances.

Importantly, a fiduciary breach can be based on fraudulent conduct, but it can also arise from misconduct sounding in negligence, depending on the relationship and the duty at issue.

Why These Cases Matter in Business Disputes

Breach of fiduciary duty claims frequently appear in California business litigation. They often arise in disputes among business partners, LLC members, corporate directors, majority and minority owners, agents, and professionals entrusted with money, authority, or confidential information.

These claims can be especially significant because fiduciary duties are stricter than the duties that apply in ordinary commercial relationships. A party who might be permitted to pursue its own economic interests in a standard contract negotiation may be prohibited from doing the same thing where fiduciary duties apply.

Practical Takeaway

If you are in a position of trust, California law expects transparency, loyalty, and careful handling of other people’s interests. If you believe a business partner, manager, attorney, agent, adviser, or other fiduciary has put personal interests first, concealed material facts, or mishandled assets, the issue may be more than poor judgment. It may be a breach of fiduciary duty.

Because these cases are highly fact-specific, the right analysis starts with the relationship itself: Was there a fiduciary duty, what duties applied, how were they breached, and what harm followed?

Disclaimer: This article is provided for informational purposes only and does not constitute legal advice. Legal issues are fact-specific and depend on the governing relationship, documents, and applicable law. If you need advice about a specific dispute, consult qualified California counsel.

05/28/2026

California Trademark Infringement: Business Owner Guide

A trademark is often one of a company’s most valuable assets. A business’s name, logo, slogan, or other identifying mark can carry reputation, customer loyalty, and market recognition. In California, one important source of protection is the state’s Model State Trademark Law, found in California Business and Professions Code sections 14200 and following.

For business owners, the key point is this: California statutory trademark infringement is not just about someone copying a logo exactly. It can also involve the unauthorized use of a mark, or a confusingly similar imitation, in a way that is likely to make consumers believe the goods or services come from the trademark owner or are connected with that owner.

What California’s Trademark Statute Covers
California’s trademark chapter provides a civil cause of action to the owner of a mark registered under the chapter. That matters. A California statutory claim is tied to a registered California mark, not merely an unregistered business name or general marketplace use. Businesses may have other rights under common law or federal law, but the state statutory claim itself depends on registration under the California system.

The core infringement provision generally reaches unauthorized use of a reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, distribution, offering for sale, or advertising of goods or services when that use is likely to cause confusion, mistake, or deception as to source or origin.

In practical terms, the question is whether ordinary consumers are likely to be misled. The law is not limited to exact duplicates. A mark that looks, sounds, or means something close enough to create marketplace confusion can create legal exposure even if it is not identical.

How Courts Evaluate Confusion
California courts have explained that trademark infringement and unfair competition turn on whether an appreciable number of reasonable buyers are likely to be confused. In analyzing that issue, courts often consider familiar trademark factors such as:

▪️the strength of the plaintiff’s mark,
▪️the similarity of the marks,
▪️the relatedness or proximity of the goods or services,
▪️evidence of actual confusion,
▪️overlap in marketing channels,
▪️the likely degree of purchaser care,
▪️the defendant’s intent, and
▪️the likelihood of expansion into related markets.

Because of that approach, California statutory infringement often looks very similar to federal trademark litigation. Even though the claim arises under state law, the analysis frequently tracks the same confusion-based principles seen in federal cases.

California Law Reaches More Than the Direct Seller
One feature of California’s statute that business owners sometimes overlook is that it can extend beyond the person directly selling the allegedly infringing product.

The statute also reaches a person who knowingly facilitates, enables, or otherwise assists another person’s use or sale of goods or services bearing a counterfeit or colorable imitation of a registered mark. California law even provides a mechanism under which knowledge may be presumed after a properly supported written cease-and-desist demand is delivered.

The statute also specifically addresses landlords and property owners in some circumstances. If a landlord or property owner controls the premises and knew, or had reason to know, of infringing activity occurring there, the statute may apply to that party as well.

That makes California’s law particularly important in disputes involving swap meets, marketplaces, shared commercial spaces, and other locations where counterfeit or confusingly branded goods are sold by multiple vendors.

Remedies Available Under California Law
California law provides meaningful remedies for owners of registered marks. A prevailing plaintiff may seek:

▪️injunctive relief to stop the infringing conduct,
▪️recovery of the defendant’s profits,
▪️recovery of the plaintiff’s damages,
▪️enhancement of those amounts up to three times in appropriate cases, and
▪️destruction of counterfeit goods, labels, packaging, and related production tools.

In counterfeit cases, the court may also order seizure of goods and instrumentalities used to produce counterfeit items, including through ex parte procedures where the statutory requirements are met.

At the same time, the statute contains limits. For example, an innocent infringer or innocent violator is a person who acted without knowledge that the mark was intended to be used to cause confusion, mistake, or deception. California law also limits relief against certain printers acting solely for others if they qualify as innocent infringers.

Why Registration and Early Action Matter
A California statutory infringement claim is strongest when a business has taken formal steps to protect its brand. Registration can make enforcement more direct under the state statute and can strengthen a business’s position when dealing with imitators, counterfeiters, facilitators, or property owners hosting infringing activity.

Early enforcement also matters. A confusingly similar brand can erode goodwill, divert sales, and create customer uncertainty quickly. Sending a prompt, well-supported demand and documenting the scope of the confusion can make a substantial difference in later litigation.

Final Takeaway
California statutory trademark infringement law gives registered trademark owners a direct cause of action against unauthorized uses likely to confuse consumers. It also provides broader tools than many business owners expect, including remedies against knowing facilitators and, in some cases, landlords or property owners connected to infringing sales.

This post is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship.

05/25/2026

California Right of Publicity: Civil Code 3344 Guide

California’s statutory right of publicity, Civil Code section 3344, is one of the state’s best-known commercial identity protections. It applies when a person’s name, voice, signature, photograph, or likeness is knowingly used without consent on or in products, merchandise, or goods, or for advertising or selling goods or services.

This statute often appears in cases involving advertising campaigns, social media promotions, product packaging, online marketing, and unauthorized endorsements.

What Must Be Proven?

A plaintiff suing under section 3344 generally must prove:

1 The defendant knowingly used the plaintiff’s name, voice, signature, photograph, or likeness.

2 The use was on or in products, merchandise, or goods, or for purposes of advertising, selling, or soliciting purchases of goods or services.

3 The plaintiff did not consent.

4 The plaintiff suffered injury.

5 There was a direct connection between the use and the commercial purpose.

The statute is focused on commercial exploitation. Not every reference to a person in a publication triggers liability. Context matters, especially where expressive works or editorial uses are involved.

“Readily Identifiable” Matters for Photographs

If the claim is based on a photograph, the plaintiff must be readily identifiable. The statute explains that a person is readily identifiable when someone viewing the image with the naked eye can reasonably determine that the person depicted is the one complaining of the unauthorized use.

That means a vague crowd shot or an unrecognizable background appearance may not be enough. But a recognizable image used to help sell a product or service can squarely implicate the statute.

The Statute’s Damages Scheme Is One of Its Biggest Features

Section 3344 is often pleaded because it supplies a concrete remedial framework.

1. The Greater of $750 or Actual Damages

A prevailing plaintiff may recover the greater of $750 or actual damages. That minimum statutory amount is important in smaller cases where the unauthorized use is obvious but the economic loss is hard to quantify. In larger cases, actual damages may far exceed the statutory floor.

2. Defendant’s Profits Attributable to the Unauthorized Use

The statute also allows recovery of profits from the unauthorized use that are not already taken into account in computing actual damages. This can substantially increase exposure where the use appeared in a successful campaign or sales-driven promotion.

The burden structure matters. The plaintiff generally needs to prove gross revenue attributable to the unauthorized use, and the defendant then has the burden to prove deductible expenses.

3. Punitive Damages

Punitive damages may also be awarded. That makes section 3344 significantly more potent than many business tort statutes. A willful, exploitative, or knowingly deceptive use of identity can therefore carry meaningful risk beyond compensatory relief.

4. Attorney’s Fees and Costs

Another major feature of section 3344 is fee shifting. The prevailing party is entitled to attorney’s fees and costs. That can materially affect case value and settlement posture on both sides.

5. Injunctive Relief and Temporary Restraining Orders

The statute expressly permits injunctive relief. A plaintiff can seek an order requiring the defendant to remove, recall, or cease publication or distribution of the unauthorized use. In the right case, that allows the plaintiff to address ongoing misuse quickly rather than waiting only for a damages award at the end of the case.

Limits and Defenses

Section 3344 is not limitless. Consent remains a full defense. The statute also includes protections for media entities in certain circumstances unless knowledge is shown, and it recognizes that not every use in a commercially sponsored medium automatically counts as a use requiring consent. Courts look closely at whether the identity was directly connected to the advertising or sales purpose.

Why This Claim Is So Common

Plaintiffs often plead section 3344 alongside false endorsement and common law publicity claims because the statute provides a clear elements framework and unusually strong remedies: a damages floor, profits, punitive damages, fees, costs, and injunctions. In many identity-misuse cases, it is one of the most practical and consequential California claims available.

This post is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship.

05/20/2026

California Unfair Competition Law: Proof and Relief Guide

California’s Unfair Competition Law, often called the UCL, is broader than many people expect. It prohibits “unlawful, unfair, or fraudulent” business acts or practices, which means a UCL claim can borrow from many different kinds of underlying misconduct. But although the statute is broad in scope, its remedies are narrower than many litigants assume.

That makes the UCL an important claim to understand, especially in lawsuits involving intellectual property, advertising, online conduct, or business practices.

What Must Be Proven?

A UCL claim can proceed under one or more of three theories:

1. Unlawful Conduct

An “unlawful” practice under the UCL is often described as a borrowed violation. In other words, the UCL can incorporate violations of other laws and treat them as independently actionable unfair competition. If another statute, regulation, or common law doctrine was violated, that conduct may support a UCL claim.

2. Unfair Conduct

The meaning of “unfair” can vary depending on the context and the type of case. In competitor actions, California courts often apply a more structured test tied to antitrust or legislatively declared policy. In consumer-facing cases, courts have used somewhat different formulations. Because the doctrine is still context-sensitive, lawyers often plead unfairness alongside unlawful or fraudulent conduct rather than relying on unfairness alone.

3. Fraudulent Conduct

A “fraudulent” business practice under the UCL does not always require all elements of common law fraud. The focus is whether members of the public are likely to be deceived. Even so, when the theory sounds in fraud, courts often expect the allegations to be pleaded with particularity.

Standing Matters

Not everyone can bring a UCL claim. A private plaintiff generally must show that it lost money or property as a result of the challenged conduct. That standing requirement is important. A plaintiff who cannot identify economic injury caused by the unfair practice may have difficulty proceeding, even if the conduct itself was questionable.

The Most Important Point: The UCL Usually Does Not Provide Damages

This is where many people get surprised. The UCL is powerful, but it is primarily an equitable statute. A private plaintiff generally may seek injunctive relief and restitution, not traditional compensatory damages.

That means no recovery for pain and suffering, no general damages for reputational harm, and usually no punitive damages under the UCL itself. If a plaintiff wants those kinds of remedies, it usually needs to pair the UCL with other causes of action, such as defamation, right of publicity, fraud, or trademark-based tort theories.

What Relief Is Available?
1. Injunctive Relief

An injunction can order a business to stop a challenged practice. In many UCL cases, this is the main practical remedy. It can require changes to advertising, sales practices, disclosures, website content, or other business conduct going forward.

2. Restitution

Restitution is designed to restore money or property that the defendant wrongfully acquired from the plaintiff. It is not the same thing as tort damages or a broad disgorgement remedy. The focus is returning money or property in which the plaintiff had a vested interest.

For example, if money was taken from consumers or counterparties through an unlawful business practice, restitution may be available. But a plaintiff generally cannot use the UCL to obtain nonrestitutionary disgorgement of profits merely because the defendant benefited from the conduct.

3. Public Remedies in Government Actions

Civil penalties are available under the UCL in enforcement actions brought by public prosecutors, not in ordinary private suits. That distinction matters when reading headlines about large UCL recoveries. Private plaintiffs and public agencies do not have the same remedial toolbox.

4. Attorney’s Fees

Attorney’s fees are not ordinarily available under the UCL itself. A party may still seek fees under some other independent basis, but the UCL alone is not a general fee-shifting statute.

Why the UCL Is Still Worth Pleading

Even with limited remedies, the UCL can be a valuable cause of action. It can support injunctive relief, capture business practices that do not fit neatly into a traditional tort, and provide a broad equitable framework where other claims are still being developed.

The key is understanding what the claim can and cannot do. The UCL is often excellent for stopping conduct and obtaining restitution. It is not a substitute for a damages claim.

This post is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship.

05/18/2026

What a Strong Art Purchase Agreement Should Include Under California Law

A strong art purchase agreement in California should do much more than state a price and identify the painting. It should clearly define what is being sold, what rights are being kept by the artist, how delivery and risk are handled, and what happens if there is damage, a dispute, or a later resale. In the art world, misunderstandings often arise not because the parties disagree about the artwork itself, but because the contract does not clearly separate the physical object from the legal rights connected to it.

First, a strong agreement should identify the artwork with precision. That means more than listing a title. The contract should describe the work by title, medium, dimensions, year, signature status, and framing, and ideally attach a photograph and condition report. If authenticity documents or provenance records will be delivered, the agreement should say so. These details matter because they reduce later disputes over whether the buyer received the correct piece, whether the work was altered, and whether damage occurred before or after delivery.

Second, the agreement should clearly address price, payment, and when title transfers. A good California art purchase agreement should state the full purchase price, whether any deposit is due, accepted payment methods, when payment is deemed complete, and when title passes. If the artist does not want title to pass until funds clear, the agreement should say that expressly. Delivery terms should also be specific, including who arranges shipping, who pays for it, what insurance is required in transit, and when the risk of loss shifts from artist to buyer.

Third, the contract should sharply distinguish ownership of the original artwork from copyright and reproduction rights. Buying an original painting does not automatically mean the buyer can reproduce it on posters, merchandise, websites, or advertising. A strong agreement should say whether the buyer is purchasing only the original object or also receiving any license to photograph, publish, reproduce, or commercially exploit the work. If the artist is keeping all copyright rights, that should be stated clearly. If the buyer is receiving a limited license, that license should be narrow, written, and specific.

Fourth, a strong agreement should address future uses of the work. Many artists want to preserve the right to make prints, use images of the work in portfolios, books, social media, exhibition catalogs, or promotional materials, and be credited as the creator. If the parties expect any of those uses, the contract should spell them out. If prints or editions are important to the deal, the agreement should also describe whether those reproductions may be limited edition or open edition and who controls the edition terms.

Fifth, the agreement should cover damage, conservation, and restoration. Art is fragile, and disputes often arise after delivery. A strong contract should say what happens if the work is damaged in transit, whether the buyer must notify the artist before restoration, and whether the artist gets the first opportunity to perform or approve repairs. If the artist cares about attribution or the integrity of the piece, the contract should also restrict mutilation, destructive alterations, or improper display conditions.

Sixth, resale provisions should be drafted carefully. Some artists want a contractual right to notice of resale or a percentage of a later profitable sale. If that is part of the deal, the agreement should say exactly when the obligation is triggered, how the resale price is calculated, when payment is due, and whether the obligation binds successors. These provisions should be drafted as express contract terms, not assumed to arise automatically.

Finally, every strong California art purchase agreement should include practical dispute terms: notice procedures, attorneys’ fees language if desired, integration and amendment clauses, California choice-of-law provisions where appropriate, and clear venue language. These provisions do not make a contract exciting, but they often determine whether the agreement is enforceable and efficient when a dispute arises.

At AEI Law PC, we help artists, collectors, galleries, and creative businesses put these issues in writing before they become expensive problems. If you need a solid art purchase agreement tailored to your transaction, contact AEI Law PC.

This article is for general informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship.

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