Since the turn of this century, Delaware has allowed corporations to give notices to stockholders by electronic transmission. 8 Del. Code § 232(a). However, the statute is conditioned upon the stockholder’s consent. California has a similar consent requirement in Corporations Code § 20. Delaware is now proposing to amend Section 232 to permit a corporation to give notice by electronic mail unless the stockholder has objected. See Senate Bill No. 88. The bill would also define “electronic mail” for the first time.
As I was pondering these changes, I came across the following observations about the adequacy of email notifications penned by the estimable and eminently quotable Justice William W. Bedsworth of the California Court of Appeal:
“Email has many things to recommend it; reliability is not one of them. Between the ease of mistaken address on the sender’s end and the arcane vagaries of spam filters on the recipient’s end, email is ill-suited for a communication on which a million dollar lawsuit may hinge. A busy calendar, an overfull in-box, a careless autocorrect, even a clumsy keystroke resulting in a ‘delete’ command can result in a speedy communication being merely a failed one.”
Lasalle v. Vogel, 2019 Cal. App. LEXIS 533 (footnote omitted). Justice Bedsworth’s comments were directed to the adequacy of email notice before taking a default judgment and not the Delaware bill. Nonetheless, his concerns about the adequacy of email are entirely opposite to stockholder notice.
