2005 California Corporations Code Sections 15701-15702 Article 10. Class Actions and Derivative Actions

15701.  Any limited partner of a foreign or domestic limited
partnership may bring a class action on behalf of all or a class of
limited partners to enforce any claim common to those limited
partners  and any such action shall be governed by the law governing
class actions generally, provided that in order to maintain the class
action there shall be no requirement that the class be so numerous
that joinder of all members is impracticable.
15702.  (a) No action may be instituted or maintained in right of
any domestic or foreign limited partnership by any partner of the
limited partnership unless both of the following conditions exist:
   (1) The plaintiff alleges in the complaint that plaintiff was a
partner of record or beneficially, at the time of the transaction or
any part thereof of which plaintiff complains or that plaintiff's
interest thereafter devolved upon plaintiff by operation of law from
a partner who was a partner at the time of the transaction or any
part thereof complained of.  Any partner who does not meet these
requirements may nevertheless be allowed in the discretion of the
court to maintain the action on a preliminary showing to and
determination by the court, by motion and after a hearing at which
the court shall consider any evidence, by affidavit or testimony, as
it deems material, that (A) there is a strong prima facie case in
favor of the claim asserted on behalf of the limited partnership, (B)
no other similar action has been or is likely to be instituted, (C)
the plaintiff acquired the interest before there was disclosure to
the public or to the plaintiff of the wrongdoing of which plaintiff
complains, (D) unless the action can be maintained the defendant may
retain a gain derived from defendant's willful breach of a fiduciary
duty, and (E) the requested relief will not result in unjust
enrichment of the limited partnership or any partner of the limited
partnership.
   (2) The plaintiff alleges in the complaint with particularity
plaintiff's efforts to secure from the general partners such action
as plaintiff desires or the reasons for not making that effort, and
alleges further that plaintiff has either informed the limited
partnership or the general partners in writing of the ultimate facts
of each cause of action against each defendant or delivered to the
limited partnership or the general partners a true copy of the
complaint which plaintiff proposes to file.
   (b) In any action referred to in subdivision (a), at any time
within 30 days after service of summons upon the limited partnership
or upon any defendant who is a general partner of the limited
partnership or held that position at the time of the acts complained
of, the limited partnership or the defendant may move the court for
an order, upon notice and hearing, requiring the plaintiff to furnish
security as hereinafter provided.  The motion shall be based upon
one or both of the following grounds:
   (1) That there is no reasonable possibility that the prosecution
of the cause of action alleged in the complaint against the moving
party will benefit the limited partnership or its partners.
   (2) That the moving party, if other than the limited partnership,
did not participate in the transaction complained of in any capacity.
  The court on application of the limited partnership or any
defendant may, for good cause shown, extend the 30-day period for an
additional period not exceeding 60 days.
   (c) At the hearing upon any motion pursuant to subdivision (b),
the court shall consider evidence, written or oral, by witnesses or
affidavit, as may be material (1) to the ground upon which the motion
is based, or (2) to a determination of the probable reasonable
expenses, including attorneys' fees, of the limited partnership and
the moving party which will be incurred in the defense of the action.
  If the court determines after hearing the evidence adduced by the
parties, that the moving party has established a probability in
support of any of the grounds upon which the motion is based, the
court shall fix the nature and amount of security, not to exceed
fifty thousand dollars ($50,000), to be furnished by the plaintiff
for reasonable expenses, including attorneys' fees, which may be
incurred by the moving party and the limited partnership in
connection with the action.  A ruling by the court on the motion
shall not be a determination of any issue in the action or of the
merits thereof.  The amount of the security may thereafter be
increased or decreased in the discretion of the court upon a showing
that the security provided has or may become inadequate or is
excessive, but the court may not in any event increase the total
amount of the security beyond fifty thousand dollars ($50,000) in the
aggregate for all defendants.  If the court, upon any such motion,
makes a determination that security shall be furnished by the
plaintiff as to any one or more defendants, the action shall be
dismissed as to such defendant or defendants, unless the security
required by the court shall have been furnished within any reasonable
time as may be fixed by the court.  The limited partnership and the
moving party shall have recourse to the security in such amount as
the court shall determine upon the termination of the action.
   (d) If the plaintiff shall, either before or after a motion is
made pursuant to subdivision (b), or any order or determination
pursuant to such motion, post good and sufficient bond or bonds in
the aggregate amount of fifty thousand dollars ($50,000) to secure
the reasonable expenses of the parties entitled to make the motion,
the plaintiff has complied with the requirements of this section and
with any order for security theretofore made pursuant hereto, and any
such motion then pending shall be dismissed and no further or
additional bond or other security shall be required.
   (e) If a motion is filed pursuant to subdivision (b), no pleadings
need be filed by the limited partnership or any other defendant and
the prosecution of the action shall be stayed until 10 days after the
motion has been disposed of.