## Facts

- Marie L. Kasten held a 23.1% non-managing membership interest in Doral Dental USA, LLC, acquired through a divorce settlement.
- Doral Dental began negotiations in 2002–2003 with potential buyers, prompting Kasten to seek information about company affairs and the effect of a possible sale on her interest.
- Kasten requested broad access to company materials, including business, financial, tax, and transactional records, and status information about negotiations with potential purchasers.
- Doral Dental produced some materials but not all requested items.
- Kasten moved to compel production of electronically stored information, including business-related email correspondence among members, officers/directors, and counsel, and drafts of sale documents and related exhibits.
- The operating agreement provided member access to “all … records” and allowed members to “inspect and copy” “Company documents” “upon reasonable request.”
- The circuit court denied inspection of emails and drafts, ruled they were not covered by the statute or operating agreement, and granted summary judgment dismissing the inspection action.

## Issues

1. Whether business-related emails and draft transaction documents can fall within “Company documents” (and related inspection rights) under the operating agreement read in light of Wis. Stat. § 183.0405.
2. How courts must evaluate the “upon reasonable request” limitation when a member seeks extensive electronic materials.

## Decision

- The Wisconsin Supreme Court reversed the circuit court’s denial of inspection and its grant of summary judgment, and remanded.
- The court held that business-related emails and document drafts may qualify as “Company documents” subject to member inspection.
- The court held that “reasonable request” requires a balancing analysis that favors inspection but considers the LLC’s financial and practical burdens in responding to the specific request.
- The court rejected a categorical rule that emails are merely “communications” outside the scope of inspectable documents.

## Legal Principles

- When an operating agreement addresses member inspection rights, it is the primary source for defining the scope of inspection, within the statutory framework that permits modification by agreement.
- “Company documents” may include electronically stored materials—such as business-related emails and drafts—when they function as records of company activity.
- A contractual or statutory “reasonable request” condition requires weighing a bias in favor of a member’s inspection right against the LLC’s financial burden in complying with the particular request; burden alone is not dispositive.
- Disputes over extensive electronic inspection requests generally require fact-specific application of the reasonableness balancing test rather than categorical exclusions.

## Conclusion

The court held that LLC member inspection rights can reach business-related emails and drafts under an operating agreement’s “Company documents” provision, and that courts must assess the reasonableness of such requests by balancing a pro-inspection presumption against the company’s compliance burden, requiring remand for application of that standard.


Kasten v. Doral Dental USA, LLC, 733 N.W.2d 300 (Wis. 2007)