Some Amusement For Those of You Who Care About Doing Business in CA

Is California unique in this regard?

I haven't read the decision, but it seems to me it should only apply to what the code refers to as member-managed limited liability" companies, because each of the members is treated as a partner.

But with a "manager-managed limited liability company" it is more in the nature of a limited partnership or corporation, so investors who are not managers have no say in the operation of the business, and no liability for obligations of the business, unlike partners in a general partnership.

Here's what Cara Griffith at Tax Analysts has to say about it.

My personal opinion is that when an LLC is set up in its operating agreement to be like a limited partnership rather than a general partnership, the same rules should apply as with a limited partnership.

A limited partner can, with the agreement of the other partners, become a general partner. But just because he can doesn't mean he should treated like a general partner. Likewise with an LLC, just because a member in theory can have a vote in management doesn't mean he should be treating as having one if he doesn't.

I can't answer your query directly but here is an example of New York going after Robert Redford.