Have at It, Court of Chancery . . .

Bushansky v. Soon-Shiong, No. D072213 (D4d1 May 25, 2018)

Over the past decade, it has become increasingly prevalent for corporations to enact what are called forum-selection bylaws. These require stockholders who sue the company or its directors in stockholder litigation to bring their claims only in the state of incorporation, usually Delaware. Because bylaws are, more or less, a contractual arrangement between the company and its stockholders, the theory is that the bylaws are an enforcible forum selection contract. The Delaware Supreme Court agrees, and has held that they are enforceable. I’m not aware of a reported California appellate decision that’s given a thumbs-up, but the parties in this case seem to agree that the bylaw here is valid and enforceable. They just disagree that it applies.