Delaware judges aren’t exactly known for ceding jurisdiction to other states, especially in shareholder disputes. But a Delaware Chancery Court judge did just that on Monday, ruling that forum selection bylaws are valid even if they’re adopted in anticipation of litigation, and even if they designate a Delaware company’s out-of-state home turf as the forum.
In a 27-page decision, Chancellor Andre Bouchard dismissed a derivative suit alleging that the board of North Carolina-based First Citizens Bank breached its fiduciary duties to shareholders by adopting a forum selection clause that designates North Carolina as the forum for corporate disputes. Resolving what he called a question of first impression, Bouchard ruled that Delaware companies may name an exclusive forum other than Delaware for intracorporate disputes.
