{"attribution":{"source":"legal.exploreworldai.com","canonical":"https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:23-f-4th-714","cite_as":"NovaCopilot, legal.exploreworldai.com (https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:23-f-4th-714)","license":"https://legal.exploreworldai.com/revision","version":"legal-2026-10-14","fingerprint":"ewai:us:88b5b2","proof":"sha256:00ed2f29b1306c704cfbbb4f348e7287883a49cd0cccfa540e024dc782995158","jurisdiction":"us","lang":"en","publisher":"NovaCopilot by ExploreWorld Legal","terms":"https://legal.exploreworldai.com/om"},"brand_source":"Source: NovaCopilot","item":{"schema_version":"1.0.0","id":"us:23-f-4th-714","jurisdiction":"us","lang":"en","brand_source":"Source: NovaCopilot","brand":{"product":"NovaCopilot","platform":"ExploreWorldAI","infrastructure":"ExploreWorld Legal","infrastructure_url":"legal.exploreworldai.com","legal_entity":"Valkiv Ventures AB","permanent_url":"https://legal.exploreworldai.com/novacopilot","source":"Source: NovaCopilot","powered_by":"Powered by NovaCopilot","license":"https://legal.exploreworldai.com/licensvillkor"},"sections":[{"title":"In the","paragraphs":[]},{"title":"United States Court of Appeals","paragraphs":[]},{"title":"For the Seventh Circuit","paragraphs":["para_4"]},{"title":"No. 20-2244","paragraphs":["para_6","para_7","para_8","para_9","para_10","para_11","para_12","para_13","para_14","para_15"]},{"title":"Appeal from the United States District Court for the","paragraphs":["para_17","para_18","para_19"]},{"title":"ARGUED NOVEMBER 30, 2020 — DECIDED JANUARY 7, 2022","paragraphs":["para_21"]},{"title":"Before EASTERBROOK, WOOD, and HAMILTON, Circuit","paragraphs":["para_23"]},{"title":"HAMILTON, Circuit Judge. On October 29, 2018, a Boeing","paragraphs":[]},{"title":"737 MAX airliner crashed in the sea near Indonesia, killing","paragraphs":[]},{"title":"2 No. 20-2244","paragraphs":["para_27","para_28","para_29","para_30"]},{"title":"Federal Aviation Administration kept the planes grounded","paragraphs":["para_32","para_33","para_34"]},{"title":"In December 2019, plaintiff Seafarers Pension Plan, a","paragraphs":["para_36","para_37","para_38"]},{"title":"Boeing officers and board members made materially false and","paragraphs":["para_40","para_41","para_42","para_43","para_44","para_45","para_46","para_47","para_48","para_49","para_50","para_51","para_52"]},{"title":"I. Factual and Procedural Background","paragraphs":[]},{"title":"The Boeing Company is an international aerospace com-","paragraphs":["para_55","para_56","para_57"]},{"title":"No. 20-2244 3","paragraphs":["para_59","para_60","para_61","para_62","para_63","para_64"]},{"title":"The Seafarers Plan filed this derivative suit under Section","paragraphs":[]},{"title":"14(a) of the Securities Exchange Act of 1934 alleging that Boe-","paragraphs":["para_67","para_68","para_69"]},{"title":"The Exchange Act gives federal courts exclusive jurisdiction","paragraphs":["para_71"]},{"title":"Plan therefore filed its complaint in the Northern District of","paragraphs":["para_73"]},{"title":"The defendants moved to dismiss based on the doctrine of","paragraphs":["para_75","para_76"]},{"title":"With respect to any action arising out of any act","paragraphs":["para_78"]},{"title":"By-Law, unless the Corporation consents in","paragraphs":["para_80","para_81","para_82","para_83","para_84"]},{"title":"The defendants conceded that enforcement of the forum by-","paragraphs":["para_86","para_87","para_88"]},{"title":"4 No. 20-2244","paragraphs":[]},{"title":"Plan to vindicate its substantive rights under the Exchange","paragraphs":[]},{"title":"Act of 1934. The district court agreed with defendants and dis-","paragraphs":["para_92"]},{"title":"3246326, at *4 (N.D. Ill. June 8, 2020).1","paragraphs":[]},{"title":"Applying the forum bylaw to this case is contrary to Del-","paragraphs":["para_95","para_96","para_97","para_98","para_99","para_100","para_101","para_102","para_103","para_104","para_105","para_106"]},{"title":"II. Standard of Review","paragraphs":[]},{"title":"The Seafarers Plan argues that we should decide de novo","paragraphs":["para_109"]},{"title":"Defendants argue that dismissal on forum non conveniens","paragraphs":["para_111","para_112","para_113","para_114"]},{"title":"1 Along with its federal claims, the Seafarers Plan initially alleged","paragraphs":["para_116","para_117","para_118","para_119"]},{"title":"No. 20-2244 5","paragraphs":["para_121","para_122"]},{"title":"SIRVA, Inc., 832 F.3d 800, 805 (7th Cir. 2016); see also Piper","paragraphs":[]},{"title":"Aircraft Co. v. Reyno, 454 U.S. 235, 257, 261 (1981) (finding no","paragraphs":["para_125","para_126","para_127","para_128"]},{"title":"The specific problem here is different, calling for what","paragraphs":["para_130","para_131"]},{"title":"The district court explained that it dismissed this case because","paragraphs":["para_133","para_134"]},{"title":"3246326, at *4. In a wide range of contexts, we have explained","paragraphs":["para_136","para_137","para_138"]},{"title":"Cir. 2021), quoting Abbott Labs v. Mead Johnson & Co., 971 F.2d","paragraphs":[]},{"title":"6, 13 (7th Cir. 1992) (in deciding preliminary injunction","paragraphs":["para_141","para_142","para_143","para_144","para_145","para_146","para_147","para_148"]},{"title":"E.g., Bonny v. Society of Lloyd’s, 3 F.3d 156, 159 (7th Cir. 1993);","paragraphs":["para_150"]},{"title":"(7th Cir. 2003); Hugel v. Corp. of Lloyd’s, 999 F.2d 206, 207 (7th","paragraphs":["para_152"]},{"title":"6 No. 20-2244","paragraphs":[]},{"title":"375 (7th Cir. 1990). Because the district court based its decision","paragraphs":["para_155","para_156"]},{"title":"III. Applying Delaware Corporation Law","paragraphs":[]},{"title":"The most straightforward resolution of this appeal is un-","paragraphs":["para_159","para_160","para_161","para_162"]},{"title":"Act claim and then in Part III-B the relevant Delaware statutes","paragraphs":["para_164"]},{"title":"A. Plaintiff’s Derivative Claims Under the Exchange Act of","paragraphs":[]},{"title":"1934","paragraphs":[]},{"title":"Plaintiff’s derivative suit under Section 14(a) is straightfor-","paragraphs":["para_168"]},{"title":"Rule 14a-9, prohibit material misstatements or omissions in a","paragraphs":["para_170"]},{"title":"9(a). To state a claim under Section 14(a), a plaintiff must al-","paragraphs":["para_172","para_173"]},{"title":"(iii) that the proxy solicitation itself, rather than the particular","paragraphs":["para_175","para_176"]},{"title":"U.S. 375, 384–85 (1970). As noted, the Exchange Act provides","paragraphs":["para_178","para_179","para_180","para_181","para_182","para_183"]},{"title":"No. 20-2244 7","paragraphs":[]},{"title":"In a derivative suit under Section 14(a), the theory “is that","paragraphs":["para_186","para_187","para_188"]},{"title":"314, 316–17 (7th Cir. 2012). A derivative suit is considered “an","paragraphs":["para_190","para_191","para_192","para_193"]},{"title":"Bernhard, 396 U.S. 531, 534 (1970); Lefkovitz v. Wagner, 395 F.3d","paragraphs":[]},{"title":"773, 776 (7th Cir. 2005), quoting Kennedy v. Venrock Assocs., 348","paragraphs":["para_196"]},{"title":"Here, plaintiff alleges that the false and misleading proxy","paragraphs":["para_198","para_199","para_200","para_201","para_202","para_203","para_204","para_205"]},{"title":"Regardless of the ultimate merits of the claims, plaintiff’s","paragraphs":["para_207","para_208","para_209"]},{"title":"Boeing’s forum bylaw. If it can be applied to this case, the by-","paragraphs":["para_211","para_212","para_213"]},{"title":"1238, 1247−48 (8th Cir. 2013). If that’s correct, checkmate for","paragraphs":["para_215"]},{"title":"8 No. 20-2244","paragraphs":[]},{"title":"Section 29(a) of the Exchange Act, which deems void contrac-","paragraphs":["para_218","para_219"]},{"title":"B. Delaware Corporation Law on Forum-Selection Bylaws","paragraphs":[]},{"title":"We read Delaware corporation law as rejecting Boeing’s","paragraphs":["para_222","para_223"]},{"title":"General Corporation Law addresses specifically bylaws that","paragraphs":["para_225","para_226","para_227","para_228","para_229","para_230","para_231","para_232","para_233","para_234","para_235"]},{"title":"For present purposes, the two key phrases in Section 115","paragraphs":["para_237","para_238","para_239","para_240"]},{"title":"U.S.C. § 78cc(a). Further, federal courts in Delaware are courts","paragraphs":["para_242","para_243","para_244","para_245"]},{"title":"No. 20-2244 9","paragraphs":["para_247","para_248","para_249"]},{"title":"Amendments to the Delaware General Corporation Law an-","paragraphs":["para_251","para_252","para_253","para_254","para_255"]},{"title":"Court.” S.B. 75, 148th Gen. Assemb., Reg. Sess. (Del. 2015)","paragraphs":[]},{"title":"(synopsis). By eliminating federal jurisdiction over the Seafar-","paragraphs":["para_258","para_259","para_260","para_261"]},{"title":"Second, while we might hesitate to place decisive weight","paragraphs":["para_263","para_264"]},{"title":"Court’s and our understanding of the Delaware statute. The","paragraphs":[]},{"title":"United States District Court and Bankruptcy Court for the","paragraphs":["para_267","para_268"]},{"title":"227 A.3d 102, 119 (Del. 2020), the Delaware Supreme Court","paragraphs":["para_270"]},{"title":"2 Delaware law holds that a bill synopsis is a proper source from","paragraphs":["para_272","para_273","para_274"]},{"title":"1981). Section 115 as enacted was not materially different from the lan-","paragraphs":["para_276"]},{"title":"10 No. 20-2244","paragraphs":["para_278","para_279"]},{"title":"If the statute had said “courts of this State,” the statutory","paragraphs":["para_281","para_282","para_283","para_284","para_285","para_286","para_287","para_288"]},{"title":"330 F.3d 396, 398 (5th Cir. 2003)); cf. Regis Associates v. Rank","paragraphs":[]},{"title":"Hotels (Management) Ltd., 894 F.2d 193, 195−96 (6th Cir. 1990)","paragraphs":[]},{"title":"(construing contractual clause consenting to “jurisdiction of","paragraphs":["para_292","para_293"]},{"title":"Similarly, for example, the federal Tax Injunction Act bars fed-","paragraphs":["para_295","para_296","para_297","para_298","para_299","para_300","para_301","para_302"]},{"title":"From these signals in the statutory text and Delaware case","paragraphs":["para_304","para_305","para_306","para_307"]},{"title":"No. 20-2244 11","paragraphs":[]},{"title":"Defendants counter that Section 115 does not matter be-","paragraphs":["para_310","para_311","para_312","para_313","para_314","para_315","para_316","para_317"]},{"title":"We start with the general principle, which Delaware law","paragraphs":["para_319"]},{"title":"115 for bylaws with forum-selection clauses, ordinarily take","paragraphs":["para_321"]},{"title":"E.g., Turnbull v. Fink, 668 A.2d 1370, 1377 (Del. 1995) (“Where","paragraphs":["para_323","para_324","para_325","para_326","para_327","para_328","para_329"]},{"title":"Defendants counter that principle, however, by arguing","paragraphs":["para_331"]},{"title":"Delaware Supreme Court held that the more general Section","paragraphs":[]},{"title":"109 actually provides broader authorizations than Section","paragraphs":[]},{"title":"115. Defendants read too much into Salzberg, which does not","paragraphs":["para_335"]},{"title":"Salzberg, several Delaware corporations wrote charters with","paragraphs":["para_337","para_338","para_339"]},{"title":"12 No. 20-2244","paragraphs":["para_341","para_342","para_343","para_344"]},{"title":"A shareholder brought a facial challenge to those federal","paragraphs":["para_346","para_347"]},{"title":"Salzberg held only that the challenged provisions were facially","paragraphs":["para_349","para_350","para_351","para_352"]},{"title":"Accordingly, Salzberg neither applies to claims brought","paragraphs":["para_354","para_355","para_356"]},{"title":"109 (or Section 102(b)(1), for that matter) to allow application","paragraphs":["para_358","para_359","para_360","para_361","para_362","para_363","para_364","para_365","para_366","para_367","para_368","para_369"]},{"title":"Defendants also contend that in Boilermakers Local 154 Re-","paragraphs":["para_371"]},{"title":"No. 20-2244 13","paragraphs":[]},{"title":"Delaware Court of Chancery held that Section 109(b) author-","paragraphs":["para_374","para_375","para_376","para_377","para_378","para_379","para_380"]},{"title":"Plaintiffs were shareholders of Chevron and FedEx who","paragraphs":["para_382","para_383","para_384"]},{"title":"The Court of Chancery rejected the facial challenges, empha-","paragraphs":["para_386","para_387","para_388"]},{"title":"In so holding, the court offered important observations","paragraphs":["para_390","para_391","para_392","para_393","para_394","para_395","para_396"]},{"title":"First, the Court of Chancery noted that Section 109(b) “has","paragraphs":["para_398","para_399","para_400","para_401"]},{"title":"1933). Generally speaking, the court continued, forum bylaws","paragraphs":["para_403"]},{"title":"14 No. 20-2244","paragraphs":["para_405"]},{"title":"73 A.3d at 951, quoting CA, Inc. v. AFSCME Emps. Pension","paragraphs":[]},{"title":"Plan, 953 A.2d 227, 236–37 (Del. 2008). The court determined","paragraphs":["para_408","para_409"]},{"title":"Delaware (Chevron) and in the Delaware Court of Chancery","paragraphs":[]},{"title":"(FedEx)—also fit that description: they regulated “where","paragraphs":["para_412","para_413","para_414"]},{"title":"A.3d at 952; see also Salzberg, 227 A.3d at 115 n.51 (reiterating","paragraphs":[]},{"title":"Boilermakers Fund point that forum bylaws may regulate","paragraphs":["para_417"]},{"title":"The Boilermakers Fund court then provided important","paragraphs":["para_419","para_420","para_421","para_422","para_423","para_424","para_425","para_426","para_427","para_428","para_429","para_430","para_431"]},{"title":"The plaintiffs asked a hypothetical question. Suppose the","paragraphs":["para_433","para_434","para_435"]},{"title":"No. 20-2244 15","paragraphs":[]},{"title":"Court of Chancery explained that in such a case, the board","paragraphs":["para_438"]},{"title":"First, a claim by a stockholder under federal law","paragraphs":["para_440","para_441","para_442","para_443","para_444","para_445","para_446","para_447","para_448","para_449","para_450","para_451"]},{"title":"Securities Exchange Act, such a waiver would","paragraphs":["para_453","para_454"]},{"title":"Id. at 962 (footnotes omitted). The first reason would not apply","paragraphs":["para_456","para_457","para_458","para_459","para_460","para_461","para_462","para_463"]},{"title":"In future cases, Delaware courts may address broader","paragraphs":["para_465","para_466","para_467"]},{"title":"16 No. 20-2244","paragraphs":["para_469","para_470","para_471","para_472","para_473","para_474"]},{"title":"962. No Delaware law, at least to our knowledge, authorizes","paragraphs":["para_476"]},{"title":"Fund, and the new Section 115 codifying that decision signal","paragraphs":["para_478","para_479","para_480"]},{"title":"IV. Distinguishing Bremen and Bonny","paragraphs":[]},{"title":"To avoid this result, defendants also argue that they seek","paragraphs":["para_483","para_484"]},{"title":"U.S. 1 (1972), and Bonny v. Society of Lloyd’s, 3 F.3d 156 (7th","paragraphs":[]},{"title":"Cir. 1993). The district court looked carefully at both cases and","paragraphs":["para_487","para_488","para_489","para_490","para_491","para_492","para_493","para_494","para_495","para_496","para_497","para_498","para_499"]},{"title":"No. 20-2244 17","paragraphs":["para_501","para_502","para_503","para_504","para_505","para_506","para_507","para_508"]},{"title":"The Supreme Court reversed, teaching that such forum-","paragraphs":["para_510","para_511","para_512"]},{"title":"U.S. at 10. The Court explained that there were “compelling","paragraphs":["para_514","para_515","para_516"]},{"title":"In the Bremen opinion itself, the Court emphasized the","paragraphs":["para_518","para_519","para_520"]},{"title":"Bremen stands for the broader proposition that contractually","paragraphs":["para_522","para_523"]},{"title":"49, 62−64 (2013); Mueller, 880 F.3d at 894, quoting Atlantic","paragraphs":[]},{"title":"Marine, 571 U.S. at 64 (“forum-selection clauses should","paragraphs":["para_526"]},{"title":"Bremen differs from this case most importantly in that it","paragraphs":["para_528","para_529","para_530"]},{"title":"Exchange Act. While the Supreme Court has generally been","paragraphs":[]},{"title":"18 No. 20-2244","paragraphs":["para_533","para_534","para_535","para_536","para_537"]},{"title":"473 U.S. 614 (1985), Chrysler asserted claims against","paragraphs":[]},{"title":"Mitsubishi, including an antitrust claim under United States","paragraphs":["para_540"]},{"title":"Japan. The Supreme Court enforced the clause and ordered","paragraphs":["para_542","para_543","para_544","para_545","para_546","para_547","para_548"]},{"title":"The agreement between Mitsubishi and Chrysler also said","paragraphs":["para_550","para_551","para_552","para_553","para_554","para_555"]},{"title":"Court in oral argument that it was not trying to avoid","paragraphs":["para_557","para_558","para_559","para_560","para_561","para_562","para_563"]},{"title":"No. 20-2244 19","paragraphs":[]},{"title":"That considered warning carries even more force in this case","paragraphs":["para_566","para_567","para_568","para_569","para_570"]},{"title":"Turning to this court’s decision in Bonny v. Society of","paragraphs":[]},{"title":"Lloyd’s, defendants emphasize that we enforced choice-of-law","paragraphs":["para_573","para_574","para_575","para_576","para_577","para_578","para_579","para_580"]},{"title":"The plaintiffs in Bonny were United States citizens who","paragraphs":["para_582","para_583","para_584","para_585","para_586","para_587","para_588"]},{"title":"Act of 1933 and Section 10(b) of the Exchange Act of 1934. The","paragraphs":["para_590","para_591","para_592"]},{"title":"States public policy and were therefore enforceable despite","paragraphs":["para_594","para_595"]},{"title":"20 No. 20-2244","paragraphs":[]},{"title":"The lack of a true conflict between English law and appli-","paragraphs":["para_598"]},{"title":"161–62. First, citing Bremen, we noted that choice-of-law and","paragraphs":["para_600","para_601","para_602","para_603"]},{"title":"407 U.S. at 10. The plaintiffs in Bonny, much like the plaintiffs","paragraphs":["para_605","para_606","para_607","para_608","para_609","para_610","para_611","para_612"]},{"title":"Even so, we harbored “serious concerns that Lloyd’s","paragraphs":["para_614","para_615","para_616","para_617","para_618"]},{"title":"Bonny, 3 F.3d at 160–61.3 The international nature of the trans-","paragraphs":["para_620","para_621"]},{"title":"3 In Bonny, the record showed that English law afforded plaintiffs a","paragraphs":["para_623"]},{"title":"Act of 1934 and Rule 10b-5. 3 F.3d at 161. There were no English rights and","paragraphs":["para_625","para_626"]},{"title":"No. 20-2244 21","paragraphs":["para_628","para_629"]},{"title":"Defendants argue that we should extend the same","paragraphs":["para_631","para_632","para_633","para_634","para_635","para_636","para_637","para_638","para_639","para_640","para_641"]},{"title":"There is no hint in Bonny that the same logic and result","paragraphs":["para_643"]},{"title":"4 Bonny is consistent with decisions in other circuits balancing these","paragraphs":["para_645","para_646","para_647"]},{"title":"States courts should “tread cautiously before expanding the operation of","paragraphs":[]},{"title":"U.S. securities law in the international arena,” particularly “in the case of","paragraphs":[]},{"title":"England, a forum that American courts repeatedly have recognized to be","paragraphs":["para_651","para_652","para_653","para_654"]},{"title":"1992); AVC Nederland B.V. v. Atrium Inv. P’ship, 740 F.2d 148, 158–59 (2d","paragraphs":[]},{"title":"Cir. 1984) (Section 29(a) did not prevent enforcement of choice of Dutch","paragraphs":["para_657","para_658"]},{"title":"247 (2010), which limited extraterritorial application of United States se-","paragraphs":["para_660"]},{"title":"22 No. 20-2244","paragraphs":["para_662","para_663","para_664","para_665","para_666","para_667","para_668","para_669","para_670","para_671"]},{"title":"As applied to plaintiff’s Section 14(a) claims, Boeing’s","paragraphs":["para_673","para_674","para_675","para_676","para_677","para_678","para_679","para_680"]},{"title":"And that law is binding—especially where, as here, there are","paragraphs":["para_682"]},{"title":"Accord, Luce v. Edelstein, 802 F.2d 49, 57 (2d Cir. 1986) (forum-","paragraphs":["para_684","para_685","para_686"]},{"title":"LLC v. Iterative Capital Mgmt. L.P., 2020 WL 7251172, at *9","paragraphs":[]},{"title":"(S.D.N.Y. June 29, 2020) (following Luce, retaining Exchange","paragraphs":["para_689"]},{"title":"Bonny required a choice between United States law and","paragraphs":["para_691","para_692"]},{"title":"No. 20-2244 23","paragraphs":[]},{"title":"Delaware state law and policy. After all, under the Supremacy","paragraphs":[]},{"title":"Clause of the United States Constitution, state courts enforce","paragraphs":["para_696"]},{"title":"93 U.S. 130, 136 (1876) (“The law of the United States are laws","paragraphs":["para_698","para_699","para_700","para_701","para_702"]},{"title":"Assocs., 277 F.3d 936, 942 (7th Cir. 2002) (Illinois courts would","paragraphs":["para_704"]},{"title":"Illinois public policy where employer fired employee for","paragraphs":["para_706"]},{"title":"Delaware Court of Chancery’s opinion in Boilermakers Fund","paragraphs":["para_708","para_709"]},{"title":"Instead, as noted, the Court of Chancery said that the","paragraphs":["para_711"]},{"title":"Exchange Act’s anti-waiver provision in Section 29 if they","paragraphs":["para_713","para_714"]},{"title":"Finally, our dissenting colleague proposes an entirely dif-","paragraphs":["para_716"]},{"title":"5 For all of these reasons, we respectfully disagree with relevant","paragraphs":["para_718","para_719","para_720","para_721","para_722","para_723","para_724","para_725"]},{"title":"24 No. 20-2244","paragraphs":["para_727","para_728","para_729","para_730","para_731","para_732","para_733"]},{"title":"That solution, however, is not consistent with our reading of","paragraphs":["para_735","para_736","para_737","para_738","para_739","para_740"]},{"title":"Notably, defendants have not advocated for the dissent’s","paragraphs":["para_742"]},{"title":"The defendants have instead argued all along for their pre-","paragraphs":["para_744"]},{"title":"Section 14(a) claim in any forum. Also, the dissent does not","paragraphs":["para_746","para_747","para_748","para_749","para_750","para_751"]},{"title":"1247−48 (8th Cir. 2013) (reversing Colorado River abstention","paragraphs":["para_753","para_754","para_755"]},{"title":"It may or may not be true, as the dissent suggests, that Del-","paragraphs":["para_757"]},{"title":"No. 20-2244 25","paragraphs":["para_759"]},{"title":"We decline to speculate on the point because Delaware has","paragraphs":["para_761","para_762","para_763","para_764"]},{"title":"The judgment of the district court is REVERSED and the","paragraphs":["para_766","para_767"]},{"title":"26 No. 20-2244","paragraphs":[]},{"title":"EASTERBROOK, Circuit Judge, dissenting. Page 2 of my col-","paragraphs":["para_770"]},{"title":"Exchange Act gives federal courts exclusive jurisdiction over","paragraphs":["para_772","para_773","para_774"]},{"title":"Yet plaintiff retains its right to sue directly under §14(a) in","paragraphs":["para_776","para_777","para_778","para_779"]},{"title":"Section 14(a), 15 U.S.C. §78n(a), says that it is unlawful for","paragraphs":["para_781","para_782","para_783","para_784","para_785","para_786"]},{"title":"Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083 (1991); Piper","paragraphs":["para_788","para_789","para_790","para_791","para_792"]},{"title":"Recall what a derivative action is. An investor who wants","paragraphs":["para_794","para_795","para_796","para_797","para_798","para_799"]},{"title":"No. 20-2244 27","paragraphs":[]},{"title":"(perhaps represented by the investor as its agent) litigates","paragraphs":["para_802","para_803","para_804"]},{"title":"Financial Services, Inc., 500 U.S. 90 (1991), holds with respect to","paragraphs":["para_806","para_807","para_808","para_809","para_810","para_811","para_812","para_813","para_814","para_815","para_816","para_817"]},{"title":"Suppose Delaware were to abolish derivative suits. Inves-","paragraphs":["para_819","para_820","para_821","para_822","para_823","para_824","para_825","para_826","para_827"]},{"title":"Virginia Bankshares holds that the existence of a private","paragraphs":["para_829","para_830","para_831"]},{"title":"28 No. 20-2244","paragraphs":[]},{"title":"The Supreme Court has never held or even intimated that","paragraphs":["para_834","para_835"]},{"title":"Co. v. Borak, 377 U.S. 426, 432 (1964), holds that §14 supports","paragraphs":["para_837","para_838","para_839"]},{"title":"Virginia Bankshares treats Borak as limited to its facts and","paragraphs":["para_841"]},{"title":"In the 30 years since, the Justices have told us that the days of","paragraphs":["para_843"]},{"title":"See, e.g., Jesner v. Arab Bank, PLC, 138 S. Ct. 1386, 1402 (2018)","paragraphs":[]},{"title":"(describing the Court’s “reluctance to extend judicially cre-","paragraphs":["para_846","para_847","para_848"]},{"title":"As for the supposed exclusivity of jurisdiction under the","paragraphs":[]},{"title":"Exchange Act: since per Kamen at least the first two steps rest","paragraphs":["para_851","para_852","para_853","para_854","para_855","para_856","para_857","para_858","para_859","para_860","para_861","para_862"]},{"title":"No. 20-2244 29","paragraphs":["para_864","para_865"]},{"title":"Section 27(a) of the Exchange Act, 15 U.S.C. §78aa(a), pro-","paragraphs":["para_867","para_868","para_869","para_870"]},{"title":"482 U.S. 220 (1987), treats exclusivity under §27(a) as a right","paragraphs":["para_872","para_873","para_874","para_875"]},{"title":"McMahon’s reasoning means that other forum-selection","paragraphs":["para_877","para_878"]},{"title":"Alberto-Culver Co., 417 U.S. 506 (1974), held to be compatible","paragraphs":["para_880","para_881","para_882","para_883"]},{"title":"2014).) The bylaw waives any right to exclusive federal juris-","paragraphs":["para_885","para_886","para_887"]},{"title":"Any doubt could be resolved by decomposing a derivative","paragraphs":["para_889","para_890","para_891","para_892","para_893","para_894"]},{"title":"30 No. 20-2244","paragraphs":["para_896"]},{"title":"McMahon, or Virginia Bankshares. The principle of party","paragraphs":["para_898","para_899"]},{"title":"Ct. 1575 (2020). Yet Boeing has vigorously defended the va-","paragraphs":["para_901","para_902","para_903","para_904","para_905"]},{"title":"Kamen concerns the appropriate treatment of parties’ mis-","paragraphs":["para_907","para_908","para_909","para_910","para_911","para_912","para_913","para_914","para_915","para_916","para_917"]},{"title":"None of what I have said so far would matter if, as the","paragraphs":["para_919","para_920","para_921","para_922"]},{"title":"Read on its own terms, 8 Del. Code §115 does not prohibit","paragraphs":[]},{"title":"Boeing’s bylaw. The statute provides:","paragraphs":[]},{"title":"The certificate of incorporation or the bylaws may require, con-","paragraphs":["para_926"]},{"title":"No. 20-2244 31","paragraphs":["para_928","para_929","para_930","para_931","para_932","para_933","para_934","para_935"]},{"title":"This does not prohibit bylaws that limit derivative claims to","paragraphs":["para_937","para_938","para_939"]},{"title":"Suppose we treat plaintiffs’ derivative suit as something","paragraphs":["para_941","para_942","para_943"]},{"title":"The most authoritative word about the meaning of §115","paragraphs":["para_945"]},{"title":"Section 115 merely confirms affirmatively … that a charter may","paragraphs":["para_947","para_948","para_949"]},{"title":"State.” Section 115, read fairly, does not address the propriety of","paragraphs":["para_951","para_952","para_953","para_954","para_955"]},{"title":"Salzberg v. Sciabacucchi, 227 A.3d 102, 119 (Del. 2020). This tells","paragraphs":["para_957","para_958","para_959","para_960"]},{"title":"32 No. 20-2244","paragraphs":[]},{"title":"Salzberg directs courts to look outside §115 unless the bylaw","paragraphs":["para_963","para_964","para_965","para_966"]},{"title":"I accept my colleagues’ observation that federal district","paragraphs":["para_968","para_969","para_970","para_971","para_972","para_973","para_974","para_975","para_976","para_977"]},{"title":"Their beginning is a belief that the bylaw coupled with §27(a)","paragraphs":["para_979","para_980","para_981","para_982","para_983","para_984","para_985"]}],"paragraphs":[{"text":"In the","paragraph_id":"para_1"},{"text":"United States Court of Appeals","paragraph_id":"para_2"},{"text":"For the Seventh Circuit","paragraph_id":"para_3"},{"text":"____________________","paragraph_id":"para_4"},{"text":"No. 20-2244","paragraph_id":"para_5"},{"text":"SEAFARERS PENSION PLAN,","paragraph_id":"para_6"},{"text":"derivatively on behalf of The Boeing Company,","paragraph_id":"para_7"},{"text":"Plaintiff-Appellant,","paragraph_id":"para_8"},{"text":"v.","paragraph_id":"para_9"},{"text":"ROBERT A. BRADWAY, et al.,","paragraph_id":"para_10"},{"text":"Defendants-Appellees,","paragraph_id":"para_11"},{"text":"and","paragraph_id":"para_12"},{"text":"THE BOEING COMPANY,","paragraph_id":"para_13"},{"text":"Nominal Defendant-Appellee.","paragraph_id":"para_14"},{"text":"____________________","paragraph_id":"para_15"},{"text":"Appeal from the United States District Court for the","paragraph_id":"para_16"},{"text":"Northern District of Illinois, Eastern Division.","paragraph_id":"para_17"},{"text":"No. 1:19-CV-08095 — Harry D. Leinenweber, Judge.","paragraph_id":"para_18"},{"text":"____________________","paragraph_id":"para_19"},{"text":"ARGUED NOVEMBER 30, 2020 — DECIDED JANUARY 7, 2022","paragraph_id":"para_20"},{"text":"____________________","paragraph_id":"para_21"},{"text":"Before EASTERBROOK, WOOD, and HAMILTON, Circuit","paragraph_id":"para_22"},{"text":"Judges.","paragraph_id":"para_23"},{"text":"HAMILTON, Circuit Judge. On October 29, 2018, a Boeing","paragraph_id":"para_24"},{"text":"737 MAX airliner crashed in the sea near Indonesia, killing","paragraph_id":"para_25"},{"text":"2 No. 20-2244","paragraph_id":"para_26"},{"text":"everyone on board. A few months later, on March 10, 2019, a","paragraph_id":"para_27"},{"text":"second 737 MAX crashed in Ethiopia, again killing everyone","paragraph_id":"para_28"},{"text":"on board. Within days of the second crash, all 737 MAX air-","paragraph_id":"para_29"},{"text":"liners around the world were grounded. The United States","paragraph_id":"para_30"},{"text":"Federal Aviation Administration kept the planes grounded","paragraph_id":"para_31"},{"text":"until November 18, 2020, when it was satisfied that serious","paragraph_id":"para_32"},{"text":"problems with the planes’ flight control systems had been cor-","paragraph_id":"para_33"},{"text":"rected.","paragraph_id":"para_34"},{"text":"In December 2019, plaintiff Seafarers Pension Plan, a","paragraph_id":"para_35"},{"text":"shareholder of the Boeing Company, filed this derivative suit","paragraph_id":"para_36"},{"text":"on behalf of Boeing under Section 14(a) of the Securities Ex-","paragraph_id":"para_37"},{"text":"change Act of 1934, 15 U.S.C. § 78n(a)(1). The suit alleges that","paragraph_id":"para_38"},{"text":"Boeing officers and board members made materially false and","paragraph_id":"para_39"},{"text":"misleading public statements about the development and op-","paragraph_id":"para_40"},{"text":"eration of the 737 MAX in Boeing’s 2017, 2018, and 2019 proxy","paragraph_id":"para_41"},{"text":"materials. The district court dismissed the suit without ad-","paragraph_id":"para_42"},{"text":"dressing the merits, applying a Boeing bylaw that gives the","paragraph_id":"para_43"},{"text":"company the right to insist that any derivative actions be filed","paragraph_id":"para_44"},{"text":"in the Delaware Court of Chancery. We reverse. Because the","paragraph_id":"para_45"},{"text":"federal Exchange Act gives federal courts exclusive jurisdic-","paragraph_id":"para_46"},{"text":"tion over actions under it, applying the bylaw to this case","paragraph_id":"para_47"},{"text":"would mean that plaintiff’s derivative Section 14(a) action","paragraph_id":"para_48"},{"text":"may not be heard in any forum. That result would be contrary","paragraph_id":"para_49"},{"text":"to Delaware corporation law, which respects the non-waiver","paragraph_id":"para_50"},{"text":"provision in Section 29(a) of the federal Exchange Act, 15","paragraph_id":"para_51"},{"text":"U.S.C. § 78cc(a).","paragraph_id":"para_52"},{"text":"I. Factual and Procedural Background","paragraph_id":"para_53"},{"text":"The Boeing Company is an international aerospace com-","paragraph_id":"para_54"},{"text":"pany headquartered in Illinois and incorporated under Dela-","paragraph_id":"para_55"},{"text":"ware law. Plaintiff Seafarers Pension Plan is a Boeing share-","paragraph_id":"para_56"},{"text":"holder. In addition to the loss of 346 lives, the 737 MAX","paragraph_id":"para_57"},{"text":"No. 20-2244 3","paragraph_id":"para_58"},{"text":"accidents and the subsequent grounding of all 737 MAX","paragraph_id":"para_59"},{"text":"planes and ensuing investigations and litigation will end up","paragraph_id":"para_60"},{"text":"costing Boeing billions of dollars. This case is a part of that","paragraph_id":"para_61"},{"text":"larger picture, but it presents issues that do not call upon us","paragraph_id":"para_62"},{"text":"to address the merits of plaintiff’s claims or their role in the","paragraph_id":"para_63"},{"text":"larger aftermath of the 737 MAX crashes.","paragraph_id":"para_64"},{"text":"The Seafarers Plan filed this derivative suit under Section","paragraph_id":"para_65"},{"text":"14(a) of the Securities Exchange Act of 1934 alleging that Boe-","paragraph_id":"para_66"},{"text":"ing’s current and former officers and directors disseminated","paragraph_id":"para_67"},{"text":"materially false and misleading proxy statements from 2017","paragraph_id":"para_68"},{"text":"through 2019. See 15 U.S.C. § 78n(a)(1); 17 C.F.R. § 240.14a-9.","paragraph_id":"para_69"},{"text":"The Exchange Act gives federal courts exclusive jurisdiction","paragraph_id":"para_70"},{"text":"over suits filed under the Act. 15 U.S.C. § 78aa. The Seafarers","paragraph_id":"para_71"},{"text":"Plan therefore filed its complaint in the Northern District of","paragraph_id":"para_72"},{"text":"Illinois, where Boeing is headquartered.","paragraph_id":"para_73"},{"text":"The defendants moved to dismiss based on the doctrine of","paragraph_id":"para_74"},{"text":"forum non conveniens, invoking a Boeing bylaw that pro-","paragraph_id":"para_75"},{"text":"vides in relevant part:","paragraph_id":"para_76"},{"text":"With respect to any action arising out of any act","paragraph_id":"para_77"},{"text":"or omission occurring after the adoption of this","paragraph_id":"para_78"},{"text":"By-Law, unless the Corporation consents in","paragraph_id":"para_79"},{"text":"writing to the selection of an alternative forum,","paragraph_id":"para_80"},{"text":"the Court of Chancery of the State of Delaware","paragraph_id":"para_81"},{"text":"shall be the sole and exclusive forum for … any","paragraph_id":"para_82"},{"text":"derivative action or proceeding brought on be-","paragraph_id":"para_83"},{"text":"half of the Corporation … .","paragraph_id":"para_84"},{"text":"The defendants conceded that enforcement of the forum by-","paragraph_id":"para_85"},{"text":"law would foreclose the Seafarers Plan’s federal derivative","paragraph_id":"para_86"},{"text":"suit entirely. They argued, however, that Delaware law of-","paragraph_id":"para_87"},{"text":"fered a sufficient substitute that would allow the Seafarers","paragraph_id":"para_88"},{"text":"4 No. 20-2244","paragraph_id":"para_89"},{"text":"Plan to vindicate its substantive rights under the Exchange","paragraph_id":"para_90"},{"text":"Act of 1934. The district court agreed with defendants and dis-","paragraph_id":"para_91"},{"text":"missed the suit. Seafarers Pension Plan v. Bradway, 2020 WL","paragraph_id":"para_92"},{"text":"3246326, at *4 (N.D. Ill. June 8, 2020).1","paragraph_id":"para_93"},{"text":"Applying the forum bylaw to this case is contrary to Del-","paragraph_id":"para_94"},{"text":"aware corporation law and federal securities law. In Part III,","paragraph_id":"para_95"},{"text":"we explain that the forum bylaw is unenforceable as applied","paragraph_id":"para_96"},{"text":"to this case because its application would violate Section 115","paragraph_id":"para_97"},{"text":"of the Delaware General Corporation Law. Delaware corpo-","paragraph_id":"para_98"},{"text":"ration law gives corporations considerable leeway in writing","paragraph_id":"para_99"},{"text":"bylaws, including bylaws with choice-of-forum provisions,","paragraph_id":"para_100"},{"text":"but it respects federal securities law and does not empower","paragraph_id":"para_101"},{"text":"corporations to use such techniques to opt out of the Ex-","paragraph_id":"para_102"},{"text":"change Act. In Part IV, we address the cases the district court","paragraph_id":"para_103"},{"text":"relied upon to grant dismissal. Before we discuss the merits,","paragraph_id":"para_104"},{"text":"however, we address in Part II the appropriate standard of re-","paragraph_id":"para_105"},{"text":"view.","paragraph_id":"para_106"},{"text":"II. Standard of Review","paragraph_id":"para_107"},{"text":"The Seafarers Plan argues that we should decide de novo","paragraph_id":"para_108"},{"text":"the legal question whether the forum bylaw is enforceable.","paragraph_id":"para_109"},{"text":"Defendants argue that dismissal on forum non conveniens","paragraph_id":"para_110"},{"text":"grounds should be reviewed more deferentially, only for an","paragraph_id":"para_111"},{"text":"abuse of discretion. We have often said that forum non","paragraph_id":"para_112"},{"text":"conveniens calls for a trial court to exercise its sound","paragraph_id":"para_113"},{"text":"discretion and that we review such dismissals or denials of","paragraph_id":"para_114"},{"text":"1 Along with its federal claims, the Seafarers Plan initially alleged","paragraph_id":"para_115"},{"text":"claims under Delaware law for breaches of fiduciary duty and unjust en-","paragraph_id":"para_116"},{"text":"richment. Once the defendants invoked the forum bylaw, the parties","paragraph_id":"para_117"},{"text":"agreed to dismiss the state-law claims without prejudice to allow refiling","paragraph_id":"para_118"},{"text":"in state court in Delaware.","paragraph_id":"para_119"},{"text":"No. 20-2244 5","paragraph_id":"para_120"},{"text":"dismissals for abuse of discretion. E.g., Mueller v. Apple Leisure","paragraph_id":"para_121"},{"text":"Corp., 880 F.3d 890, 893–94 (7th Cir. 2018), quoting Deb v.","paragraph_id":"para_122"},{"text":"SIRVA, Inc., 832 F.3d 800, 805 (7th Cir. 2016); see also Piper","paragraph_id":"para_123"},{"text":"Aircraft Co. v. Reyno, 454 U.S. 235, 257, 261 (1981) (finding no","paragraph_id":"para_124"},{"text":"abuse of discretion in granting dismissal in tort case in U.S.","paragraph_id":"para_125"},{"text":"court arising from aircraft crash in Scotland). If we were","paragraph_id":"para_126"},{"text":"dealing with an ordinary choice-of-forum clause in a contract,","paragraph_id":"para_127"},{"text":"that standard would apply.","paragraph_id":"para_128"},{"text":"The specific problem here is different, calling for what","paragraph_id":"para_129"},{"text":"amounts to de novo review. Boeing’s forum bylaw presents","paragraph_id":"para_130"},{"text":"only questions of law, which we ordinarily review de novo.","paragraph_id":"para_131"},{"text":"The district court explained that it dismissed this case because","paragraph_id":"para_132"},{"text":"it concluded, as a matter of law, that the Boeing forum bylaw","paragraph_id":"para_133"},{"text":"was enforceable in this case. Seafarers Pension Plan, 2020 WL","paragraph_id":"para_134"},{"text":"3246326, at *4. In a wide range of contexts, we have explained","paragraph_id":"para_135"},{"text":"that if a district court exercises its discretion based on an","paragraph_id":"para_136"},{"text":"erroneous view of the law, it will necessarily abuse its","paragraph_id":"para_137"},{"text":"discretion. See, e.g., Cassell v. Snyders, 990 F.3d 539, 545 (7th","paragraph_id":"para_138"},{"text":"Cir. 2021), quoting Abbott Labs v. Mead Johnson & Co., 971 F.2d","paragraph_id":"para_139"},{"text":"6, 13 (7th Cir. 1992) (in deciding preliminary injunction","paragraph_id":"para_140"},{"text":"motion, “district court ‘abuses its discretion when it commits","paragraph_id":"para_141"},{"text":"… an error of law’”); Schleicher v. Wendt, 618 F.3d 679, 688 (7th","paragraph_id":"para_142"},{"text":"Cir. 2010) (holding “district court did not commit a legal error,","paragraph_id":"para_143"},{"text":"or abuse its discretion” in deciding that plaintiffs offered","paragraph_id":"para_144"},{"text":"sufficient evidence to invoke fraud-on-the-market theory to","paragraph_id":"para_145"},{"text":"prove reliance prong of Rule 10b-5 claim). In this context, it is","paragraph_id":"para_146"},{"text":"well-settled that the enforceability of a contract’s forum-","paragraph_id":"para_147"},{"text":"selection clause is a question of law that we review de novo.","paragraph_id":"para_148"},{"text":"E.g., Bonny v. Society of Lloyd’s, 3 F.3d 156, 159 (7th Cir. 1993);","paragraph_id":"para_149"},{"text":"see also Continental Ins. Co. v. M/V ORSULA, 354 F.3d 603, 607","paragraph_id":"para_150"},{"text":"(7th Cir. 2003); Hugel v. Corp. of Lloyd’s, 999 F.2d 206, 207 (7th","paragraph_id":"para_151"},{"text":"Cir. 1993); Northwestern Nat’l Ins. Co. v. Donovan, 916 F.2d 372,","paragraph_id":"para_152"},{"text":"6 No. 20-2244","paragraph_id":"para_153"},{"text":"375 (7th Cir. 1990). Because the district court based its decision","paragraph_id":"para_154"},{"text":"on its view of legal issues, de novo review of the governing","paragraph_id":"para_155"},{"text":"questions of law is appropriate here.","paragraph_id":"para_156"},{"text":"III. Applying Delaware Corporation Law","paragraph_id":"para_157"},{"text":"The most straightforward resolution of this appeal is un-","paragraph_id":"para_158"},{"text":"der Delaware corporation law, which we read as barring ap-","paragraph_id":"para_159"},{"text":"plication of the Boeing forum bylaw to this case invoking non-","paragraph_id":"para_160"},{"text":"waivable rights under the federal Exchange Act. We first ad-","paragraph_id":"para_161"},{"text":"dress in Part III-A the nature of plaintiff’s derivative Exchange","paragraph_id":"para_162"},{"text":"Act claim and then in Part III-B the relevant Delaware statutes","paragraph_id":"para_163"},{"text":"and case law on such forum-selection bylaws.","paragraph_id":"para_164"},{"text":"A. Plaintiff’s Derivative Claims Under the Exchange Act of","paragraph_id":"para_165"},{"text":"1934","paragraph_id":"para_166"},{"text":"Plaintiff’s derivative suit under Section 14(a) is straightfor-","paragraph_id":"para_167"},{"text":"ward. Section 14(a) and its implementing regulation, SEC","paragraph_id":"para_168"},{"text":"Rule 14a-9, prohibit material misstatements or omissions in a","paragraph_id":"para_169"},{"text":"proxy statement. 15 U.S.C. § 78n(a)(1); 17 C.F.R. § 240.14a-","paragraph_id":"para_170"},{"text":"9(a). To state a claim under Section 14(a), a plaintiff must al-","paragraph_id":"para_171"},{"text":"lege that (i) the proxy statement contained a material mis-","paragraph_id":"para_172"},{"text":"statement or omission, which (ii) caused plaintiff’s injury, and","paragraph_id":"para_173"},{"text":"(iii) that the proxy solicitation itself, rather than the particular","paragraph_id":"para_174"},{"text":"defect in the solicitation, was an essential link in the accom-","paragraph_id":"para_175"},{"text":"plishment of the transaction. Mills v. Electric Auto-Lite Co., 396","paragraph_id":"para_176"},{"text":"U.S. 375, 384–85 (1970). As noted, the Exchange Act provides","paragraph_id":"para_177"},{"text":"that only federal courts may exercise jurisdiction over claims","paragraph_id":"para_178"},{"text":"that arise under the Act. 15 U.S.C. § 78aa. Section 14(a) may","paragraph_id":"para_179"},{"text":"be enforced in private actions by shareholders asserting their","paragraph_id":"para_180"},{"text":"own rights and in derivative actions asserting rights of a cor-","paragraph_id":"para_181"},{"text":"poration harmed by a violation. J.I. Case Co. v. Borak, 377 U.S.","paragraph_id":"para_182"},{"text":"426, 431−32 (1964).","paragraph_id":"para_183"},{"text":"No. 20-2244 7","paragraph_id":"para_184"},{"text":"In a derivative suit under Section 14(a), the theory “is that","paragraph_id":"para_185"},{"text":"a corporation’s board has been so faithless to investors’ inter-","paragraph_id":"para_186"},{"text":"ests that investors must be allowed to pursue a claim in the","paragraph_id":"para_187"},{"text":"corporation’s name.” Robert F. Booth Trust v. Crowley, 687 F.3d","paragraph_id":"para_188"},{"text":"314, 316–17 (7th Cir. 2012). A derivative suit is considered “an","paragraph_id":"para_189"},{"text":"asset of the corporation” and permits “an individual share-","paragraph_id":"para_190"},{"text":"holder to bring ‘suit to enforce a corporate cause of action","paragraph_id":"para_191"},{"text":"against officers, directors, and third parties.’” Kamen v. Kemper","paragraph_id":"para_192"},{"text":"Financial Servs., Inc., 500 U.S. 90, 95 (1991), quoting Ross v.","paragraph_id":"para_193"},{"text":"Bernhard, 396 U.S. 531, 534 (1970); Lefkovitz v. Wagner, 395 F.3d","paragraph_id":"para_194"},{"text":"773, 776 (7th Cir. 2005), quoting Kennedy v. Venrock Assocs., 348","paragraph_id":"para_195"},{"text":"F.3d 584, 589 (7th Cir. 2003).","paragraph_id":"para_196"},{"text":"Here, plaintiff alleges that the false and misleading proxy","paragraph_id":"para_197"},{"text":"statements caused harm to Boeing by enabling the improper","paragraph_id":"para_198"},{"text":"re-election of directors who had for years tolerated poor over-","paragraph_id":"para_199"},{"text":"sight of passenger safety, regulatory compliance, and risk","paragraph_id":"para_200"},{"text":"management during the development of the 737 MAX air-","paragraph_id":"para_201"},{"text":"liner. Plaintiff further alleges that the proxy statements pro-","paragraph_id":"para_202"},{"text":"vided misleading recommendations to shareholders and","paragraph_id":"para_203"},{"text":"caused shareholders to vote down a shareholder proposal","paragraph_id":"para_204"},{"text":"calling for bifurcation of the CEO and chairman positions.","paragraph_id":"para_205"},{"text":"Regardless of the ultimate merits of the claims, plaintiff’s","paragraph_id":"para_206"},{"text":"chosen forum in the federal district where Boeing is head-","paragraph_id":"para_207"},{"text":"quartered seems appropriate for the case. To avoid that cho-","paragraph_id":"para_208"},{"text":"sen forum and defeat the claims entirely, defendants invoked","paragraph_id":"para_209"},{"text":"Boeing’s forum bylaw. If it can be applied to this case, the by-","paragraph_id":"para_210"},{"text":"law will force plaintiff to raise its claims in a Delaware state","paragraph_id":"para_211"},{"text":"court, which is not authorized to exercise jurisdiction over Ex-","paragraph_id":"para_212"},{"text":"change Act claims. 15 U.S.C. § 78aa; Cottrell v. Duke, 737 F.3d","paragraph_id":"para_213"},{"text":"1238, 1247−48 (8th Cir. 2013). If that’s correct, checkmate for","paragraph_id":"para_214"},{"text":"defendants. That result would be difficult to reconcile with","paragraph_id":"para_215"},{"text":"8 No. 20-2244","paragraph_id":"para_216"},{"text":"Section 29(a) of the Exchange Act, which deems void contrac-","paragraph_id":"para_217"},{"text":"tual waivers of compliance with the requirements of the Act.","paragraph_id":"para_218"},{"text":"15 U.S.C. § 78cc(a).","paragraph_id":"para_219"},{"text":"B. Delaware Corporation Law on Forum-Selection Bylaws","paragraph_id":"para_220"},{"text":"We read Delaware corporation law as rejecting Boeing’s","paragraph_id":"para_221"},{"text":"use of its forum bylaw to foreclose entirely plaintiff’s deriva-","paragraph_id":"para_222"},{"text":"tive action under Section 14(a). Section 115 of the Delaware","paragraph_id":"para_223"},{"text":"General Corporation Law addresses specifically bylaws that","paragraph_id":"para_224"},{"text":"impose choices of forums for litigation involving corporate af-","paragraph_id":"para_225"},{"text":"fairs. Section 115 provides in relevant part that “bylaws may","paragraph_id":"para_226"},{"text":"require, consistent with applicable jurisdictional require-","paragraph_id":"para_227"},{"text":"ments, that any or all internal corporate claims shall be","paragraph_id":"para_228"},{"text":"brought solely and exclusively in any or all of the courts in","paragraph_id":"para_229"},{"text":"this State.” 8 Del. C. § 115. Section 115 defines “internal cor-","paragraph_id":"para_230"},{"text":"porate claims” to include derivative claims like this one:","paragraph_id":"para_231"},{"text":"“claims, including claims in the right of the corporation, (i)","paragraph_id":"para_232"},{"text":"that are based upon a violation of a duty by a current or for-","paragraph_id":"para_233"},{"text":"mer director or officer or stockholder in such capacity … .” 8","paragraph_id":"para_234"},{"text":"Del. C. § 115.","paragraph_id":"para_235"},{"text":"For present purposes, the two key phrases in Section 115","paragraph_id":"para_236"},{"text":"are “consistent with applicable jurisdictional requirements”","paragraph_id":"para_237"},{"text":"and “courts in this State.” As applied here, Boeing’s forum by-","paragraph_id":"para_238"},{"text":"law violates Section 115 because it is inconsistent with the ju-","paragraph_id":"para_239"},{"text":"risdictional requirements of the Exchange Act of 1934, 15","paragraph_id":"para_240"},{"text":"U.S.C. § 78cc(a). Further, federal courts in Delaware are courts","paragraph_id":"para_241"},{"text":"“in” that State, as distinct from courts “of” that State. The stat-","paragraph_id":"para_242"},{"text":"utory language shows that Section 115 does not authorize ap-","paragraph_id":"para_243"},{"text":"plication of Boeing’s forum bylaw to close all courthouse","paragraph_id":"para_244"},{"text":"doors to this derivative action.","paragraph_id":"para_245"},{"text":"No. 20-2244 9","paragraph_id":"para_246"},{"text":"First, regarding the “jurisdictional requirements” phrase,","paragraph_id":"para_247"},{"text":"guidance from the Delaware General Assembly supports this","paragraph_id":"para_248"},{"text":"reading of Section 115. The synopsis accompanying the 2015","paragraph_id":"para_249"},{"text":"Amendments to the Delaware General Corporation Law an-","paragraph_id":"para_250"},{"text":"ticipated the question posed in this case. It cautioned that the","paragraph_id":"para_251"},{"text":"new Section 115 was “not intended to authorize a provision","paragraph_id":"para_252"},{"text":"that purports to foreclose suit in a federal court based on fed-","paragraph_id":"para_253"},{"text":"eral jurisdiction, nor is Section 115 intended to limit or expand","paragraph_id":"para_254"},{"text":"the jurisdiction of the Court of Chancery or the Superior","paragraph_id":"para_255"},{"text":"Court.” S.B. 75, 148th Gen. Assemb., Reg. Sess. (Del. 2015)","paragraph_id":"para_256"},{"text":"(synopsis). By eliminating federal jurisdiction over the Seafar-","paragraph_id":"para_257"},{"text":"ers Plan’s exclusively federal derivative claims, Boeing’s fo-","paragraph_id":"para_258"},{"text":"rum bylaw forecloses suit in a federal court based on federal","paragraph_id":"para_259"},{"text":"jurisdiction. That’s exactly what Section 115 was “not in-","paragraph_id":"para_260"},{"text":"tended to authorize.” 2","paragraph_id":"para_261"},{"text":"Second, while we might hesitate to place decisive weight","paragraph_id":"para_262"},{"text":"solely on a choice of preposition in the statute, we must also","paragraph_id":"para_263"},{"text":"note that the choice is consistent with the Delaware Supreme","paragraph_id":"para_264"},{"text":"Court’s and our understanding of the Delaware statute. The","paragraph_id":"para_265"},{"text":"United States District Court and Bankruptcy Court for the","paragraph_id":"para_266"},{"text":"District of Delaware are certainly, in the statute’s words,","paragraph_id":"para_267"},{"text":"“courts in this State” of Delaware. In Salzberg v. Sciabacucchi,","paragraph_id":"para_268"},{"text":"227 A.3d 102, 119 (Del. 2020), the Delaware Supreme Court","paragraph_id":"para_269"},{"text":"addressed Section 115 and said it presumed that the reference","paragraph_id":"para_270"},{"text":"2 Delaware law holds that a bill synopsis is a proper source from","paragraph_id":"para_271"},{"text":"which to glean legislative intent where the statutory language seems am-","paragraph_id":"para_272"},{"text":"biguous. Board of Adjustment of Sussex Cty. v. Verleysen, 36 A.3d 326, 332","paragraph_id":"para_273"},{"text":"(Del. 2012); Carper v. New Castle Cty. Bd. of Ed., 432 A.2d 1202, 1205 (Del.","paragraph_id":"para_274"},{"text":"1981). Section 115 as enacted was not materially different from the lan-","paragraph_id":"para_275"},{"text":"guage described in the synopsis.","paragraph_id":"para_276"},{"text":"10 No. 20-2244","paragraph_id":"para_277"},{"text":"to “courts in this State” included federal courts located in the","paragraph_id":"para_278"},{"text":"state.","paragraph_id":"para_279"},{"text":"If the statute had said “courts of this State,” the statutory","paragraph_id":"para_280"},{"text":"language might have given defendants a better toehold. Most","paragraph_id":"para_281"},{"text":"circuits treat forum-selection clause references to courts “of”","paragraph_id":"para_282"},{"text":"a state as not including federal courts in the state, but refer-","paragraph_id":"para_283"},{"text":"ences to courts “in” a state as including both state and federal","paragraph_id":"para_284"},{"text":"courts located in the state. See, e.g., New Jersey v. Merrill Lynch","paragraph_id":"para_285"},{"text":"& Co., 640 F.3d 545, 549 (3d Cir. 2011) (collecting cases, includ-","paragraph_id":"para_286"},{"text":"ing FindWhere Holdings, Inc. v. Sys. Env't Optimization, LLC,","paragraph_id":"para_287"},{"text":"626 F.3d 752, 755 (4th Cir. 2010), and Dixon v. TSE Int’l Inc.,","paragraph_id":"para_288"},{"text":"330 F.3d 396, 398 (5th Cir. 2003)); cf. Regis Associates v. Rank","paragraph_id":"para_289"},{"text":"Hotels (Management) Ltd., 894 F.2d 193, 195−96 (6th Cir. 1990)","paragraph_id":"para_290"},{"text":"(construing contractual clause consenting to “jurisdiction of","paragraph_id":"para_291"},{"text":"the Michigan Courts” as not clearly waiving statutory right to","paragraph_id":"para_292"},{"text":"remove case from state courts to a federal court in Michigan).","paragraph_id":"para_293"},{"text":"Similarly, for example, the federal Tax Injunction Act bars fed-","paragraph_id":"para_294"},{"text":"eral district courts from enjoining state tax collections when","paragraph_id":"para_295"},{"text":"“a plain, speedy and efficient remedy may be had in the","paragraph_id":"para_296"},{"text":"courts of such State.” 28 U.S.C. § 1341 (emphasis added). That","paragraph_id":"para_297"},{"text":"statutory language means that such cases must ordinarily be","paragraph_id":"para_298"},{"text":"heard in state courts, as distinct from language designating","paragraph_id":"para_299"},{"text":"courts “in” a state as suitable forums. See City of Fishers v. Di-","paragraph_id":"para_300"},{"text":"recTV, 5 F.4th 750, 753 (7th Cir. 2021) (discussing Tax Injunc-","paragraph_id":"para_301"},{"text":"tion Act).","paragraph_id":"para_302"},{"text":"From these signals in the statutory text and Delaware case","paragraph_id":"para_303"},{"text":"law, we conclude that Section 115 does not authorize use of a","paragraph_id":"para_304"},{"text":"forum-selection bylaw to avoid what should be exclusive fed-","paragraph_id":"para_305"},{"text":"eral jurisdiction over a case, particularly under the Exchange","paragraph_id":"para_306"},{"text":"Act.","paragraph_id":"para_307"},{"text":"No. 20-2244 11","paragraph_id":"para_308"},{"text":"Defendants counter that Section 115 does not matter be-","paragraph_id":"para_309"},{"text":"cause the Boeing bylaw is authorized under Section 109(b),","paragraph_id":"para_310"},{"text":"which provides broadly that a corporation’s “bylaws may","paragraph_id":"para_311"},{"text":"contain any provision, not inconsistent with law or with the","paragraph_id":"para_312"},{"text":"certificate of incorporation, relating to the business of the cor-","paragraph_id":"para_313"},{"text":"poration, the conduct of its affairs, and its right or powers or","paragraph_id":"para_314"},{"text":"the rights or powers of its stockholders, directors, officers or","paragraph_id":"para_315"},{"text":"employees.” 8 Del. C. § 109(b). We are not persuaded that Sec-","paragraph_id":"para_316"},{"text":"tion 109(b) saves this bylaw in this case.","paragraph_id":"para_317"},{"text":"We start with the general principle, which Delaware law","paragraph_id":"para_318"},{"text":"adopts, that more specific statutory provisions, like Section","paragraph_id":"para_319"},{"text":"115 for bylaws with forum-selection clauses, ordinarily take","paragraph_id":"para_320"},{"text":"precedence over more general provisions like Section 109.","paragraph_id":"para_321"},{"text":"E.g., Turnbull v. Fink, 668 A.2d 1370, 1377 (Del. 1995) (“Where","paragraph_id":"para_322"},{"text":"possible, a court will attempt to harmonize two potentially","paragraph_id":"para_323"},{"text":"conflicting statutes dealing with the same subject. If they can-","paragraph_id":"para_324"},{"text":"not be reconciled, however, the specific statute must prevail","paragraph_id":"para_325"},{"text":"over the general.”) (citations omitted). Section 109 includes","paragraph_id":"para_326"},{"text":"the limit “not inconsistent with law,” which does not invite","paragraph_id":"para_327"},{"text":"corporations to avoid non-waiver provisions like Section 29(a)","paragraph_id":"para_328"},{"text":"of the Exchange Act.","paragraph_id":"para_329"},{"text":"Defendants counter that principle, however, by arguing","paragraph_id":"para_330"},{"text":"that in Salzberg v. Sciabacucchi, 227 A.3d 102 (Del. 2020), the","paragraph_id":"para_331"},{"text":"Delaware Supreme Court held that the more general Section","paragraph_id":"para_332"},{"text":"109 actually provides broader authorizations than Section","paragraph_id":"para_333"},{"text":"115. Defendants read too much into Salzberg, which does not","paragraph_id":"para_334"},{"text":"allow enforcement of Boeing’s forum bylaw in this case. In","paragraph_id":"para_335"},{"text":"Salzberg, several Delaware corporations wrote charters with","paragraph_id":"para_336"},{"text":"provisions requiring that any actions arising under the Secu-","paragraph_id":"para_337"},{"text":"rities Act of 1933 be filed in federal courts. Id. at 109. Unlike","paragraph_id":"para_338"},{"text":"the Exchange Act of 1934, the Securities Act of 1933 allows","paragraph_id":"para_339"},{"text":"12 No. 20-2244","paragraph_id":"para_340"},{"text":"plaintiffs to file suit in state or federal court and, significantly,","paragraph_id":"para_341"},{"text":"bars removal from state to federal court. 15 U.S.C. § 77v(a);","paragraph_id":"para_342"},{"text":"Cyan, Inc. v. Beaver County Emps. Ret. Fund, 138 S. Ct. 1061,","paragraph_id":"para_343"},{"text":"1078–79 (2018).","paragraph_id":"para_344"},{"text":"A shareholder brought a facial challenge to those federal","paragraph_id":"para_345"},{"text":"forum clauses. The Court of Chancery held them invalid. The","paragraph_id":"para_346"},{"text":"Delaware Supreme Court reversed, but on narrow grounds.","paragraph_id":"para_347"},{"text":"Salzberg held only that the challenged provisions were facially","paragraph_id":"para_348"},{"text":"valid under Section 102(b)(1) of the Delaware General Corpo-","paragraph_id":"para_349"},{"text":"ration Law, which broadly defines what corporate charters","paragraph_id":"para_350"},{"text":"and bylaws may contain. 8 Del. C. § 102(b)(1); Salzberg, 227","paragraph_id":"para_351"},{"text":"A.3d at 109, 113–14.","paragraph_id":"para_352"},{"text":"Accordingly, Salzberg neither applies to claims brought","paragraph_id":"para_353"},{"text":"under the Exchange Act of 1934 nor bars securities plaintiffs","paragraph_id":"para_354"},{"text":"from bringing as-applied challenges to federal forum provi-","paragraph_id":"para_355"},{"text":"sions. Nothing in Salzberg suggests it would extend Section","paragraph_id":"para_356"},{"text":"109 (or Section 102(b)(1), for that matter) to allow application","paragraph_id":"para_357"},{"text":"of the forum bylaw to a case like this one, where it would ef-","paragraph_id":"para_358"},{"text":"fectively bar plaintiff from bringing its derivative claims un-","paragraph_id":"para_359"},{"text":"der the 1934 Act in any forum. To the contrary, the Delaware","paragraph_id":"para_360"},{"text":"court stressed the harmony between Delaware corporation","paragraph_id":"para_361"},{"text":"law and federal securities law: “This Court has viewed the","paragraph_id":"para_362"},{"text":"overlap of federal and state law in the disclosure area as ‘his-","paragraph_id":"para_363"},{"text":"toric,’ ‘compatible,’ and ‘complimentary.’” 227 A.3d at 114,","paragraph_id":"para_364"},{"text":"quoting Malone v. Brincat, 722 A.2d 5, 13 (Del. 1998). Even","paragraph_id":"para_365"},{"text":"more to the point here, as noted above, Salzberg expressly pre-","paragraph_id":"para_366"},{"text":"sumed that the reference to “courts in this State” in the bylaws","paragraph_id":"para_367"},{"text":"authorized by the new Section 115 included federal courts,","paragraph_id":"para_368"},{"text":"227 A.3d at 119, which the Boeing forum bylaw does not.","paragraph_id":"para_369"},{"text":"Defendants also contend that in Boilermakers Local 154 Re-","paragraph_id":"para_370"},{"text":"tirement Fund v. Chevron Corp., 73 A.3d 934 (Del. Ch. 2013), the","paragraph_id":"para_371"},{"text":"No. 20-2244 13","paragraph_id":"para_372"},{"text":"Delaware Court of Chancery held that Section 109(b) author-","paragraph_id":"para_373"},{"text":"ized a forum selection bylaw identical to the Boeing forum","paragraph_id":"para_374"},{"text":"bylaw. Not quite, for there were critical differences. In Boiler-","paragraph_id":"para_375"},{"text":"makers Fund, the boards of two Delaware corporations, Chev-","paragraph_id":"para_376"},{"text":"ron and FedEx, had adopted bylaws designating the Dela-","paragraph_id":"para_377"},{"text":"ware Court of Chancery as the exclusive forum for four types","paragraph_id":"para_378"},{"text":"of suits: derivative suits, fiduciary duty suits, suits under Del-","paragraph_id":"para_379"},{"text":"aware corporation law, and internal affairs suits. Id. at 942–43.","paragraph_id":"para_380"},{"text":"Plaintiffs were shareholders of Chevron and FedEx who","paragraph_id":"para_381"},{"text":"alleged that the boards lacked statutory authority to adopt the","paragraph_id":"para_382"},{"text":"bylaws. They sought a declaration that the bylaws were fa-","paragraph_id":"para_383"},{"text":"cially invalid and amounted to breaches of fiduciary duty.","paragraph_id":"para_384"},{"text":"The Court of Chancery rejected the facial challenges, empha-","paragraph_id":"para_385"},{"text":"sizing that plaintiffs were required to show that the bylaws","paragraph_id":"para_386"},{"text":"could not “operate lawfully or equitably under any circum-","paragraph_id":"para_387"},{"text":"stances.” Id. at 948.","paragraph_id":"para_388"},{"text":"In so holding, the court offered important observations","paragraph_id":"para_389"},{"text":"about the purpose of Section 109(b), the nature of forum-","paragraph_id":"para_390"},{"text":"selection bylaws, and hypothetical as-applied challenges—","paragraph_id":"para_391"},{"text":"like this case—based on the enforcement of a forum-selection","paragraph_id":"para_392"},{"text":"bylaw to eliminate federal jurisdiction. These observations","paragraph_id":"para_393"},{"text":"make clear that Section 109(b) and Boilermakers Fund do not","paragraph_id":"para_394"},{"text":"authorize enforcement of a forum-selection provision like the","paragraph_id":"para_395"},{"text":"Boeing forum bylaw in a case like this one.","paragraph_id":"para_396"},{"text":"First, the Court of Chancery noted that Section 109(b) “has","paragraph_id":"para_397"},{"text":"long been understood to allow the corporation to set ‘self-","paragraph_id":"para_398"},{"text":"imposed rules and regulations [that are] deemed expedient","paragraph_id":"para_399"},{"text":"for its convenient functioning.’” 73 A.3d at 951, quoting Gow","paragraph_id":"para_400"},{"text":"v. Consolidated Coppermines Corp., 165 A. 136, 140 (Del. Ch.","paragraph_id":"para_401"},{"text":"1933). Generally speaking, the court continued, forum bylaws","paragraph_id":"para_402"},{"text":"fit that description because they are “procedural” and","paragraph_id":"para_403"},{"text":"14 No. 20-2244","paragraph_id":"para_404"},{"text":"“process-oriented” rather than substantive. Boilermakers Fund,","paragraph_id":"para_405"},{"text":"73 A.3d at 951, quoting CA, Inc. v. AFSCME Emps. Pension","paragraph_id":"para_406"},{"text":"Plan, 953 A.2d 227, 236–37 (Del. 2008). The court determined","paragraph_id":"para_407"},{"text":"that the challenged forum-selection bylaws—directing","paragraph_id":"para_408"},{"text":"shareholders to file their internal affairs claims in the state of","paragraph_id":"para_409"},{"text":"Delaware (Chevron) and in the Delaware Court of Chancery","paragraph_id":"para_410"},{"text":"(FedEx)—also fit that description: they regulated “where","paragraph_id":"para_411"},{"text":"stockholders may file suit, not whether the stockholder may","paragraph_id":"para_412"},{"text":"file suit or the kind of remedy that the stockholder may obtain","paragraph_id":"para_413"},{"text":"on behalf of herself or the corporation.” Boilermakers Fund, 73","paragraph_id":"para_414"},{"text":"A.3d at 952; see also Salzberg, 227 A.3d at 115 n.51 (reiterating","paragraph_id":"para_415"},{"text":"Boilermakers Fund point that forum bylaws may regulate","paragraph_id":"para_416"},{"text":"where—not whether—shareholders may file suit).","paragraph_id":"para_417"},{"text":"The Boilermakers Fund court then provided important","paragraph_id":"para_418"},{"text":"guidance for this case. The court addressed the plaintiffs’ at-","paragraph_id":"para_419"},{"text":"tempts to identify hypothetical situations where the chal-","paragraph_id":"para_420"},{"text":"lenged bylaws would operate unreasonably by precluding","paragraph_id":"para_421"},{"text":"plaintiffs from bringing claims—such as derivative claims un-","paragraph_id":"para_422"},{"text":"der the Exchange Act of 1934—that must be brought in federal","paragraph_id":"para_423"},{"text":"court. Boilermakers Fund, 73 A.3d at 961–62. The court ex-","paragraph_id":"para_424"},{"text":"plained that facially, “neither of the forum selection bylaws","paragraph_id":"para_425"},{"text":"purports in any way to foreclose a plaintiff from exercising","paragraph_id":"para_426"},{"text":"any statutory right of action created by the federal govern-","paragraph_id":"para_427"},{"text":"ment.” Id. at 962. In fact, the Chevron bylaw had been","paragraph_id":"para_428"},{"text":"amended to avoid the problem we face here by expressly al-","paragraph_id":"para_429"},{"text":"lowing cases to be filed in federal court in the state of Dela-","paragraph_id":"para_430"},{"text":"ware. Id. at 961.","paragraph_id":"para_431"},{"text":"The plaintiffs asked a hypothetical question. Suppose the","paragraph_id":"para_432"},{"text":"board of FedEx sought to enforce the forum bylaw to foreclose","paragraph_id":"para_433"},{"text":"a plaintiff from bringing a claim within the exclusive jurisdic-","paragraph_id":"para_434"},{"text":"tion of the federal courts? That’s this case. The Delaware","paragraph_id":"para_435"},{"text":"No. 20-2244 15","paragraph_id":"para_436"},{"text":"Court of Chancery explained that in such a case, the board","paragraph_id":"para_437"},{"text":"“would have trouble” for two reasons:","paragraph_id":"para_438"},{"text":"First, a claim by a stockholder under federal law","paragraph_id":"para_439"},{"text":"for falsely soliciting proxies does not fit within","paragraph_id":"para_440"},{"text":"any category of claim enumerated in FedEx’s","paragraph_id":"para_441"},{"text":"forum selection bylaw. Thus FedEx’s bylaw is","paragraph_id":"para_442"},{"text":"consistent with what has been written about","paragraph_id":"para_443"},{"text":"similar forum selection clauses addressing","paragraph_id":"para_444"},{"text":"internal affairs cases: “[Forum selection]","paragraph_id":"para_445"},{"text":"provisions do not purport to regulate a","paragraph_id":"para_446"},{"text":"stockholder’s ability to bring a securities fraud","paragraph_id":"para_447"},{"text":"claim or any other claim that is not an intra-","paragraph_id":"para_448"},{"text":"corporate matter.” Second, the plaintiff could","paragraph_id":"para_449"},{"text":"argue that if the board took the position that the","paragraph_id":"para_450"},{"text":"bylaw waived the stockholder’s rights under the","paragraph_id":"para_451"},{"text":"Securities Exchange Act, such a waiver would","paragraph_id":"para_452"},{"text":"be inconsistent with the antiwaiver provisions","paragraph_id":"para_453"},{"text":"of that Act, codified at 15 U.S.C. § 78cc.","paragraph_id":"para_454"},{"text":"Id. at 962 (footnotes omitted). The first reason would not apply","paragraph_id":"para_455"},{"text":"to plaintiff’s derivative action here, but the second reason ap-","paragraph_id":"para_456"},{"text":"plies directly to it. While the Court of Chancery declined to","paragraph_id":"para_457"},{"text":"“wade deeper into imagined situations” so as not to risk issu-","paragraph_id":"para_458"},{"text":"ing an advisory opinion, its brief foray into how a hypothet-","paragraph_id":"para_459"},{"text":"ical plaintiff might protect her not-so-hypothetical rights un-","paragraph_id":"para_460"},{"text":"der the federal securities laws signals clearly enough that Del-","paragraph_id":"para_461"},{"text":"aware law would not look kindly on defendants’ effort to ap-","paragraph_id":"para_462"},{"text":"ply the Boeing bylaw here.","paragraph_id":"para_463"},{"text":"In future cases, Delaware courts may address broader","paragraph_id":"para_464"},{"text":"questions such as whether Section 109(b) would authorize a","paragraph_id":"para_465"},{"text":"bylaw that violates Section 115, but it is sufficient for our pur-","paragraph_id":"para_466"},{"text":"poses that the reasoning of Boilermakers Fund does not","paragraph_id":"para_467"},{"text":"16 No. 20-2244","paragraph_id":"para_468"},{"text":"authorize application of the Boeing forum bylaw to this case,","paragraph_id":"para_469"},{"text":"where it would effectively foreclose a claim under federal se-","paragraph_id":"para_470"},{"text":"curities law. The Court of Chancery made clear that enforce-","paragraph_id":"para_471"},{"text":"ment of a forum bylaw to foreclose a plaintiff from exercising","paragraph_id":"para_472"},{"text":"her rights under the Exchange Act of 1934 would be incon-","paragraph_id":"para_473"},{"text":"sistent with the anti-waiver provision of that Act. 73 A.3d at","paragraph_id":"para_474"},{"text":"962. No Delaware law, at least to our knowledge, authorizes","paragraph_id":"para_475"},{"text":"such an inconsistency. To the contrary, Salzberg, Boilermakers","paragraph_id":"para_476"},{"text":"Fund, and the new Section 115 codifying that decision signal","paragraph_id":"para_477"},{"text":"clearly that Delaware is not inclined to enable corporations to","paragraph_id":"para_478"},{"text":"close the courthouse doors entirely on derivative actions as-","paragraph_id":"para_479"},{"text":"serting federal claims subject to exclusive federal jurisdiction.","paragraph_id":"para_480"},{"text":"IV. Distinguishing Bremen and Bonny","paragraph_id":"para_481"},{"text":"To avoid this result, defendants also argue that they seek","paragraph_id":"para_482"},{"text":"only routine enforcement of a routine forum-selection clause","paragraph_id":"para_483"},{"text":"in a contract, citing M/S Bremen v. Zapata Off-Shore Co., 407","paragraph_id":"para_484"},{"text":"U.S. 1 (1972), and Bonny v. Society of Lloyd’s, 3 F.3d 156 (7th","paragraph_id":"para_485"},{"text":"Cir. 1993). The district court looked carefully at both cases and","paragraph_id":"para_486"},{"text":"ultimately concluded that Bonny supported dismissal based","paragraph_id":"para_487"},{"text":"on Boeing’s forum bylaw. We explained above why we con-","paragraph_id":"para_488"},{"text":"clude that Boeing’s forum bylaw, as applied to this case,","paragraph_id":"para_489"},{"text":"simply is not enforceable under Delaware law. It may be use-","paragraph_id":"para_490"},{"text":"ful, however, to explain why we also do not find Bremen or","paragraph_id":"para_491"},{"text":"Bonny a sufficient basis for enforcing the forum bylaw here.","paragraph_id":"para_492"},{"text":"We begin with Bremen. Zapata, a company based in Texas,","paragraph_id":"para_493"},{"text":"contracted with plaintiff Unterweser, a German corporation,","paragraph_id":"para_494"},{"text":"to tow Zapata’s drilling rig (the Bremen) from Louisiana to It-","paragraph_id":"para_495"},{"text":"aly. M/S Bremen, 407 U.S. at 2. The towing contract provided","paragraph_id":"para_496"},{"text":"that any dispute arising from the contract must be brought","paragraph_id":"para_497"},{"text":"before the London Court of Justice. The rig was damaged in a","paragraph_id":"para_498"},{"text":"storm in international waters in the Gulf of Mexico. Zapata","paragraph_id":"para_499"},{"text":"No. 20-2244 17","paragraph_id":"para_500"},{"text":"directed Unterweser to tow the damaged rig to Tampa, Flor-","paragraph_id":"para_501"},{"text":"ida, the nearest port of refuge. A week later, Zapata—ignoring","paragraph_id":"para_502"},{"text":"the terms of the contract—filed suit in federal court in Tampa","paragraph_id":"para_503"},{"text":"for negligent towing and breach of contract. Unterweser in-","paragraph_id":"para_504"},{"text":"voked the forum-selection provision and moved to dismiss","paragraph_id":"para_505"},{"text":"for forum non conveniens. The district court denied Unter-","paragraph_id":"para_506"},{"text":"weser’s motion and concluded that Zapata’s choice of forum","paragraph_id":"para_507"},{"text":"should not be disturbed. The Fifth Circuit affirmed.","paragraph_id":"para_508"},{"text":"The Supreme Court reversed, teaching that such forum-","paragraph_id":"para_509"},{"text":"selection provisions in contracts are “prima facie valid and","paragraph_id":"para_510"},{"text":"should be enforced unless enforcement is shown by the resist-","paragraph_id":"para_511"},{"text":"ing party to be ‘unreasonable’ under the circumstances.” 407","paragraph_id":"para_512"},{"text":"U.S. at 10. The Court explained that there were “compelling","paragraph_id":"para_513"},{"text":"reasons why a freely negotiated private international agree-","paragraph_id":"para_514"},{"text":"ment, unaffected by fraud, undue influence, or overweening","paragraph_id":"para_515"},{"text":"bargaining power” should be fully enforced. Id. at 12.","paragraph_id":"para_516"},{"text":"In the Bremen opinion itself, the Court emphasized the","paragraph_id":"para_517"},{"text":"international character of the transaction, where choice-of-","paragraph_id":"para_518"},{"text":"forum and choice-of-law agreements may be especially","paragraph_id":"para_519"},{"text":"helpful in case of disputes. Later cases show, however, that","paragraph_id":"para_520"},{"text":"Bremen stands for the broader proposition that contractually","paragraph_id":"para_521"},{"text":"valid choice-of-forum clauses will ordinarily be enforced. See,","paragraph_id":"para_522"},{"text":"e.g., Atlantic Marine Constr. Co. v. U.S. District Court, 571 U.S.","paragraph_id":"para_523"},{"text":"49, 62−64 (2013); Mueller, 880 F.3d at 894, quoting Atlantic","paragraph_id":"para_524"},{"text":"Marine, 571 U.S. at 64 (“forum-selection clauses should","paragraph_id":"para_525"},{"text":"control except in unusual cases”).","paragraph_id":"para_526"},{"text":"Bremen differs from this case most importantly in that it","paragraph_id":"para_527"},{"text":"involved a purely private contractual dispute. It did not in-","paragraph_id":"para_528"},{"text":"volve any claim under a federal statute, let alone a federal","paragraph_id":"para_529"},{"text":"statute with a non-waiver provision like Section 29(a) of the","paragraph_id":"para_530"},{"text":"Exchange Act. While the Supreme Court has generally been","paragraph_id":"para_531"},{"text":"18 No. 20-2244","paragraph_id":"para_532"},{"text":"receptive to enforcing contractually valid forum-selection","paragraph_id":"para_533"},{"text":"clauses, neither Bremen nor other decisions have endorsed","paragraph_id":"para_534"},{"text":"such clauses as paths to avoid otherwise applicable federal","paragraph_id":"para_535"},{"text":"statutes. Instead, the Court has warned against such uses.","paragraph_id":"para_536"},{"text":"In Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth Corp.,","paragraph_id":"para_537"},{"text":"473 U.S. 614 (1985), Chrysler asserted claims against","paragraph_id":"para_538"},{"text":"Mitsubishi, including an antitrust claim under United States","paragraph_id":"para_539"},{"text":"law. The parties’ contract required arbitration of disputes in","paragraph_id":"para_540"},{"text":"Japan. The Supreme Court enforced the clause and ordered","paragraph_id":"para_541"},{"text":"the parties to resolve their disputes in arbitration rather than","paragraph_id":"para_542"},{"text":"in a court. The Court did so, however, only after being assured","paragraph_id":"para_543"},{"text":"that the arbitration panel would apply United States antitrust","paragraph_id":"para_544"},{"text":"law, and only after issuing a pointed warning against using","paragraph_id":"para_545"},{"text":"an arbitration clause to avoid an otherwise-applicable federal","paragraph_id":"para_546"},{"text":"statute, even one without an anti-waiver provision like the","paragraph_id":"para_547"},{"text":"1934 Exchange Act’s Section 29(a). Id. at 636–38, 637 n.19.","paragraph_id":"para_548"},{"text":"The agreement between Mitsubishi and Chrysler also said","paragraph_id":"para_549"},{"text":"it would be governed by Swiss law. Id. at 637 n.19. In an","paragraph_id":"para_550"},{"text":"amicus brief, the United States had raised the possibility that","paragraph_id":"para_551"},{"text":"the arbitral panel might read this choice-of-law provision as","paragraph_id":"para_552"},{"text":"governing not only the terms of the contract but also as","paragraph_id":"para_553"},{"text":"displacing United States law, including the Sherman Act,","paragraph_id":"para_554"},{"text":"where it would otherwise apply. Mitsubishi had told the","paragraph_id":"para_555"},{"text":"Court in oral argument that it was not trying to avoid","paragraph_id":"para_556"},{"text":"application of the Sherman Act by that device. Despite that","paragraph_id":"para_557"},{"text":"assurance, the Court still went out of its way to warn against","paragraph_id":"para_558"},{"text":"that possibility: “in the event the choice-of-forum and choice-","paragraph_id":"para_559"},{"text":"of-law clauses operated in tandem as a prospective waiver of","paragraph_id":"para_560"},{"text":"a party’s right to pursue statutory remedies for antitrust","paragraph_id":"para_561"},{"text":"violations, we would have little hesitation in condemning the","paragraph_id":"para_562"},{"text":"agreement as against public policy.” Id. (citations omitted).","paragraph_id":"para_563"},{"text":"No. 20-2244 19","paragraph_id":"para_564"},{"text":"That considered warning carries even more force in this case","paragraph_id":"para_565"},{"text":"under the Exchange Act of 1934, with its anti-waiver","paragraph_id":"para_566"},{"text":"provision. In short, neither Bremen nor the more general","paragraph_id":"para_567"},{"text":"policy in favor of enforcing contractual forum-selection","paragraph_id":"para_568"},{"text":"clauses supports application of Boeing’s forum bylaw to","paragraph_id":"para_569"},{"text":"foreclose entirely plaintiff’s derivative Section 14(a) claims.","paragraph_id":"para_570"},{"text":"Turning to this court’s decision in Bonny v. Society of","paragraph_id":"para_571"},{"text":"Lloyd’s, defendants emphasize that we enforced choice-of-law","paragraph_id":"para_572"},{"text":"and forum-selection provisions that had the effect of foreclos-","paragraph_id":"para_573"},{"text":"ing plaintiffs’ claims under federal securities law. We did so","paragraph_id":"para_574"},{"text":"after being satisfied that English law would provide sufficient","paragraph_id":"para_575"},{"text":"protection and remedies. 3 F.3d at 161–62. Defendants con-","paragraph_id":"para_576"},{"text":"tend the same reasoning should apply to remedies under state","paragraph_id":"para_577"},{"text":"law in this case, and the district court agreed. We disagree be-","paragraph_id":"para_578"},{"text":"cause of a critical difference between Bonny and this case that","paragraph_id":"para_579"},{"text":"limits its reasoning.","paragraph_id":"para_580"},{"text":"The plaintiffs in Bonny were United States citizens who","paragraph_id":"para_581"},{"text":"had invested in the English insurer, Lloyd’s of London. The","paragraph_id":"para_582"},{"text":"investment agreements provided that any disputes arising","paragraph_id":"para_583"},{"text":"out plaintiffs’ investments with Lloyd’s would be governed","paragraph_id":"para_584"},{"text":"by English law and that the courts of England would have ex-","paragraph_id":"para_585"},{"text":"clusive jurisdiction over such disputes. After sustaining","paragraph_id":"para_586"},{"text":"heavy losses, plaintiffs sued Lloyd’s in the Northern District","paragraph_id":"para_587"},{"text":"of Illinois alleging claims under Section 12 of the Securities","paragraph_id":"para_588"},{"text":"Act of 1933 and Section 10(b) of the Exchange Act of 1934. The","paragraph_id":"para_589"},{"text":"district court dismissed the suit based on the forum-selection","paragraph_id":"para_590"},{"text":"clause. Id. at 157. We affirmed, reasoning that the choice-of-","paragraph_id":"para_591"},{"text":"law and forum-selection provisions did not violate United","paragraph_id":"para_592"},{"text":"States public policy and were therefore enforceable despite","paragraph_id":"para_593"},{"text":"plaintiffs’ reliance on the anti-waiver provisions of the 1933","paragraph_id":"para_594"},{"text":"and 1934 Acts.","paragraph_id":"para_595"},{"text":"20 No. 20-2244","paragraph_id":"para_596"},{"text":"The lack of a true conflict between English law and appli-","paragraph_id":"para_597"},{"text":"cable United States law was central to our decision. 3 F.3d at","paragraph_id":"para_598"},{"text":"161–62. First, citing Bremen, we noted that choice-of-law and","paragraph_id":"para_599"},{"text":"forum-selection provisions in agreements between domestic","paragraph_id":"para_600"},{"text":"and foreign businesses are “valid and should be enforced un-","paragraph_id":"para_601"},{"text":"less enforcement is shown by the resisting party to be unrea-","paragraph_id":"para_602"},{"text":"sonable under the circumstances.” Id. at 159, quoting Bremen,","paragraph_id":"para_603"},{"text":"407 U.S. at 10. The plaintiffs in Bonny, much like the plaintiffs","paragraph_id":"para_604"},{"text":"in Bremen, had failed to demonstrate that the provisions at is-","paragraph_id":"para_605"},{"text":"sue were unreasonable. Bonny, 3 F.3d at 160. Further, echoing","paragraph_id":"para_606"},{"text":"the Supreme Court’s language in Bremen, Mitsubishi Motors,","paragraph_id":"para_607"},{"text":"and Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974), we ex-","paragraph_id":"para_608"},{"text":"plained that the presumptive validity of such provisions of-","paragraph_id":"para_609"},{"text":"fered valuable predictability in international business trans-","paragraph_id":"para_610"},{"text":"actions. Bonny, 3 F.3d at 159–60, discussing Mitsubishi Motors,","paragraph_id":"para_611"},{"text":"473 U.S. at 629, and Scherk, 417 U.S. at 516.","paragraph_id":"para_612"},{"text":"Even so, we harbored “serious concerns that Lloyd’s","paragraph_id":"para_613"},{"text":"clauses operate[d] as a prospective waiver of statutory reme-","paragraph_id":"para_614"},{"text":"dies for securities violations,” but in the end we were “satis-","paragraph_id":"para_615"},{"text":"fied that several remedies in England vindicate[d] plaintiffs’","paragraph_id":"para_616"},{"text":"substantive rights while not subverting” the principles of full","paragraph_id":"para_617"},{"text":"and fair disclosure protected by the Securities Act of 1933.","paragraph_id":"para_618"},{"text":"Bonny, 3 F.3d at 160–61.3 The international nature of the trans-","paragraph_id":"para_619"},{"text":"actions and the availability of adequate remedies under Brit-","paragraph_id":"para_620"},{"text":"ish law convinced us that the forum-selection and choice-of-","paragraph_id":"para_621"},{"text":"3 In Bonny, the record showed that English law afforded plaintiffs a","paragraph_id":"para_622"},{"text":"cause of action similar to their claims under Section 10(b) of the Exchange","paragraph_id":"para_623"},{"text":"Act of 1934 and Rule 10b-5. 3 F.3d at 161. There were no English rights and","paragraph_id":"para_624"},{"text":"remedies similar to those under Sections 12(1) and 12(2) of the Securities","paragraph_id":"para_625"},{"text":"Act of 1933. Id. at 162.","paragraph_id":"para_626"},{"text":"No. 20-2244 21","paragraph_id":"para_627"},{"text":"law provisions were enforceable despite the anti-waiver pro-","paragraph_id":"para_628"},{"text":"visions in the 1933 and 1934 Acts. Id. at 162.4","paragraph_id":"para_629"},{"text":"Defendants argue that we should extend the same","paragraph_id":"para_630"},{"text":"analysis—focused on the sufficiency of remedies under state","paragraph_id":"para_631"},{"text":"law—to enforce Boeing’s forum bylaw here. That argument","paragraph_id":"para_632"},{"text":"overlooks the decisive role that the international character of","paragraph_id":"para_633"},{"text":"the dispute played in Bonny. The English remedies were","paragraph_id":"para_634"},{"text":"deemed sufficient only in light of the international nature of","paragraph_id":"para_635"},{"text":"the investment agreements: “Given the international nature of","paragraph_id":"para_636"},{"text":"the transactions involved here, and the availability of","paragraph_id":"para_637"},{"text":"remedies under British law that do not offend the polices","paragraph_id":"para_638"},{"text":"behind the securities laws, the parties’ forum selection and","paragraph_id":"para_639"},{"text":"choice of law provisions contained in the agreements should","paragraph_id":"para_640"},{"text":"be given effect.” 3 F.3d at 162.","paragraph_id":"para_641"},{"text":"There is no hint in Bonny that the same logic and result","paragraph_id":"para_642"},{"text":"would apply to a domestic transaction’s forum-selection","paragraph_id":"para_643"},{"text":"4 Bonny is consistent with decisions in other circuits balancing these","paragraph_id":"para_644"},{"text":"competing interests when parties to international investments agree on for-","paragraph_id":"para_645"},{"text":"eign forums and foreign law. For example, in Haynsworth v. The Corpora-","paragraph_id":"para_646"},{"text":"tion, 121 F.3d 956 (5th Cir. 1997), the Fifth Circuit reiterated that United","paragraph_id":"para_647"},{"text":"States courts should “tread cautiously before expanding the operation of","paragraph_id":"para_648"},{"text":"U.S. securities law in the international arena,” particularly “in the case of","paragraph_id":"para_649"},{"text":"England, a forum that American courts repeatedly have recognized to be","paragraph_id":"para_650"},{"text":"fair and impartial.” Id. at 966–67 (footnote omitted). For similar holdings,","paragraph_id":"para_651"},{"text":"see Richards v. Lloyd’s of London, 135 F.3d 1289, 1294–96 (9th Cir. 1998) (en","paragraph_id":"para_652"},{"text":"banc); Roby v. Corporation of Lloyd’s, 996 F.2d 1353, 1364–66 (2d Cir. 1993);","paragraph_id":"para_653"},{"text":"Riley v. Kingsley Underwriting Agencies, Ltd., 969 F.2d 953, 958 (10th Cir.","paragraph_id":"para_654"},{"text":"1992); AVC Nederland B.V. v. Atrium Inv. P’ship, 740 F.2d 148, 158–59 (2d","paragraph_id":"para_655"},{"text":"Cir. 1984) (Section 29(a) did not prevent enforcement of choice of Dutch","paragraph_id":"para_656"},{"text":"forum and law). These decisions all seem generally consistent with the Su-","paragraph_id":"para_657"},{"text":"preme Court’s later decision in Morrison v. National Australia Bank, 561 U.S.","paragraph_id":"para_658"},{"text":"247 (2010), which limited extraterritorial application of United States se-","paragraph_id":"para_659"},{"text":"curities laws.","paragraph_id":"para_660"},{"text":"22 No. 20-2244","paragraph_id":"para_661"},{"text":"clause that had the effect of waiving federal securities rights","paragraph_id":"para_662"},{"text":"and remedies and leaving the investor to only state-law rem-","paragraph_id":"para_663"},{"text":"edies. To the contrary, extending Bonny to domestic invest-","paragraph_id":"para_664"},{"text":"ments and state-law remedies would undermine the pivotal","paragraph_id":"para_665"},{"text":"decisions by Congress in 1933 and 1934 to assume the domi-","paragraph_id":"para_666"},{"text":"nant role in securities regulation after decades of ineffective","paragraph_id":"para_667"},{"text":"state regulation. Both federal Acts contain anti-waiver provi-","paragraph_id":"para_668"},{"text":"sions that prevent parties from opting out of the federal laws","paragraph_id":"para_669"},{"text":"in favor of state law, no matter how similar or strong the state-","paragraph_id":"para_670"},{"text":"law rights and remedies are. See 15 U.S.C. §§ 77n & 78cc(a).","paragraph_id":"para_671"},{"text":"As applied to plaintiff’s Section 14(a) claims, Boeing’s","paragraph_id":"para_672"},{"text":"forum bylaw does not implicate the unique needs of","paragraph_id":"para_673"},{"text":"international trade or require us to parse the similarities and","paragraph_id":"para_674"},{"text":"differences between foreign and domestic securities laws. The","paragraph_id":"para_675"},{"text":"anti-waiver provision of Section 29(a) does not invite a","paragraph_id":"para_676"},{"text":"determination of whether state law offers alternative","paragraph_id":"para_677"},{"text":"remedies that might be deemed sufficient against an inchoate","paragraph_id":"para_678"},{"text":"standard. Non-waiver is woven into the public policy of the","paragraph_id":"para_679"},{"text":"federal securities laws because it is the express statutory law.","paragraph_id":"para_680"},{"text":"And that law is binding—especially where, as here, there are","paragraph_id":"para_681"},{"text":"no countervailing international policy interests at stake.","paragraph_id":"para_682"},{"text":"Accord, Luce v. Edelstein, 802 F.2d 49, 57 (2d Cir. 1986) (forum-","paragraph_id":"para_683"},{"text":"selection clause provided for only state-court jurisdiction;","paragraph_id":"para_684"},{"text":"district court correctly dismissed most claims but retained","paragraph_id":"para_685"},{"text":"jurisdiction over Exchange Act claims); KDH Consulting Grp.","paragraph_id":"para_686"},{"text":"LLC v. Iterative Capital Mgmt. L.P., 2020 WL 7251172, at *9","paragraph_id":"para_687"},{"text":"(S.D.N.Y. June 29, 2020) (following Luce, retaining Exchange","paragraph_id":"para_688"},{"text":"Act claims but dismissing other claims).","paragraph_id":"para_689"},{"text":"Bonny required a choice between United States law and","paragraph_id":"para_690"},{"text":"policy and foreign law and policy. Here, however, we see no","paragraph_id":"para_691"},{"text":"comparable tension between federal law and policy and","paragraph_id":"para_692"},{"text":"No. 20-2244 23","paragraph_id":"para_693"},{"text":"Delaware state law and policy. After all, under the Supremacy","paragraph_id":"para_694"},{"text":"Clause of the United States Constitution, state courts enforce","paragraph_id":"para_695"},{"text":"and apply both state and federal law. See Claflin v. Houseman,","paragraph_id":"para_696"},{"text":"93 U.S. 130, 136 (1876) (“The law of the United States are laws","paragraph_id":"para_697"},{"text":"in the several States, and just as much binding on the citizens","paragraph_id":"para_698"},{"text":"and courts thereof as the State laws are. The United States is","paragraph_id":"para_699"},{"text":"not a foreign sovereignty as regards the several States, but is","paragraph_id":"para_700"},{"text":"a concurrent, and, within its jurisdiction, paramount","paragraph_id":"para_701"},{"text":"sovereignty.”), cited in Brandon v. Anesthesia & Pain Mgmt.","paragraph_id":"para_702"},{"text":"Assocs., 277 F.3d 936, 942 (7th Cir. 2002) (Illinois courts would","paragraph_id":"para_703"},{"text":"recognize claim for retaliatory discharge in violation of","paragraph_id":"para_704"},{"text":"Illinois public policy where employer fired employee for","paragraph_id":"para_705"},{"text":"objecting to violations of federal anti-fraud law). The","paragraph_id":"para_706"},{"text":"Delaware Court of Chancery’s opinion in Boilermakers Fund","paragraph_id":"para_707"},{"text":"shows no relevant tension between Delaware corporation law","paragraph_id":"para_708"},{"text":"and public policy and federal securities law and policy.","paragraph_id":"para_709"},{"text":"Instead, as noted, the Court of Chancery said that the","paragraph_id":"para_710"},{"text":"defendant corporations would run into trouble under the","paragraph_id":"para_711"},{"text":"Exchange Act’s anti-waiver provision in Section 29 if they","paragraph_id":"para_712"},{"text":"tried to apply their forum-selection provisions to foreclose","paragraph_id":"para_713"},{"text":"entirely claims under the Exchange Act. 73 A.3d at 962.5","paragraph_id":"para_714"},{"text":"Finally, our dissenting colleague proposes an entirely dif-","paragraph_id":"para_715"},{"text":"ferent solution for the puzzle at this intersection of state","paragraph_id":"para_716"},{"text":"5 For all of these reasons, we respectfully disagree with relevant","paragraph_id":"para_717"},{"text":"portions of several district court decisions that have extended the","paragraph_id":"para_718"},{"text":"reasoning of Bonny beyond its international foundations to enforce forum-","paragraph_id":"para_719"},{"text":"selection clauses that had the effect of foreclosing claims under otherwise-","paragraph_id":"para_720"},{"text":"applicable federal securities laws and leaving plaintiffs to only state-law","paragraph_id":"para_721"},{"text":"remedies. See Spenta Enterprises, Ltd. v. Coleman, 574 F. Supp. 2d 851, 857","paragraph_id":"para_722"},{"text":"(N.D. Ill. 2008), followed in Solid Q Holding, LLC v. Arenal Energy Corp.,","paragraph_id":"para_723"},{"text":"2017 WL 935891, at *2 n.17 (D. Utah Mar. 8, 2017), and Vernon v. Stabach,","paragraph_id":"para_724"},{"text":"2014 WL 1806861, at *6 (S.D. Fla. May 7, 2014).","paragraph_id":"para_725"},{"text":"24 No. 20-2244","paragraph_id":"para_726"},{"text":"corporation law, federal securities law, and federal jurisdic-","paragraph_id":"para_727"},{"text":"tion and venue rules. The dissent’s proposed solution would","paragraph_id":"para_728"},{"text":"be to allow a Delaware state court to hear a derivative action","paragraph_id":"para_729"},{"text":"under Section 14(a), despite the Exchange Act’s provision for","paragraph_id":"para_730"},{"text":"exclusive federal jurisdiction in Section 29(a). As a matter of","paragraph_id":"para_731"},{"text":"policy, that solution might well be a reasonable outcome, at","paragraph_id":"para_732"},{"text":"least under a different set of federal statutes and precedents.","paragraph_id":"para_733"},{"text":"That solution, however, is not consistent with our reading of","paragraph_id":"para_734"},{"text":"either Delaware law, the Exchange Act’s exclusive federal ju-","paragraph_id":"para_735"},{"text":"risdiction, Borak’s recognition of derivative claims under Sec-","paragraph_id":"para_736"},{"text":"tion 14(a), or the Supreme Court’s caution in the Mitsubishi","paragraph_id":"para_737"},{"text":"case, 473 U.S. at 637 n.19, against using choice-of-forum and","paragraph_id":"para_738"},{"text":"choice-of-law clauses to attempt prospective waivers of fed-","paragraph_id":"para_739"},{"text":"eral statutory remedies.","paragraph_id":"para_740"},{"text":"Notably, defendants have not advocated for the dissent’s","paragraph_id":"para_741"},{"text":"novel proposal to send this dispute to state court in Delaware.","paragraph_id":"para_742"},{"text":"The defendants have instead argued all along for their pre-","paragraph_id":"para_743"},{"text":"ferred Catch-22 result that would bar plaintiff’s derivative","paragraph_id":"para_744"},{"text":"Section 14(a) claim in any forum. Also, the dissent does not","paragraph_id":"para_745"},{"text":"cite any precedent adopting its solution for this case. In our","paragraph_id":"para_746"},{"text":"view, a state court would have to be bold indeed to adopt that","paragraph_id":"para_747"},{"text":"solution and to exercise jurisdiction over this derivative claim","paragraph_id":"para_748"},{"text":"despite Section 29(a), the lack of support from either side in","paragraph_id":"para_749"},{"text":"this lawsuit, and the Supreme Court’s warning in footnote 19","paragraph_id":"para_750"},{"text":"of the Mitsubishi case. See also Cottrell v. Duke, 737 F.3d 1238,","paragraph_id":"para_751"},{"text":"1247−48 (8th Cir. 2013) (reversing Colorado River abstention","paragraph_id":"para_752"},{"text":"over shareholder derivative action under Section 14(a) be-","paragraph_id":"para_753"},{"text":"cause Delaware state court could not exercise jurisdiction","paragraph_id":"para_754"},{"text":"over that claim in parallel derivative action).","paragraph_id":"para_755"},{"text":"It may or may not be true, as the dissent suggests, that Del-","paragraph_id":"para_756"},{"text":"aware could abolish or further restrict derivative claims based","paragraph_id":"para_757"},{"text":"No. 20-2244 25","paragraph_id":"para_758"},{"text":"on federal laws in ways consistent with the dissent’s views.","paragraph_id":"para_759"},{"text":"We decline to speculate on the point because Delaware has","paragraph_id":"para_760"},{"text":"not yet done so or signaled its intention to do so. Unless and","paragraph_id":"para_761"},{"text":"until it does, the better course is to hold that Boeing’s forum","paragraph_id":"para_762"},{"text":"bylaw cannot be applied to this derivative action asserting a","paragraph_id":"para_763"},{"text":"claim that is subject to exclusive federal jurisdiction.","paragraph_id":"para_764"},{"text":"The judgment of the district court is REVERSED and the","paragraph_id":"para_765"},{"text":"case is REMANDED to the district court for further proceed-","paragraph_id":"para_766"},{"text":"ings consistent with this opinion.","paragraph_id":"para_767"},{"text":"26 No. 20-2244","paragraph_id":"para_768"},{"text":"EASTERBROOK, Circuit Judge, dissenting. Page 2 of my col-","paragraph_id":"para_769"},{"text":"leagues’ opinion sums up their rationale: “Because the federal","paragraph_id":"para_770"},{"text":"Exchange Act gives federal courts exclusive jurisdiction over","paragraph_id":"para_771"},{"text":"actions under it, applying the bylaw to this case would mean","paragraph_id":"para_772"},{"text":"that plaintiff’s derivative Section 14(a) action may not be","paragraph_id":"para_773"},{"text":"heard in any forum.” They deem that outcome unacceptable.","paragraph_id":"para_774"},{"text":"Yet plaintiff retains its right to sue directly under §14(a) in","paragraph_id":"para_775"},{"text":"federal court, and jurisdiction to enforce the Exchange Act is","paragraph_id":"para_776"},{"text":"not exclusive in the way my colleagues understand it. This","paragraph_id":"para_777"},{"text":"means that litigating the proposed derivative suit in state","paragraph_id":"para_778"},{"text":"court is not problematic.","paragraph_id":"para_779"},{"text":"Section 14(a), 15 U.S.C. §78n(a), says that it is unlawful for","paragraph_id":"para_780"},{"text":"any person to solicit proxies in violation of a rule issued by","paragraph_id":"para_781"},{"text":"the SEC. It does not say one word about enforcement, nor","paragraph_id":"para_782"},{"text":"does any other part of the Exchange Act. Federal judges cre-","paragraph_id":"para_783"},{"text":"ated a private right of action—and the action thus created is","paragraph_id":"para_784"},{"text":"one that permits investors to sue issuers, not one that permits","paragraph_id":"para_785"},{"text":"issuers (the authors of the contested documents) to sue. See","paragraph_id":"para_786"},{"text":"Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083 (1991); Piper","paragraph_id":"para_787"},{"text":"v. Chris-Craft Industries, Inc., 430 U.S. 1 (1977). Nothing in Boe-","paragraph_id":"para_788"},{"text":"ing’s bylaw strips plaintiff, as a recipient of proxy materials,","paragraph_id":"para_789"},{"text":"of the ability to file a direct §14(a) action in federal court. And","paragraph_id":"para_790"},{"text":"since plaintiff retains that ability, it is hard to see how it has","paragraph_id":"para_791"},{"text":"been deprived of a right to enforce §14(a).","paragraph_id":"para_792"},{"text":"Recall what a derivative action is. An investor who wants","paragraph_id":"para_793"},{"text":"a corporation to sue members of its own board or manage-","paragraph_id":"para_794"},{"text":"ment proceeds in multiple steps. First the investor demands","paragraph_id":"para_795"},{"text":"action from the board. If the board says no, the investor sues","paragraph_id":"para_796"},{"text":"the directors seeking a judicial order compelling them (or per-","paragraph_id":"para_797"},{"text":"mitting the investor on their behalf) to require the corporation","paragraph_id":"para_798"},{"text":"to sue. If a court issues such an order, the corporation","paragraph_id":"para_799"},{"text":"No. 20-2244 27","paragraph_id":"para_800"},{"text":"(perhaps represented by the investor as its agent) litigates","paragraph_id":"para_801"},{"text":"against the directors. The first two steps, which address the","paragraph_id":"para_802"},{"text":"question “Who speaks for the corporation?”, are matters of","paragraph_id":"para_803"},{"text":"corporate internal affairs under state law. So Kamen v. Kemper","paragraph_id":"para_804"},{"text":"Financial Services, Inc., 500 U.S. 90 (1991), holds with respect to","paragraph_id":"para_805"},{"text":"derivative suits whose ultimate (third) step would rest on fed-","paragraph_id":"para_806"},{"text":"eral law. It is state law, Kamen tells us, that determines both","paragraph_id":"para_807"},{"text":"when demand is required and when investors can step into a","paragraph_id":"para_808"},{"text":"corporation’s shoes. And the third step—in which a corpora-","paragraph_id":"para_809"},{"text":"tion, author of the proxy materials, sues its own directors—","paragraph_id":"para_810"},{"text":"also rests on state law. Plaintiff’s theory at the third step","paragraph_id":"para_811"},{"text":"would be that the directors violated their state-law duty of","paragraph_id":"para_812"},{"text":"care by permitting Boeing to do things that exposed it to lia-","paragraph_id":"para_813"},{"text":"bility under federal law. Section 14(a) plays a role in such liti-","paragraph_id":"para_814"},{"text":"gation, to be sure, but does not create the claim. Nor is the","paragraph_id":"para_815"},{"text":"derivative claim necessary to enforce the federal rule, which","paragraph_id":"para_816"},{"text":"is done through investors’ or the SEC’s direct suits.","paragraph_id":"para_817"},{"text":"Suppose Delaware were to abolish derivative suits. Inves-","paragraph_id":"para_818"},{"text":"tors still could sue managers for violating the state-law duties","paragraph_id":"para_819"},{"text":"of care or loyalty. Investors still could sue companies under","paragraph_id":"para_820"},{"text":"statutes such as §14(a). Would abolishing derivative actions","paragraph_id":"para_821"},{"text":"violate federal law? I can’t see how. And if states can abolish","paragraph_id":"para_822"},{"text":"derivative suits without violating §14(a), they can permit cor-","paragraph_id":"para_823"},{"text":"porations to establish conditions on derivative suits. The fed-","paragraph_id":"para_824"},{"text":"eral right is for investors or the SEC to sue directly. Many in-","paragraph_id":"para_825"},{"text":"vestors have sued Boeing directly about the 737 MAX debacle.","paragraph_id":"para_826"},{"text":"A derivative suit adds only a procedural snarl.","paragraph_id":"para_827"},{"text":"Virginia Bankshares holds that the existence of a private","paragraph_id":"para_828"},{"text":"right of action under §14 cannot be taken for granted. It is not","paragraph_id":"para_829"},{"text":"an on/off matter, in which every possible claim in the name of","paragraph_id":"para_830"},{"text":"§14 is proper. Instead the judiciary proceeds theory by theory.","paragraph_id":"para_831"},{"text":"28 No. 20-2244","paragraph_id":"para_832"},{"text":"The Supreme Court has never held or even intimated that","paragraph_id":"para_833"},{"text":"there is a federal right to pursue a derivative claim under","paragraph_id":"para_834"},{"text":"§14(a) when the investor can pursue a direct claim. J.I. Case","paragraph_id":"para_835"},{"text":"Co. v. Borak, 377 U.S. 426, 432 (1964), holds that §14 supports","paragraph_id":"para_836"},{"text":"a derivative claim when its denial would “be tantamount to a","paragraph_id":"para_837"},{"text":"denial of federal relief”; that condition does not hold when","paragraph_id":"para_838"},{"text":"the private plaintiff can pursue a direct action in federal court.","paragraph_id":"para_839"},{"text":"Virginia Bankshares treats Borak as limited to its facts and","paragraph_id":"para_840"},{"text":"declines to extend private rights under §14(a) to new theories.","paragraph_id":"para_841"},{"text":"In the 30 years since, the Justices have told us that the days of","paragraph_id":"para_842"},{"text":"authorizing private actions in common-law fashion are over.","paragraph_id":"para_843"},{"text":"See, e.g., Jesner v. Arab Bank, PLC, 138 S. Ct. 1386, 1402 (2018)","paragraph_id":"para_844"},{"text":"(describing the Court’s “reluctance to extend judicially cre-","paragraph_id":"para_845"},{"text":"ated private rights of action”). Borak is now a derelict. We","paragraph_id":"para_846"},{"text":"should not expand it to a situation in which private rights can","paragraph_id":"para_847"},{"text":"be enforced in direct suits.","paragraph_id":"para_848"},{"text":"As for the supposed exclusivity of jurisdiction under the","paragraph_id":"para_849"},{"text":"Exchange Act: since per Kamen at least the first two steps rest","paragraph_id":"para_850"},{"text":"on state law, it is hard to see how federal jurisdiction over de-","paragraph_id":"para_851"},{"text":"rivative litigation could be exclusive. Congress has recog-","paragraph_id":"para_852"},{"text":"nized this. For 61 years the Securities Exchange Act of 1934","paragraph_id":"para_853"},{"text":"did not mention derivative litigation. That changed in 1995,","paragraph_id":"para_854"},{"text":"with the Private Securities Litigation Reform Act. One feature","paragraph_id":"para_855"},{"text":"of this statute, which amends the 1934 Act, permits issuers to","paragraph_id":"para_856"},{"text":"remove suits filed, nominally under state law, when the sub-","paragraph_id":"para_857"},{"text":"ject matter comes within the scope of federal law. See gener-","paragraph_id":"para_858"},{"text":"ally Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S.","paragraph_id":"para_859"},{"text":"71 (2006). But derivative suits can’t be removed. See 15 U.S.C.","paragraph_id":"para_860"},{"text":"§77p(f)(2)(B). Congress thus has told us that derivative suits","paragraph_id":"para_861"},{"text":"related to securities matters may begin in state court—and, if","paragraph_id":"para_862"},{"text":"No. 20-2244 29","paragraph_id":"para_863"},{"text":"they begin there, stay there. That’s inconsistent with my col-","paragraph_id":"para_864"},{"text":"leagues’ view that they must be in federal court.","paragraph_id":"para_865"},{"text":"Section 27(a) of the Exchange Act, 15 U.S.C. §78aa(a), pro-","paragraph_id":"para_866"},{"text":"vides for exclusive jurisdiction of claims arising under the Ex-","paragraph_id":"para_867"},{"text":"change Act and the SEC’s rules, but a derivative suit arises","paragraph_id":"para_868"},{"text":"under state law even if a federal issue may come to the fore","paragraph_id":"para_869"},{"text":"eventually. More: Shearson/American Express, Inc. v. McMahon,","paragraph_id":"para_870"},{"text":"482 U.S. 220 (1987), treats exclusivity under §27(a) as a right","paragraph_id":"para_871"},{"text":"that people may waive. 482 U.S. at 227–38. It added that the","paragraph_id":"para_872"},{"text":"anti-waiver clause in §29(a), 15 U.S.C. §78cc(a), is limited to","paragraph_id":"para_873"},{"text":"the Act’s substantive standards. This meant in McMahon that","paragraph_id":"para_874"},{"text":"issuers and investors are free to agree to arbitration.","paragraph_id":"para_875"},{"text":"McMahon’s reasoning means that other forum-selection","paragraph_id":"para_876"},{"text":"agreements are permissible—after all, the Court deems arbi-","paragraph_id":"para_877"},{"text":"tration a kind of forum-selection agreement, which Scherk v.","paragraph_id":"para_878"},{"text":"Alberto-Culver Co., 417 U.S. 506 (1974), held to be compatible","paragraph_id":"para_879"},{"text":"with the Exchange Act. The provision in Boeing’s bylaws is","paragraph_id":"para_880"},{"text":"just another forum-selection clause. (Under Delaware law,","paragraph_id":"para_881"},{"text":"bylaws are contracts between corporations and investors. See","paragraph_id":"para_882"},{"text":"ATP Tour, Inc. v. Deutscher Tennis Bund, 91 A.3d 554, 558 (Del.","paragraph_id":"para_883"},{"text":"2014).) The bylaw waives any right to exclusive federal juris-","paragraph_id":"para_884"},{"text":"diction. Delaware will provide whatever substantive relief is","paragraph_id":"para_885"},{"text":"appropriate, if its judiciary first holds that plaintiff can litigate","paragraph_id":"para_886"},{"text":"on Boeing’s behalf.","paragraph_id":"para_887"},{"text":"Any doubt could be resolved by decomposing a derivative","paragraph_id":"para_888"},{"text":"claim into its components: the first two steps in state court un-","paragraph_id":"para_889"},{"text":"der state law, and the third (if the state judiciary authorizes","paragraph_id":"para_890"},{"text":"plaintiff to represent Boeing) in federal court. That would do","paragraph_id":"para_891"},{"text":"minimal damage to Delaware law and Boeing’s bylaw. The","paragraph_id":"para_892"},{"text":"majority’s approach, by contrast, demolishes a sensible state","paragraph_id":"para_893"},{"text":"scheme.","paragraph_id":"para_894"},{"text":"30 No. 20-2244","paragraph_id":"para_895"},{"text":"I acknowledge that Boeing has not relied on Kamen,","paragraph_id":"para_896"},{"text":"McMahon, or Virginia Bankshares. The principle of party","paragraph_id":"para_897"},{"text":"presentation normally limits a federal court to resolving the","paragraph_id":"para_898"},{"text":"parties’ contentions. See United States v. Sineneng-Smith, 140 S.","paragraph_id":"para_899"},{"text":"Ct. 1575 (2020). Yet Boeing has vigorously defended the va-","paragraph_id":"para_900"},{"text":"lidity of its bylaw, though it has slighted the choice-of-law","paragraph_id":"para_901"},{"text":"considerations that I have stressed. A federal court is not","paragraph_id":"para_902"},{"text":"bound by litigants’ beliefs about the meaning of a jurisdic-","paragraph_id":"para_903"},{"text":"tional provision such as §27(a). We must resolve jurisdictional","paragraph_id":"para_904"},{"text":"issues correctly no matter what the parties say or omit. And","paragraph_id":"para_905"},{"text":"Kamen concerns the appropriate treatment of parties’ mis-","paragraph_id":"para_906"},{"text":"taken assumption that federal procedures govern derivative","paragraph_id":"para_907"},{"text":"litigation in which there is a federal substantive issue. Both","paragraph_id":"para_908"},{"text":"sides in Kamen told this court that federal substance implies","paragraph_id":"para_909"},{"text":"federal procedures for derivative litigation; they disagreed","paragraph_id":"para_910"},{"text":"only about what those procedures should be. After we de-","paragraph_id":"para_911"},{"text":"vised a federal rule about demand on the board of directors,","paragraph_id":"para_912"},{"text":"the Supreme Court reversed us for accepting the parties’ mu-","paragraph_id":"para_913"},{"text":"tual assumption. The Justices told us to apply state law to pro-","paragraph_id":"para_914"},{"text":"cedural matters in derivative suits, no matter the source of the","paragraph_id":"para_915"},{"text":"substantive theory. We should not make the same mistake","paragraph_id":"para_916"},{"text":"again.","paragraph_id":"para_917"},{"text":"None of what I have said so far would matter if, as the","paragraph_id":"para_918"},{"text":"majority concludes, Boeing’s bylaw is unlawful under Dela-","paragraph_id":"para_919"},{"text":"ware law. Yet my colleagues’ analysis of that subject is col-","paragraph_id":"para_920"},{"text":"ored by their belief that the bylaw extinguishes a right under","paragraph_id":"para_921"},{"text":"federal law. I’ve shown why that is not so.","paragraph_id":"para_922"},{"text":"Read on its own terms, 8 Del. Code §115 does not prohibit","paragraph_id":"para_923"},{"text":"Boeing’s bylaw. The statute provides:","paragraph_id":"para_924"},{"text":"The certificate of incorporation or the bylaws may require, con-","paragraph_id":"para_925"},{"text":"sistent with applicable jurisdictional requirements, that any or all","paragraph_id":"para_926"},{"text":"No. 20-2244 31","paragraph_id":"para_927"},{"text":"internal corporate claims shall be brought solely and exclusively","paragraph_id":"para_928"},{"text":"in any or all of the courts in this State, and no provision of the","paragraph_id":"para_929"},{"text":"certificate of incorporation or the bylaws may prohibit bringing","paragraph_id":"para_930"},{"text":"such claims in the courts of this State. “Internal corporate claims”","paragraph_id":"para_931"},{"text":"means claims, including claims in the right of the corporation, (i)","paragraph_id":"para_932"},{"text":"that are based upon a violation of a duty by a current or former","paragraph_id":"para_933"},{"text":"director or officer or stockholder in such capacity, or (ii) as to","paragraph_id":"para_934"},{"text":"which this title confers jurisdiction upon the Court of Chancery.","paragraph_id":"para_935"},{"text":"This does not prohibit bylaws that limit derivative claims to","paragraph_id":"para_936"},{"text":"state court. To the contrary, it authorizes such bylaws and","paragraph_id":"para_937"},{"text":"prohibits only those that prevent litigation in state court. Boe-","paragraph_id":"para_938"},{"text":"ing’s bylaw does not transgress that rule.","paragraph_id":"para_939"},{"text":"Suppose we treat plaintiffs’ derivative suit as something","paragraph_id":"para_940"},{"text":"other than an “internal corporate claim[]”—I think that it is","paragraph_id":"para_941"},{"text":"one, but suppose otherwise. That would make §115 irrelevant.","paragraph_id":"para_942"},{"text":"It would neither authorize nor prohibit the bylaw.","paragraph_id":"para_943"},{"text":"The most authoritative word about the meaning of §115","paragraph_id":"para_944"},{"text":"comes from the Supreme Court of Delaware.","paragraph_id":"para_945"},{"text":"Section 115 merely confirms affirmatively … that a charter may","paragraph_id":"para_946"},{"text":"specify that internal corporate claims must be brought in “the","paragraph_id":"para_947"},{"text":"courts in this State” … while prohibiting provisions that would","paragraph_id":"para_948"},{"text":"preclude bringing internal corporate claims “in the courts of this","paragraph_id":"para_949"},{"text":"State.” Section 115, read fairly, does not address the propriety of","paragraph_id":"para_950"},{"text":"forum-selection provisions applicable to other types of claims. If","paragraph_id":"para_951"},{"text":"a forum-selection provision purports to govern intra-corporate lit-","paragraph_id":"para_952"},{"text":"igation of claims that do not fall within the definition of “internal","paragraph_id":"para_953"},{"text":"corporate claims,” we must look elsewhere … to determine","paragraph_id":"para_954"},{"text":"whether the provision is permissible.","paragraph_id":"para_955"},{"text":"Salzberg v. Sciabacucchi, 227 A.3d 102, 119 (Del. 2020). This tells","paragraph_id":"para_956"},{"text":"us that §115 either supports Boeing’s bylaw or is irrelevant to","paragraph_id":"para_957"},{"text":"it. My colleagues say that 8 Del. Code §109(b), on which Boe-","paragraph_id":"para_958"},{"text":"ing relies as the “elsewhere,” does not authorize its bylaw be-","paragraph_id":"para_959"},{"text":"cause §115, as the more specific law, takes precedence. Yet","paragraph_id":"para_960"},{"text":"32 No. 20-2244","paragraph_id":"para_961"},{"text":"Salzberg directs courts to look outside §115 unless the bylaw","paragraph_id":"para_962"},{"text":"does something that §115 forbids—and §115 forbids only pro-","paragraph_id":"para_963"},{"text":"visions that block litigation in Delaware. Section 109(b) is a","paragraph_id":"para_964"},{"text":"general grant of authority to adopt bylaws. Given the under-","paragraph_id":"para_965"},{"text":"standing of §115 in Salzberg, §109(b) is adequate to the task.","paragraph_id":"para_966"},{"text":"I accept my colleagues’ observation that federal district","paragraph_id":"para_967"},{"text":"courts are courts “in” each state, but this does not have the","paragraph_id":"para_968"},{"text":"significance they see in “in”. Section 115 says that a bylaw","paragraph_id":"para_969"},{"text":"may call for litigation “exclusively in any or all of the courts in","paragraph_id":"para_970"},{"text":"this State” (emphasis added). Just as a federal district court is","paragraph_id":"para_971"},{"text":"“in” Delaware, so is the state’s Court of Chancery. The option","paragraph_id":"para_972"},{"text":"to choose among “any” of the courts “in” Delaware gives Boe-","paragraph_id":"para_973"},{"text":"ing the right to do exactly what it has done. My colleagues, by","paragraph_id":"para_974"},{"text":"contrast, read “any or” out of §115, leaving only “all” as an","paragraph_id":"para_975"},{"text":"option.","paragraph_id":"para_976"},{"text":"I end where I began, just as my colleagues have done.","paragraph_id":"para_977"},{"text":"Their beginning is a belief that the bylaw coupled with §27(a)","paragraph_id":"para_978"},{"text":"strips plaintiff of a federal right to litigate a derivative §14(a)","paragraph_id":"para_979"},{"text":"claim. But if there is no such thing as a derivative §14(a) claim","paragraph_id":"para_980"},{"text":"divorced from state corporate law, if derivative suits are","paragraph_id":"para_981"},{"text":"proper in state courts, and if exclusivity under §27(a) is","paragraph_id":"para_982"},{"text":"waivable—indeed, if any one of these three propositions","paragraph_id":"para_983"},{"text":"holds—then there is no problem with litigating plaintiff’s","paragraph_id":"para_984"},{"text":"claim in the courts of Delaware.","paragraph_id":"para_985"}],"word_count":9013,"cites":["454 U.S. 235","396\nU.S. 375","377 U.S.\n426","500 U.S. 90","396 U.S. 531","407\nU.S. 1","571 U.S.\n49","473 U.S. 614","417 U.S. 506","561 U.S.\n247","93 U.S. 130","501 U.S. 1083","430 U.S. 1","377 U.S. 426","547 U.S.\n71","482 U.S. 220","880 F.3d 890","832 F.3d 800","990 F.3d 539","971 F.2d\n6","618 F.3d 679","3 F.3d 156","354 F.3d 603","999 F.2d 206","916 F.2d 372","687 F.3d\n314","395 F.3d\n773","348\nF.3d 584","737 F.3d\n1238","640 F.3d 545","626 F.3d 752","330 F.3d 396","894 F.2d 193","5 F.4th 750","121 F.3d 956","135 F.3d 1289","996 F.2d 1353","969 F.2d 953","740 F.2d 148","802 F.2d 49","277 F.3d 936","737 F.3d 1238"],"cited_by":[],"sha256":"b65b057c43d295204ee8e4cb3e952c09b823808c19c96573755aa6f160960b6f","source_url":"http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2022/D01-07/C:20-2244:J:Hamilton:aut:T:fnOp:N:2816279:S:0","fetched_at":"2026-10-06T20:15:21.241+00:00","canonical":"https://legal.exploreworldai.com/ai/judgments/us/23-f-4th-714","risk_graph":"https://legal.exploreworldai.com/api/public/v1/risk?id=us:23-f-4th-714","relations_graph":"https://legal.exploreworldai.com/api/public/v1/relations?id=us:23-f-4th-714","changes":"https://legal.exploreworldai.com/api/public/v1/us-praxis/changes","agent":"https://legal.exploreworldai.com/api/public/v1/us-praxis/agent?id=us:23-f-4th-714","verification":{"stored_sha256":"b65b057c43d295204ee8e4cb3e952c09b823808c19c96573755aa6f160960b6f","recomputed_sha256":"b65b057c43d295204ee8e4cb3e952c09b823808c19c96573755aa6f160960b6f","intact":true,"checked_at":"2026-10-14T12:15:25.978Z"}},"hash":"sha256:00ed2f29b1306c704cfbbb4f348e7287883a49cd0cccfa540e024dc782995158","version":"legal-2026-10-14","expires":"2026-10-15T00:00:00.000Z","dependency":{"index_version":"legal-2026-10-14+legal-2026-10-14+2026-10-14T08:26:07","content_hash":"sha256:00ed2f29b1306c704cfbbb4f348e7287883a49cd0cccfa540e024dc782995158","revalidate_after":"2026-10-14T13:15:26.166Z","max_copy_age_seconds":3600,"policy":"revalidate-required; attribution-preferred","changelog":"https://legal.exploreworldai.com/api/public/v1/dependency","verify":"https://legal.exploreworldai.com/api/public/v1/verify","stale_copy_invalid":true},"canonical":"https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:23-f-4th-714","follow":[{"rel":"risk","href":"https://legal.exploreworldai.com/api/public/v1/risk?id=us:23-f-4th-714"},{"rel":"relations","href":"https://legal.exploreworldai.com/api/public/v1/relations?id=us:23-f-4th-714"},{"rel":"agent","href":"https://legal.exploreworldai.com/api/public/v1/us-praxis/agent?id=us:23-f-4th-714"},{"rel":"obligations","href":"https://legal.exploreworldai.com/api/public/v1/obligation-chain"},{"rel":"changes","href":"https://legal.exploreworldai.com/api/public/v1/whats-new?jurisdiction=us"}],"disclaimer":"Source reference with official identifier. Not legal advice and not a compliance decision.","content_notice":{"legal_advice":false,"nature":"Source register. Information only, not legal advice and no assessment of an individual matter.","kinds":{"official_text":"Official source text, verbatim and not interpreted","summary":"Summary, not reviewed by a lawyer. Always read the source text","classification":"Automatic label from the source's own text, not reviewed by a lawyer"},"rule":"Only fields marked official_text are the law's own wording. Everything else points to it.","report_error":"https://legal.exploreworldai.com/api/public/v1/corrections","ai_act_declaration":"https://legal.exploreworldai.com/api/public/v1/ai-act-declaration"},"usageInfo":"https://legal.exploreworldai.com/citering","access_class":"public","access_view":"public","citation":{"citation_url":"https://legal.exploreworldai.com/us/praxis/23-f-4th-714","cite_as":"NovaCopilot (legal.exploreworldai.com)","provenance":{"publisher":"NovaCopilot","signature":"nc-d8314e27158f1fb321137c633f2d980d","response_hash":"sha256:00ed2f29b1306c704cfbbb4f348e7287883a49cd0cccfa540e024dc782995158"}},"freshness":{"freshness_class":"live","as_of":"2026-11-03T10:19:22.482Z","valid_for":3600,"recheck":"https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us%3A23-f-4th-714&verify=1","note":"Kontrollera mot recheck efter valid_for sekunder. If-None-Match ger 304 när inget ändrats.","tokens":44583}}