Skip to main content

Delaware Supreme Court Approves Federal Forum Selection Provision for Securities Act Claims

Posted by on Thursday, May 7, 2020 in Delaware Corporate Law Bulletins, En Banc.

Robert S. Reder | 73 Vand. L. Rev. En Banc 123 (2020) |

“In 2018, the Delaware Court of Chancery (“Chancery Court”) confronted the question of whether a corporation could validly adopt an exclusive forum selection provision requiring that claims under the Securities Act of 1933 (“Securities Act”) be brought in federal rather than state court. In Sciabacucchi v. Salzberg, C.A. No. 2017-0931-JTL, 2018 WL 6719718 (Del. Ch. Ct. Dec. 19, 2018) (“Sciabacucchi I”), Vice Chancellor J. Travis Laster granted summary judgment to a plaintiff who attacked three such forum selection provisions, opining that “[t]he constitutive documents of a Delaware corporation cannot bind a plaintiff to a particular forum when the claim does not involve rights or relationships that were established by or under Delaware’s corporate law.” (For a discussion of Sciabacucchi I, see Robert S. Reder & Jona N. Mays, Delaware Chancery Court Rejects Federal Forum Selection Clause for Securities Act Claims, 72 VAND. L. REV. EN BANC 183 (2019).) However, on appeal in Salzberg v. Sciabacucchi, No. 346, 2019, 2020 WL 1280785 (Del. Mar. 18, 2020) (“Sciabacucchi II”), the Delaware Supreme Court reversed…”

PDF Download Link