Legal Challenges to Exclusive Forum Bylaw Provisions
By Troy M. Calkins and Adam S. Weinstock
A recent wave of lawsuits is challenging what had been a growing
trend of Delaware corporations to include exclusive forum
provisions in their bylaws. These provisions generally require
that, unless the corporation agrees otherwise, the Delaware Court
of Chancery be the sole and exclusive forum for the following types
of claims brought by, against or on behalf of the corporation: (1)
derivative actions, (2) claims asserting a breach of fiduciary
duty, (3) claims arising pursuant to the Delaware General
Corporation Law and/or (4) claims governed by the internal affairs
doctrine.
At the start of 2010, only a handful of Delaware corporations
included exclusive forum provisions in their certificate of
incorporation or bylaws. By the end of 2011, however, nearly 200
Delaware corporations had enacted this type of provision. This
explosion in the adoption of exclusive forum
