The en banc Court of Appeals for the Ninth Circuit affirmed the dismissal of a shareholder derivative action in light of an exclusive-forum bylaw requiring assertion of derivative claims in the Delaware Court of Chancery, even though the plaintiff had pled a federal claim that was subject to exclusive federal jurisdiction and could not have been litigated in the Delaware court. The June 1, 2023 ruling in Lee ex rel. The Gap, Inc. v. Fisher could further encourage the adoption of similar forum-selection provisions and could discourage shareholders’ efforts to circumvent state-forum provisions by filing derivative actions alleging federal-law proxy claims in federal court.
Seventh Circuit
Seventh Circuit Reverses Dismissal of Derivative Action Based on Forum Clause as Applied to Federal Claim
By Jonathan Richman & Joseph Hartunian on
A recent Seventh Circuit decision in Seafarers Pension Plan v. Bradway may complicate defendants’ ability to use forum-selection bylaws as a basis for dismissal of derivative suits pleading claims under the Securities Exchange Act of 1934.
Seventh Circuit Rejects Court Challenge to Pending SEC Administrative Enforcement Proceeding
By Jonathan Richman on
The Seventh Circuit has held that federal district courts do not have subject matter jurisdiction over challenges to ongoing SEC administrative enforcement proceedings where the challenger is already a party to those proceedings. Instead, a party to a pending administrative proceeding must defend against the proceeding and then seek review…