Salzberg v. Sciabacucchi

227 A.3d 102 (2020)

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Nature of the Case

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Facts

An example of such a federal-forum provision (FFP) provides: “Unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933. Any person or entity purchasing or otherwise acquiring any interest in any security of [the Company] shall be deemed to have notice of and consented to [this provision].” Sciabacucchi (P) bought shares in companies that had FFP’s attached to them. P filed a putative class-action complaint in the Court of Chancery against the individuals who had served as the companies' directors since they went public, and named the companies as nominal defendants. P sought a declaratory judgment that the federal-forum provisions are invalid under Delaware law. The Court of Chancery granted the motion for summary judgment. The court decided that the '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.' D appealed.