Delaware Court of Chancery Upholds Validity of Forum Selection Bylaws Adopted by Directors of Chevron and FedEx
On June 25, 2013, the Delaware Court of Chancery, in a 47-page opinion by Chancellor Leo E. Strine, Jr., upheld the statutory and contractual validity of forum selection bylaws adopted by the directors of Chevron Corporation and FedEx Corporation. Wilson Sonsini Goodrich & Rosati represented Chevron Corporation in the matter.
Both Chevron Corporation and FedEx Corporation are incorporated in Delaware, and their internal affairs thus are governed by Delaware corporation law. Chancellor Strine's decision settles an important issue of first impression under Delaware law, holding that directors can validly adopt bylaws requiring litigation over matters of internal affairs to be filed in Delaware. The decision therefore has significant implications for corporations and corporate governance, including as a possible answer to the phenomenon of multi-forum shareholder litigation. However, it is likely that Chancellor Strine's decision will be appealed to the Delaware Supreme Court.
For more information, please see the Delaware Court of Chancery's opinion.