On May 13, 2022, the California Court of Appeal affirmed a decision dismissing a lawsuit filed in state court against Dropbox, its officers, its board of directors, the underwriters, and certain venture capitalists for alleged violations of Section 11 of the Securities Act of 1933 (’33 Act). The suit arose out of Dropbox’s March 2018 IPO, with the plaintiff alleging that Dropbox made false or misleading statements in its registration statement and prospectus. Dropbox moved to dismiss, invoking its Federal Forum Provision (FFP)—a bylaw that states that any lawsuit brought under the ’33 Act must be brought in federal court. Building upon the firm’s win in Salzberg v. Sciabacucchi, in which the Delaware Supreme Court confirmed the validity of FFPs, the California Court of Appeal agreed with the trial court’s ruling that Dropbox’s FFP did not violate the ‘33 Act’s anti-waiver or anti-removal provisions, was constitutional under the Commerce Clause and the Supremacy Clause, and was enforceable under California law. Wilson Sonsini Goodrich & Rosati represented Dropbox in the matter.

The Wilson Sonsini team included Nicki Locker, Steffen Johnson (who argued the case), Evan Seite, John Kenney, Eric Kohan, and Mariana McNamara. In addition, William B. Chandler III argued Salzberg to the Delaware Supreme Court, and Andrew Berni, Jeremy Gagas, and Stacy Love assisted with the trial court briefing.

For more information, please refer to the court’s opinion.