Readers of this blog know that one of the litigation risk management steps well-advised companies are taking in the current litigation environment is the adoption of forum selection bylaws, including, in particular, bylaws specifying a particular forum for the consideration of shareholders’ derivative suits. In a series of recent decisions, federal courts have reviewed these bylaws. In the following guest post, Melanie Saponara, Claims Manager – Executive Risk, Beazley, and Sarah Voutyras, Partner, Skarzynski Marick & Black LLP, take a look at recent federal appellate court developments on this issue and consider the implications. I would like to thank Melanie and Sarah for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
Continue Reading Guest Post: Can Exclusive Derivative Forum Selection Provisions Survive Ninth Circuit’s En Banc Review?
In the wake of the U.S. Supreme Court’s Cyan decision, corporate defendants faced the risk of wasteful and duplicative federal and state court securities litigation. In order to address this concern, corporate reformers suggested that companies should adopt provisions in their corporate charters designating an exclusive federal forum for securities litigation. The Delaware Supreme Court upheld the facial validity under Delaware law of federal forum provisions in the Sciabacucchi decision, but the question remained whether the courts in other jurisdictions would enforce the provisions. A number of courts in California and New York did subsequently uphold the provisions, but these were all trial court rulings.
In an important development affirming the use of federal forum provisions (FFP) to avoid duplicative parallel state court securities lawsuits, a New York state court judge has granted the securities suit defendants’ motion to dismiss based on the FFP in the corporate defendant’s charter. The ruling appears to be the first in New York – indeed, the first outside of California – to enforce an FFP. The New York court’s enforcement of the FFP is a significant step in companies’ efforts to try to avoid the duplicative litigation problems caused by the U.S. Supreme Court’s March 2018 decision in Cyan. A copy of the August 31, 2021 opinion of the New York state court in the Casa Systems case can be found 
In the following guest post, Francis Kean provides us with ten reasons to be cheerful notwithstanding the current D&O insurance market. Francis is a Partner, Financial Lines, at McGill and Partners. A version of this article previously was published Insurance Day. I would like to thank Francis for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Francis’s article.
The directors’ and officers’ liability environment is always changing, but 2020 was a particularly eventful year, with important consequences for the D&O insurance marketplace. The past year’s many developments also have significant implications for what may lie ahead in 2021 – and possibly for years to come. I have set out below the Top Ten D&O Stories of 2020, with a focus on the future implications. Please note that on Wednesday, January 13, 2021 at 11:00 AM EST, my colleague Marissa Streckfus and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2020. Registration for the webinar can be found 
A third California state court has ruled that a provision specifying that federal courts are the exclusive forum for the resolution of ‘33 act liability actions is valid and enforceable. This latest decision — in a state court securities class action lawsuit pending against Dropbox — suggests that a broad consensus is emerging in California court to enforce federal forum provisions. But while the Dropbox decision is largely consistent with the prior California state court decisions enforcing FFP, there are certain features of the Dropbox decision that make it noteworthy and interesting in its own right. A copy of the December 4, 2020 decision in the Dropbox case can be found 
After the Delaware Supreme Court’s 
In March 2018, the U.S. Supreme Court 
The Delaware Supreme Court unanimously held that corporate charter provisions requiring claims under the Securities Act of 1933 to be litigated in federal court are facially valid. These kinds of provisions were proposed after the U.S. Supreme Court’s March 2018 decision in Cyan affirming that state court’s retain concurrent jurisdiction for ’33 Act liability actions. However, in December 2018, the Delaware Chancery Court ruled that federal forum provisions are invalid and unenforceable. In its March 18, 2020 decision (