For a time a few years ago, litigation management bylaws were all the rage. Driven by concerns about multi-forum merger-related litigation, commentators proposed company adoption of forum selection bylaws for internal corporate disputes. The debate widened when reformers suggested that companies adopt fee-shifting bylaws. The debate subsided in 2015 when the Delaware legislature adopted legislation authorizing the adopting of bylaws designating Delaware’s courts as the preferred forum for disputes under Delaware, but prohibiting fee-shifting bylaws.
The topic of litigation management bylaws resurfaced in recent months in connection with the debate about plaintiffs lawyers’ resorting to state court (primarily in California) to assert securities class action claims, in reliance on the concurrent jurisdiction provisions under the Section 22 of the Securities Act of 1933. Concerns about this kind of litigation has in turn precipitated various self-help measures companies could adopt to try to avoid getting hauled into state court for these kinds of suits.