1

Filed 5/13/22 Simonton v. Dropbox, Inc. CA1/4

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or 

ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

JON SIMONTON,

Plaintiff and Appellant,

v.

DROPBOX, INC.,

Defendant and Respondent.

A161603

(San Mateo County

Super. Ct. No. 19-CIV-05089)

Plaintiff Jon Simonton, individually and on behalf of others similarly 

situated, appeals a judgment dismissing his action against Dropbox, Inc. 

(Dropbox) alleging violations of the Securities Act of 1933, 15 United States 

Code section 77k (hereafter the 1933 Act). He contends the court erred by

enforcing a provision in Dropbox’s bylaws that designates federal district 

courts as the exclusive forum for claims under the 1933 Act. We find no error 

and affirm the judgment.

Background

The 1933 Act

The 1933 Act, which was enacted “[i]n the wake of the 1929 stock 

market crash . . . to promote honest practices in the securities markets, . . .

require[s] companies offering securities to the public to make ‘full and fair 

disclosure’ of relevant information.” (Cyan, Inc. v. Beaver County Employees 

Ret. Fund (2018) 138 S.Ct. 1061, 1066.) To aid enforcement of those 
2

obligations, the statute created private rights of action and authorized both 

federal and state courts to exercise jurisdiction over those private suits.

(Ibid.; see 15 U.S.C. § 77v(a) [“The district courts of the United States . . .

shall have jurisdiction . . . concurrent with State and Territorial courts . . . of 

all suits in equity and actions at law brought to enforce any liability or duty 

created by this title.”].) “Congress also barred the removal of such actions 

from state to federal court.” (Ibid. [“[N]o case arising under this title and 

brought in any State court of competent jurisdiction shall be removed to any 

court of the United States.”].) Finally, as relevant here, the 1933 Act contains 

the following anti-waiver provision: “Any condition, stipulation, or provision 

binding any person acquiring any security to waive compliance with any 

provision of this title or of the rules and regulations of the Commission shall 

be void.” (15 U.S.C. § 77n.)

Dropbox

Dropbox is a Delaware corporation headquartered in California that

specializes in digital file storage, such as cloud storage of documents and 

photographs. 

In February 2018, in advance of its anticipated initial public offering 

(IPO), Dropbox filed a public registration statement with the Securities 

Exchange Commission.1 The statement advises, “Our amended and restated 

bylaws will designate a state or federal court located within the State of 

Delaware as the exclusive forum for substantially all disputes between us 

and our stockholders, and also provide that the federal district courts will be 

the exclusive forum for resolving any complaint asserting a cause of action 

1 Dropbox’s unopposed request for judicial notice of excerpts of the 

registration statements it filed with the Securities Exchange Commission is 

granted.
3

arising under the Securities Act, each of which could limit our stockholders’ 

ability to choose the judicial forum for disputes with us or our directors, 

officers, or employees.” (Italics omitted.)

In March 2018, Dropbox filed an amended registration statement 

advising potential purchasers that Dropbox had amended its bylaws to 

include the following forum selection provision: “Unless the corporation 

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.” The statement advises that the amended bylaws 

would become effective immediately prior to completion of the IPO. The 

registration statement also advised, “Any person or entity purchasing or 

otherwise acquiring any interest in any security of the corporation shall be 

deemed to have notice of and consented to [this] provision[].”

Dropbox conducted its IPO on March 23, 2018.

The Present Action

Plaintiff’s complaint, filed in September 2019, alleges that the 

registration statement issued in connection with the company’s March 2018 

IPO was inaccurate and misleading and that plaintiff purchased Dropbox 

Class A common stock “pursuant or traceable to” the registration statement. 

The complaint alleges further that he sustained damages due to defendant’s 

violation of the 1933 Act.

2

2 Plaintiff’s action was one of four filed in California state court that 

were consolidated before the San Francisco County Superior Court. Although 

plaintiffs in all of the proceedings appeared in the present appeal, plaintiffs 

in three of the actions have been dismissed. In addition, two nearly identical 

actions were filed in federal court by other stockholder plaintiffs and were 

consolidated in the Northern District federal court. (Deinnocentis v. Dropbox 
4

In May 2020, Dropbox filed a motion to dismiss based on the forum 

selection provision included in its amended bylaws. Following briefing by the 

parties, as well as by two amici curiae, and a hearing, the trial court granted 

the motion to dismiss.

Plaintiff timely filed a notice of appeal.

Discussion

“The proper procedure for enforcing a contractual forum selection 

clause in California is a motion pursuant to [Code of Civil Procedure] section 

410.30. [Citation.] That provision codifies the forum non conveniens doctrine, 

under which a trial court has discretion to decline to exercise its jurisdiction 

over a cause of action that it believes may be more appropriately and justly 

tried elsewhere. [Citations.] Where a section 410.30 motion is ‘based on a 

forum selection clause[,] . . . factors that apply generally to a forum non 

conveniens motion do not control. . . .’ [Citation.] Instead, ‘the test is simply 

whether application of the clause is unfair or unreasonable[; if not,] the 

clause is usually given effect.’ ” (Drulias v. 1st Century Bancshares, Inc. 

(2018) 30 Cal.App.5th 696, 703, fn. omitted (Drulias.).)

Plaintiff challenges the trial court’s enforcement of the forum selection 

provision on several grounds. Plaintiff argues: (1) the forum selection 

provision is barred by the anti-removal and anti-waiver provisions of the 

1933 Act; (2) Delaware’s statutory scheme, which permits a corporation to 

adopt the forum selection provision, violates both the Supremacy and 

Commerce Clauses of the United States Constitution; and (3) the forum 

selection provision is not enforceable under California law.

Inc. (N.D.Cal., Jan. 16, 2020, No. 19-cv-06348-BLF) 2020 U.S. Dist. Lexis

8680 [consolidating Deinnocentis v. Dropbox Inc. (N.D.Cal., No. 3:19-cv06348-BLF) and Pikal v. Dropbox, Inc. (N.D.Cal., No. 3:19-cv-06360-BLF)].)
5

Plaintiff’s arguments regarding interpretation of the 1933 Act and the 

constitutionality of the Delaware statutory scheme are reviewed de novo. 

(Wunderlich v. County of Santa Cruz (2009) 178 Cal.App.4th 680, 694 [“The 

interpretation of constitutional or statutory provisions presents a legal 

question, which we decide de novo.”].) The court’s determination that the 

forum selection provision is enforceable under California law is reviewed for 

an abuse of discretion. (Drulias, supra, 30 Cal.App.5th at p. 704.)

After this appeal was fully briefed and set for oral argument, Division 

Two of this court issued its opinion in Wong v. Restoration Robotics, Inc. (Apr. 

28, 2022, A161489) __ Cal.App.5th __ [2022 Cal.App. Lexis 366] (Restoration 

Robotics). In that case, after the value of the plaintiff’s shares of stock in 

defendant company dropped within months of the company’s initial public 

stock offering, plaintiff brought an action alleging that the company’s offering 

documents contained materially false and misleading statements in violation 

of the 1933 Act. (Id. at p. __ [2022 Cal.App. Lexis 366 at p *1].) As in the 

present case, defendant, a Delaware corporation, successfully moved to 

dismiss plaintiff’s action based on a federal forum selection provision that 

had been added to the company’s bylaws in advance of the public stock 

offering. (Id. at p. __ [2022 Cal.App. Lexis 366 at p. *2].) In affirming the 

judgment of dismissal, the court in Restoration Robotics rejected each of the 

arguments raised by plaintiff in the present action. The parties were given 

the opportunity to address Restoration Robotics in oral argument. As 

discussed below, we agree with the reasoning set forth in Restoration 

Robotics and accordingly shall affirm the judgment.
6

1. The 1933 Act does not bar enforcement of the forum selection 

provision.

Plaintiff contends that enforcement of Dropbox’s forum selection 

provision is barred by the anti-removal and anti-waiver provisions of the 

1933 Act because the provision effectively waives a shareholder’s right to 

bring an action in state court. Although the anti-waiver provision is worded 

broadly, the United States Supreme Court has interpreted it as prohibiting 

agreements to waive only substantive obligations imposed by the act. 

(Rodriguez de Quijas v. Shearson/American Express, Inc. (1989) 490 U.S. 

477, 481–482 (Rodriguez) [1933 Act’s provisions protecting plaintiff’s “right to 

select the judicial forum” are “procedural provisions” not subject to the act’s 

anti-waiver provision]; see also Shearson/American Express, Inc. v. 

McMahon (1987) 482 U.S. 220, 227–228 (McMahon) [identical anti-waiver 

provision in the Securities Exchange Act of 1934, 15 U.S.C. § 78a (Exchange 

Act), “only prohibits waiver of the substantive obligations imposed by the 

Exchange Act”].)3

In McMahon, the court held that a predispute arbitration agreement 

does not violate the anti-waiver provision of the Exchange Act. The court 

explained, “What the antiwaiver provision . . . forbids is enforcement of 

agreements to waive ‘compliance’ with the provisions of the statute. But [the 

provision of the Exchange Act affording exclusive jurisdiction to the federal 

courts] . . . does not impose any duty with which persons trading in securities 

must ‘comply.’ ” (McMahon, supra, 482 U.S. at p. 228.) Accordingly, “its 

waiver does not constitute a waiver of ‘compliance with any provision’ of the 

3 The anti-waiver provision of the Exchange Act reads, “Any condition, 

stipulation, or provision binding any person to waive compliance with any 

provision of this title . . . or of any rule or regulation thereunder, or of any 

rule of a self-regulatory organization, shall be void.” (15 U.S.C. § 78cc(a).)
7

Exchange Act.” (Ibid.) Two years later, relying largely on McMahon, the court 

in Rodriguez held that a predispute agreement to arbitrate claims under the 

Securities Act of 1933 was not barred by the anti-waiver provision of that act.

The court explained that “the right to select the judicial forum and the wider 

choice of courts are not such essential features of the Securities Act that [the 

anti-waiver provision] is properly construed to bar any waiver of these 

provisions.” (Rodriguez, supra, 490 U.S. at p. 481.) The court differentiated 

the substantive provisions of the 1933 Act from the procedural provisions, 

including those that “grant . . . concurrent jurisdiction in the state and 

federal courts without possibility of removal” and concluded that “[t]here is 

no sound basis for construing the prohibition . . . on waiving ‘compliance with 

any provision’ of the Securities Act to apply to these procedural provisions.”

(Id. at p. 482.) 

Although both McMahon and Rodriguez address enforceability of 

arbitration agreements, the same analysis is applicable here.4 (See 

Rodriguez, supra, 490 U.S. at p. 483 [describing arbitration agreements as 

“ ‘in effect, a specialized kind of forum-selection clause’ ”].) Just as in those 

4 Contrary to plaintiff’s argument at oral argument, the absence of a 

written agreement signed by plaintiff does not distinguish the agreement in 

this case from the arbitration agreement in Rodriguez. It is well established 

that a party purchasing stock in a Delaware company agrees to be bound by 

the company’s bylaws. (See Drulias, supra, 30 Cal.App.5th at p. 708, citing 

Roberts v. TriQuint Semiconductor, Inc. (2015) 364 P.3d 328, 337 [“When 

purchasing stock in a Delaware corporation, shareholders buy into a legal 

framework that allows corporate directors to unilaterally amend the 

corporation’s bylaws and gives the shareholders the right to repeal those 

bylaws.”]; North v. McNamara (S.D. Ohio 2014) 47 F.Supp.3d 635, 642, 

fn. omitted [“shareholders . . . consented to the Delaware corporate 

framework by buying shares in a Delaware corporation and agreeing to the 

certificate of incorporation that allowed the board to unilaterally adopt 

bylaws”].)
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cases, Dropbox’s forum selection provision displaces plaintiff’s procedural 

right to bring an action in state court without fear of removal. It does not 

waive Dropbox’s compliance with a substantive obligation under the act. 

Accordingly, enforcement of the forum selection provision is not barred by the

anti-waiver provision of 1933 Act. (Restoration Robotics, supra, __ 

Cal.App.5th at pp. __ [2022 Cal.App. Lexis 366, at pp. *15–*18]; see also

Salzberg v. Sciabacucchi (Del. 2020) 227 A.3d 102, 132 (Salzberg) [noting 

that the court in Rodriguez “held that federal law has no objection to 

provisions that preclude state litigation of Securities Act claims”].)

A different result would be reached if waiver of a procedural provision 

resulted in the denial of a substantive right under the act. (See McMahon, 

supra, 482 U.S. at p. 229 [waiver of a judicial forum may be barred where 

arbitration is inadequate to protect the substantive rights]; see also Seafarers 

Pension Plan v. Bradway (7th Cir. 2022) 23 F.4th 714, 724 [forum-selection 

clause requiring that all derivative suits be brought in Delaware state court

was barred by anti-waiver provision where enforcement would foreclose 

entirely plaintiff’s action under the Exchange Act].) However, requiring that 

the action proceed in federal court does not interfere with any substantive

rights afforded plaintiff under the act.

Finally, contrary to plaintiff’s suggestion, the forum selection provision 

does not conflict with the anti-removal provision of the 1933 Act. (Restoration 

Robotics, supra, __ Cal.App.5th at pp. __ [2022 Cal.App. Lexis 366, at 

pp. *12–*15 ].) The anti-removal provision prohibits a seller of securities from 

removing to federal court a 1933 Act action that a plaintiff has brought in 

state court. The provision reflects the “long and unusually pronounced 

tradition of according authority to state courts over 1933 Act litigation.”

(Cyan v. Beaver County Employees Ret. Fund, supra, 138 S.Ct. at p. 1073.) As 
9

Dropbox argues, however, it is not seeking to remove to federal court a case 

properly filed in state court. It seeks to dismiss the action under Code of Civil 

Procedure section 410.30 based on the validly adopted forum selection 

provision. Moreover, just as the Supreme Court concluded in Rodriguez, 

supra, 490 U.S. at page 483, that the concurrent jurisdiction authorized 

under the 1933 Act can be waived in favor of arbitration, the anti-removal 

provision can be deemed to have been waived by agreeing in advance to a 

federal forum for all 1933 Act claims.

Accordingly, the forum selection provision does not conflict with, and 

thus is not barred by, either the anti-removal or anti-waiver provisions of the 

1933 Act. 

2. Enforcement of the forum selection provision is not 

unconstitutional.

Plaintiff contends the trial court should not have enforced the forum 

selection provision because the Delaware statutory scheme under which the 

forum selection provision was adopted is unconstitutional. He argues that 

this court “should decline to prop up this unconstitutional scheme, and 

should reverse the lower court.” He contends that section 102 of the Delaware 

General Corporation Law (DGCL) violates the Supremacy Clause of the of 

the United States Constitution by authorizing corporations to nullify the 

state court jurisdiction authorized by the 1933 Act and that section 115 of the 

DGCL discriminates against federal claims by prohibiting adoption of a 

forum selection provision that eliminates state court jurisdiction for 

securities claims under Delaware law but permits adoption of a forum 

selection provision that eliminates state court jurisdiction for analogous 

claims under the 1933 Act. He argues further that these provisions 

impermissibly burden interstate commerce in violation of the commerce 
10

clause of the United States Constitution. Dropbox disputes plaintiff’s 

arguments on the merits and argues further that neither adoption nor 

enforcement of the forum selection provision involves “state action” necessary

to support plaintiff’s constitutional claims. 

Background

Corporations incorporated in Delaware are governed by the DGCL. 

Section 102 of the DGCL authorizes a corporation to include in its certificate 

of incorporation “any provision for the management of the business and for 

the conduct of the affairs of the corporation and any provision creating, 

defining, limiting and regulating the powers of the corporation, the directors, 

and the stockholders, or any class of the stockholders, . . . if such provisions 

are not contrary to the laws of this State.” (Del. Code, tit. 8, § 102, subd. 

(b)(1); Salzberg, supra, 227 A.3d at p. 113.) In Salzberg, supra, 227 A.3d at 

page 132, the Delaware Supreme Court held that forum selection provisions

requiring that claims under the 1933 Act be brought in federal court, similar 

to that at issue here, are valid and enforceable under Delaware law. The 

court explained that “a bylaw that seeks to regulate the forum in which . . .

‘intra-corporate’ litigation can occur is a provision that addresses the 

‘management of the business’ and the ‘conduct of the affairs of the 

corporation,’ and is, thus, facially valid” under section 102, subdivision (b)(1) 

of the DGCL. (Salzberg, supra, at p. 114.) In its decision, the court rejected 

the argument that the federal forum selection provision violated section 115 

of the DGCL.

Section 115 of the DGCL provides: “The certificate of incorporation or 

the bylaws may require, consistent with applicable jurisdictional 

requirements, that any or all internal corporate claims shall be brought 

solely and exclusively in any or all of the courts in this State, and no 
11

provision of the certificate of incorporation or the bylaws may prohibit 

bringing such claims in the courts of this State. ‘Internal corporate claims’

means claims, including claims in the right of the corporation, (i) that are 

based upon a violation of a duty by a current or former director or officer or 

stockholder in such capacity, or (ii) as to which this title confers jurisdiction 

upon the Court of Chancery.” (Del. Code, tit. 8, § 115.) In Salzberg, supra, 227 

A.3d at page 109, the court explained, “Section 115 merely confirms 

affirmatively . . . that a charter may specify that internal corporate claims

must be brought in ‘the courts in this State’ (presumably including the 

federal court), while prohibiting provisions that would preclude bringing 

internal corporate claims ‘in the courts of this State.’ Section 115, read fairly, 

does not address the propriety of forum-selection provisions applicable to 

other types of claims. If a forum-selection provision purports to govern intracorporate litigation of claims that do not fall within the definition of ‘internal 

corporate claims,’ we must look elsewhere . . . to determine whether the 

provision is permissible. This is because intra-corporate litigation relates to 

the business of the corporation . . . , and such provision is authorized under 

Delaware law and is facially valid.” (Id. at p. 119, italics added.) 

State Action

Dropbox contends that plaintiff’s constitutional arguments must fail 

because the allegedly unconstitutional conduct is not “fairly attributable” to 

the state of Delaware. (See American Mfrs. Mut. Ins. Co. v. Sullivan (1999) 

526 U.S. 40, 50 [“[S]tate action requires both an alleged constitutional 

deprivation ‘caused by the exercise of some right or privilege created by the 

State or by a rule of conduct imposed by the State or by a person for whom 

the State is responsible,’ and that ‘the party charged with the deprivation 

must be a person who may fairly be said to be a state actor.’ ”].) Dropbox 
12

characterizes the allegedly unconstitutional conduct as its adoption of the 

forum selection provision, which it asserts Delaware allows but does not 

require. Plaintiff asserts, however, that he is not suing Dropbox for adopting 

the forum selection provision. He is challenging the dismissal of his state 

court action based on the enforcement of a bylaw provision he asserts was 

adopted pursuant to an unconstitutional state statute. The requisite state 

action, according to plaintiff, is either the state legislature’s adoption of the 

statute or, as asserted in plaintiff’s reply brief, the trial court’s dismissal of 

this action in reliance on the unconstitutional bylaw. We need not address 

this novel contention because, whether or not state action is involved, 

plaintiff’s constitutional challenges to the Delaware General Corporate law 

are clearly without merit. (But see Restoration Robotics, supra, __ 

Cal.App.5th at pp. __ [2022 Cal.App. Lexis 366, pp. *20–*23 ] [finding no 

state action].)

Supremacy Clause

The Supremacy Clause (U.S. Const., art. VI, cl. 2) “invalidates state 

laws that ‘interfere with, or are contrary to,’ federal law.”

5 (Hillsborough 

County v. Automated Medical Laboratories, Inc. (1985) 471 U.S. 707, 712.)

Plaintiff argues that the Delaware statutory scheme violates the Supremacy 

Clause because it authorizes corporations to nullify the state court 

jurisdiction authorized by the 1933 Act. But nothing in the Delaware 

statutory scheme precludes a plaintiff from bringing a claim under the 1933 

5 The Supremacy Clause reads, “This Constitution, and the Laws of the 

United States which shall be made in Pursuance thereof; and all Treaties 

made, or which shall be made, under the Authority of the United States, shall 

be the supreme Law of the Land; and the Judges in every State shall be 

bound thereby, any Thing in the Constitution or Laws of any State to the 

Contrary notwithstanding.” (U.S. Const., art. VI, cl. 2.)
13

Act in state court. As discussed above, the forum selection provision does not 

violate or conflict with the anti-waiver or anti-removal provisions of the 1933 

Act. Accordingly, insofar as section 102 of the DCGL permits adoption of such 

a bylaw provision, it does not violate or conflict with federal law.

Plaintiff’s argument that the Delaware statutory scheme discriminates 

against federal claims is similarly misplaced. (See Restoration Robotics, 

supra, __ Cal.App.5th at pp. __ [2022 Cal.App. Lexis 366, at pp. *26–*35]

[holding that enforcement of the forum selection provision does not violate 

the Supremacy Clause].) In Salzberg, supra, 227 A.3d 102, the court 

concluded that claims under the 1933 Act do not “come under Section 115’s 

definition of ‘internal corporate claims’ ” and, therefore, are not subject to the 

limitation that section imposes on the adoption of forum selection bylaws. (Id. 

at p. 133, fn. 146.) Plaintiff argues, however, that because section 115 applies

to purportedly analogous state law securities claims, Delaware is 

discriminating against 1933 Act claims by not affording them the same 

guarantee of state court jurisdiction. But the Supremacy Clause does not 

prohibit a state from regulating claims asserted under its state laws that do 

not interfere with or contravene federal law. (See Felder v. Casey (1988) 487 

U.S. 131, 138 [“No one disputes the general and unassailable proposition . . .

that States may establish the rules of procedure governing litigation in their 

own courts.”].)

Plaintiff’s reliance on Haywood v. Drown (2009) 556 U.S. 729 and

Howlett v. Rose (1990) 496 U.S. 356 is misplaced. In both cases, the court held 

unconstitutional a state statute that divested the state courts of jurisdiction

over claims seeking damages under 42 United States Code section 1983. In 

Haywood, the court explained that “although States retain substantial 

leeway to establish the contours of their judicial systems, they lack authority 
14

to nullify a federal right or cause of action they believe is inconsistent with 

their local policies.” (556 U.S. at p. 736.) Nothing in the DCGL divests any 

state court of jurisdiction over a 1933 Act claim. The law permits the parties 

to agree that actions under the 1933 Act will be bought only in federal court, 

but that is very different from divesting state courts of the jurisdiction to 

hear such claims.

Commerce Clause

The Commerce Clause provides that “Congress shall have Power . . .

[t]o regulate Commerce . . . among the several States.” (U.S. Const., art. I, 

§ 8, cl. 3.) The Commerce Clause prohibits direct regulation of interstate 

commerce by the states but permits indirect regulation of interstate 

commerce if the state statute “ ‘regulates evenhandedly to effectuate a 

legitimate local public interest, and its effects on interstate commerce are 

only incidental . . . unless the burden imposed on such commerce is clearly 

excessive in relation to the putative local benefits.’ ” (Edgar v. MITE Corp.

(1982) 457 U.S. 624, 640, quoting Pike v. Bruce Church, Inc. (1970) 397 U.S. 

137, 142.)

Plaintiff acknowledges that the Delaware statutes do not purport to 

directly regulate interstate commerce and that the state does not 

discriminate against out-of-state actors. He contends, however, that the 

Delaware statutes impermissibly burden interstate commerce.We disagree.

(See Restoration Robotics, supra, __ Cal.App.5th at pp. __ [2022 Cal.App. 

Lexis 366, at pp. *23–*26] [holding that enforcement of the forum selection 

provision does not violate the Commerce Clause].)

Plaintiff argues that the “Delaware statutory scheme created a 

corporate power to eliminate, as a forum, state courts for claims arising from 

[an entirely out-of-state] transaction just because the company is 
15

incorporated in Delaware. Such a system indirectly burdens interstate

commerce by permitting corporations to unilaterally condition the interstate

sale of securities on the loss of the right to state court fora with no clear local

Delaware interest in doing so.” (Italics omitted.) Plaintiff fails to explain, 

however, how the forum selection provision at issue, which permits a plaintiff 

to file a 1933 Act claim in the federal courts of any state, would negatively 

affect interstate commerce. (Compare, e.g., Edgar v. MITE Corp., supra, 457 

U.S. 624, 643 [explaining that “[t]he effects of allowing the Illinois Secretary 

of State to block a nationwide tender offer are substantial. Shareholders are 

deprived of the opportunity to sell their shares at a premium. The 

reallocation of economic resources to their highest valued use, a process 

which can improve efficiency and competition, is hindered. The incentive the 

tender offer mechanism provides incumbent management to perform well so 

that stock prices remain high is reduced.”].) We fail to see how any indirect 

impact on commerce that may result from the forum selection provision is 

likely to affect the sales of securities. Moreover, even assuming that the 

forum selection provision imposes some limited burden, plaintiff fails to 

demonstrate that the burden outweighs Delaware’s interest in regulating the 

corporations it charters. 

CTS Corp. v. Dynamics Corp. of America (1987) 481 U.S. 69 is

instructive. In that case, Indiana adopted statutes regulating corporate 

takeovers by allowing independent shareholders to vote as a group to protect 

themselves from the coercive aspects of tender offers. (Id. at pp. 74–75, 91–

92.) The court acknowledged that the statutes had the “potential to hinder 

tender offers” but concluded that the limited effect of Indiana’s statute on 

interstate commerce was justified by Indiana’s interests in defining 

attributes of its corporations’ shares and in protecting shareholders. (Id. at 
16

pp. 89, 94.) The court explained, “Every State in this country has enacted 

laws regulating corporate governance. By prohibiting certain transactions, 

and regulating others, such laws necessarily affect certain aspects of 

interstate commerce. This necessarily is true with respect to corporations 

with shareholders in States other than the State of incorporation. Large 

corporations that are listed on national exchanges, or even regional 

exchanges, will have shareholders in many States and shares that are traded 

frequently. The markets that facilitate this national and international 

participation in ownership of corporations are essential for providing capital 

not only for new enterprises but also for established companies that need to 

expand their businesses. This beneficial free market system depends at its 

core upon the fact that a corporation — except in the rarest situations — is 

organized under, and governed by, the law of a single jurisdiction, 

traditionally the corporate law of the State of its incorporation.” (Id. at 

pp. 89–90.) The court continued, “It thus is an accepted part of the business 

landscape in this country for States to create corporations, to prescribe their 

powers, and to define the rights that are acquired by purchasing their shares. 

A State has an interest in promoting stable relationships among parties 

involved in the corporations it charters, as well as in ensuring that investors 

in such corporations have an effective voice in corporate affairs.” (Id. at 

p. 91.)

As in CTS Corp. v. Dynamics Corp. of America, supra, 481 U.S. 69, the 

Delaware statute governs only corporations chartered under Delaware law.

Plaintiff has offered nothing to show that the state’s interest in regulating

the corporations it charters does not outweigh any limited burden the 

statutes in question may place on interstate commerce. For this reason, 
17

Edgar v. MITE Corp., supra, 457 U.S. 624, relied on by plaintiff, is 

distinguishable.

In Edgar v. MITE Corp., supra, 457 U.S. at pages 627 and 640, the 

court found unconstitutional an Illinois law that regulated the takeover of 

any corporation of which Illinois shareholders own 10 percent of the class of 

securities subject to the takeover offer or for which any two of the following 

conditions are met: the corporation has its principal office in Illinois, is 

organized under Illinois laws, or has at least 10 percent of its stated capital 

and paid-in surplus represented within the state. The court found that the 

Illinois statute violated the commerce clause because “it directly regulates 

and prevents, unless its terms are satisfied, interstate tender offers which in 

turn would generate interstate transactions” and because “the burden the Act 

imposes on interstate commerce is excessive in light of the local interests the 

Act purports to further.” (Ibid.) And, as the court noted in CTS Corp. v. 

Dynamics Corp. of America, supra, 481 U.S. at page 93, unlike the Indiana 

law or the Delaware statutes at issue here, which govern only corporations 

chartered by that state, the Illinois law applied broadly to out-of-state 

corporations as well as to in-state corporations. 

3. The forum selection provision is enforceable.

Initially, the parties dispute whether this court should apply California 

or Delaware law to determine whether the forum selection provision is valid 

and enforceable. Dropbox asserts that the provision was determined to be 

valid under Delaware law in Salzberg, supra, 227 A.3d at page 116 and that 

this court should follow that decision. Plaintiff does not dispute that the 

provision is valid under Delaware law, but asserts that this court should 

instead apply California law. The court concluded that it need not decide the 

conflict of law question because the provision is valid and enforceable even if 
18

California law is applied. We agree. (But see, Restoration Robotics, supra, __ 

Cal.App.5th at pp. __ [2022 Cal.App. Lexis 366, at pp. *35–*37] [holding that 

validity of forum selection provision determined under Delaware Law but 

enforceability is determined under California law].) 

In Drulias, supra, 30 Cal.App.5th at pages 707–708, the court 

explained, “A forum selection clause need not be subject to negotiation to be 

enforceable. [Citations.] Rather, a forum selection clause contained in a 

contract of adhesion, and thus not the subject of bargaining, is ‘enforceable 

absent a showing that it was outside the reasonable expectations of the 

weaker or adhering party or that enforcement would be unduly oppressive or 

unconscionable.’ ” Plaintiff contends that he did not assent to the forum 

selection provision and that purchasers were not given adequate notice of the 

provision, which was “buried in exhibits among hundreds of pages of prolix.” 

He argues, “No ordinary investor had any reason to expect to be bound by [a 

forum selection provision] because concurrent state court jurisdiction without 

the possibility of removal is explicitly provided for in the 1933 Act, as has 

been the case for many, many decades.” However, the registration statements 

filed by Dropbox gave notice of the forum selection provision in a separate 

paragraph in bold, italic font and adequately advised prospective stock 

purchasers that they would be bound by the forum selection provision upon 

the purchase of stock in the IPO. On this evidence the trial court reasonably 

found that when plaintiff purchased his shares, he and all other purchasers

necessarily agreed to the terms of the forum selection provision.6 (See 

6 For this reason, we reject plaintiff’s argument that the forum selection 

provision is invalid under California contract law. Plaintiff’s additional 

argument that the forum selection provision is not a “lawful object” is based 

on the previously rejected arguments that the provision conflicts with the 
19

Restoration Robotics, supra, __ Cal.App.5th at pp. __ [2022 Cal.App. Lexis 

366, at pp. *37-41].)

Contrary to plaintiff’s argument, enforcement of the provision is not 

unreasonable. “In the context of forum selection clauses, enforcement is 

considered unreasonable where ‘the forum selected would be unavailable or 

unable to accomplish substantial justice’ or there is no ‘rational basis’ for the 

selected forum.” (Drulias, supra, 30 Cal.App.5th at p. 707.) As the trial court 

observed, “There cannot be any doubt that federal courts have the expertise,

ability and excellent judges. . . . While plaintiffs point out differences between

federal and state courts, they cannot seriously be arguing that federal courts

cannot fairly and efficiently handle these cases or that they cannot obtain

justice in a federal court. The federal court can provide efficiencies of

coordination through the Panel on Multidistrict Litigation, which are not

possible if cases are filed in state court. Plaintiffs have failed to demonstrate

and could not demonstrate that they will lose substantive rights if these

federal claims are litigated in federal court.”

Finally, we agree with the trial court’s conclusion that the forum 

selection provision is not unconscionable. (See also Restoration Robotics, 

supra, __ Cal.App.5th __ [2022 Cal.App. Lexis 366, at pp. *41-45 ] [holding 

that forum selection provision is not unconscionable].) Unconscionability has 

both procedural and substantive elements, and both must be found for the 

court to refuse to enforce a contract or clause based on unconscionability. 

(Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th

83.) Procedural unconscionability looks at the process surrounding the 

contract formation, and focuses on “oppression” or “surprise” due to unequal 

express provisions of the 1933 Act and is unconstitutional. We need not 

revisit those arguments here.
20

bargaining power. (Id. at p. 114.) Substantive unconscionability applies if the 

contract or an essential provision of the contract is “overly harsh” or has “onesided” results. (Ibid.) Although both procedural and substantive 

unconscionability must be found, they need not be present in the same 

degree. (Ibid.) Unconscionability turns not only on one-sidedness, but also on 

the absence of a reasonable justification. (Stirlen v. Supercuts, Inc. (1997) 51

Cal.App.4th 1519, 1532.)

As the court acknowledged, the agreement has “some procedural 

unconscionability” insofar as it was “drafted by Dropbox, presented on take it 

or leave it basis, and only applies to Securities Act claims.” The trial court 

correctly observed, however, that it was not particularly “unusual or 

surprising that a federal Securities Act claim would be litigated in federal 

court.”

7 In finding a lack of substantive unconscionability, the trial court 

correctly reasoned that given the limited jurisdiction of the federal courts,

application of the provision to only 1933 Act claims was not unreasonable,

and that the provision supported Dropbox’s legitimate business interest in 

consolidating any litigation against it. Finally, as set forth above, the court 

reasoned that the federal courts are fully equipped to fairly and efficiently 

resolve plaintiff’s claims so that plaintiff will not be deprived of any 

substantive rights if his claims are litigated in federal court.

Disposition

The judgment dismissing the action is affirmed.

POLLAK, P. J.

7 The trial court also observed that plaintiff did not show that he did 

not have “a meaningful choice of reasonable alternative investment.” We 

express no opinion as to whether the existence of other stock options tends to 

negate unconscionability.
21

WE CONCUR:

STREETER, J.

BROWN, J.