Court Opinion

ID: 9398998
Source: CourtListenerOpinion
Date Created: 2023-06-01 17:01:03.960273+00
Date Added: 2024-06-11T17:19:37.904910
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

NOELLE LEE, derivatively on behalf          No. 21-15923
of The Gap, Inc,
              Plaintiff-Appellant,            D.C. No.
                                          3:20-cv-06163-SK
 v.

ROBERT J. FISHER; SONIA                       OPINION
SYNGAL; ARTHUR PECK; AMY
BOHUTINSKY; AMY MILES;
ISABELLA D. GOREN; BOB L.
MARTIN; CHRIS O'NEILL;
ELIZABETH A. SMITH; JOHN J.
FISHER; JORGE P. MONTOYA;
MAYO A. SHATTUCK III; TRACY
GARDNER; WILLIAM S. FISHER;
DORIS F. FISHER; THE GAP, INC.,
Nominal Defendant,
             Defendants-Appellees.

         Appeal from the United States District Court
            for the Northern District of California
           Sallie Kim, Magistrate Judge, Presiding

      Argued and Submitted En Banc December 12, 2022
                    Pasadena, California

                     Filed June 1, 2023
2                          LEE V. FISHER

 Before: Mary H. Murguia, Chief Judge, and Sidney R.
Thomas, Sandra S. Ikuta, Jacqueline H. Nguyen, Michelle
T. Friedland, Ryan D. Nelson, Bridget S. Bade, Daniel A.
Bress, Danielle J. Forrest, Patrick J. Bumatay and Salvador
               Mendoza, Jr., Circuit Judges.

                   Opinion by Judge Ikuta;
                Dissent by Judge S.R. Thomas

                          SUMMARY*

              Securities Exchange Act of 1934

     The en banc court affirmed the district court’s judgment
dismissing, on forum non conveniens grounds, Noelle Lee’s
putative derivative action alleging that The Gap, Inc. and
Gap’s directors (collectively “Gap”) violated § 14(a) of the
Securities Exchange Act of 1934 (the Exchange Act) and
Securities and Exchange Commission (SEC) Rule 14a-9 by
making false or misleading statements to shareholders about
its commitment to diversity.
    Gap’s bylaws contain a forum-selection clause stating
that the Delaware Court of Chancery “shall be the sole and
exclusive forum for . . . any derivative action or proceeding
brought on behalf of the Corporation.” Lee, a Gap
shareholder, brought the putative derivative action in a
California district court.

*
 This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                         LEE V. FISHER                       3

    Lee first argued that the forum-selection clause in Gap’s
bylaws is void because it violates the Exchange Act’s
antiwaiver provision, § 29(a), 15 U.S.C. § 78cc(a), which
provides that “[a]ny condition, stipulation, or provision
binding any person to waive compliance with any provision
of this chapter or of any rule or regulation thereunder, . . .
shall be void.” The en banc court disagreed, because Lee
can enforce Gap’s compliance with the substantive
obligations of § 14(a) by bringing a direct action in federal
court. The en banc court rejected Lee’s argument that her
right to bring a derivative § 14(a) action is stymied by Gap’s
forum-selection clause, which alone amounts to Gap
“waiv[ing] compliance with [a] provision of [the Exchange
Act] or of any rule or regulation thereunder.” The en banc
court explained that the Supreme Court made clear in
Shearson/American Express, Inc. v. McMahon, 482 U.S. 220
(1987), that §29(a) forbids only the waiver of substantive
obligations imposed by the Exchange Act, not the waiver of
a particular procedure for enforcing such duties. McMahon
also disposes of Lee’s argument that Gap’s forum-selection
clause is void under § 29(a) because it waives compliance
with § 27(a) of the Exchange Act, which gives federal courts
exclusive jurisdiction over § 14(a) claims.
    Lee next argued that Gap’s forum-selection clause is
unenforceable under M/S Bremen v. Zapata Off-Shore Co.,
407 U.S. 1 (1972), because enforcement would violate the
federal forum’s strong public policy of allowing a
shareholder to bring a § 14(a) derivative action. The
linchpin of Lee’s argument was the Supreme Court’s
decision in J.I. Case Co. v. Borak, 377 U.S. 426 (1964),
which first implied a private right of action allowing a
shareholder to bring a “federal cause of action” to redress the
injury caused by a proxy statement alleged to contain false
4                        LEE V. FISHER

and misleading statements violative of § 14(a) of the
Exchange Act. A close look at Borak in its historical context
and in light of subsequent Supreme Court developments,
however, compels the conclusion that Borak does not
establish a strong public policy to allow shareholders to
bring § 14(a) claims as derivative actions. The en banc court
also rejected Lee’s argument that the forum-selection clause
conflicts with the federal forum’s strong public policy of
giving federal courts exclusive jurisdiction over Exchange
Act claims under § 27(a). The en banc court concluded that
Lee did not carry her heavy burden of showing the sort of
exceptional circumstances that would justify disregarding a
forum-selection clause.
    Lee next argued that Gap’s forum-selection clause is
invalid as a matter of Delaware law under Section 115 of the
Delaware General Corporation Law (DGCL). Because the
effect of Section 115 is important to the en banc court’s
decision here, it elected to exercise its discretion to decide
the issue, notwithstanding that the three-judge panel deemed
the Section 115 issue waived. Because the Delaware
Supreme Court has indicated that federal claims like Lee’s
derivative § 14(a) action are not “internal corporate claims”
as defined in Section 115, and because no language in
Boilermakers Local 154 Retirement Fund v. Chevron Corp.,
73 A.3d 934 (Del. Ch. 2013), Section 115, or the official
synopsis that accompanies Section 115, operates to limit the
scope of what constitutes a permissible forum-selection
bylaw under Section 109(b) of the DGCL, the en banc court
concluded that Gap’s forum-selection clause is valid under
Delaware law.
    The en banc court acknowledged that its decision creates
a circuit split with the Seventh Circuit, see Seafarers Pension
                        LEE V. FISHER                       5

Plan ex rel. Boeing Co. v. Bradway, 23 F.4th 714 (7th Cir.
2022), and did not do so lightly.
    Judge S.R. Thomas, joined by Chief Judge Murguia,
Nguyen, Friedland, and Mendoza, dissented. Judge Thomas
wrote that Gap’s forum-selection bylaw requires that any
derivative actions brought pursuant to the Exchange Act be
adjudicated in the Delaware Court of Chancery. But state
courts lack jurisdiction to hear Exchange Act claims, so the
bylaw provision is a litigation bridge to nowhere, depriving
shareholders of any forum in which to pursue derivative
claims. Judge Thomas wrote that a judge-made federal
policy in favor of enforcing forum-selection clauses cannot
supersede the clear antiwaiver provision enacted by
Congress in the Exchange Act, which voids such a
provision. He wrote that the majority’s conclusion that
Gap’s bylaw is both valid and enforceable conflicts with the
plain language of the Exchange Act.

                        COUNSEL

Yury A. Kolesnikov (argued), Francis A. Bottini Jr., and
Albert Y. Chang, Bottini & Bottini Inc., La Jolla, California,
for Plaintiff-Appellant.
Roman Martinez (argued), Susan E. Engel, Michael
Clemente, and Jordan R. Goldberg, Latham & Watkins LLP,
Washington, D.C.; Elizabeth L. Deeley and Morgan E.
Whitworth, Latham & Watkins, San Francisco, California;
William J. Trach, Latham & Watkins LLP, Boston,
Massachusetts; for Defendants-Appellees.
Allison M. Zieve and Scott L. Nelson, Public Citizen
Litigation Group, Washington, D.C., for Amici Curiae
6                       LEE V. FISHER

Public Citizen, Consumer Federation of America, and Better
Markets.
Jeremy A. Lieberman and Emma Gilmore, Pomerantz LLP,
New York, New York; Jennifer Pafiti, Pomerantz LLP, Los
Angeles, California; Ernest A. Young, Apex, North
Carolina; for Amici Curiae Law Professors.
Jeffrey R. White, American Association for Justice,
Washington, D.C., for Amicus Curiae American Association
for Justice.
Boris Feldman, Doru Gavril, Elise Lopez, and Sigourney
Jellins, Freshfields Bruckhaus Deringer US LLP, Redwood
City, California, for Amici Curiae Professors Joseph A.
Grundfest and Mohsen Manesh.
Anitha Reddy, Wachtell Lipton Rosen & Katz, New York,
New York; Tyler S. Badgley and Janet Galeria, United
States Chamber Litigation Center, Washington, D.C.;
Stephanie Martz, National Retail Federation, Washington,
D.C.; for Amici Curiae The Chamber of Commerce of the
United States of America and the National Retail Federation.
                             LEE V. FISHER                              7

                              OPINION

IKUTA, Circuit Judge:

     Noelle Lee brought an action against The Gap, Inc. and
its directors, “derivatively on behalf of Gap.”1 Lee’s action
alleged that Gap violated § 14(a) of the Securities Exchange
Act of 1934 (the Exchange Act) and Securities and
Exchange Commission (SEC) Rule 14a-9 by making false or
misleading statements to shareholders about its commitment
to diversity. Gap’s bylaws contain a forum-selection clause
stating that the Delaware Court of Chancery “shall be the
sole and exclusive forum for . . . any derivative action or
proceeding brought on behalf of the Corporation.” Lee
nevertheless brought her putative derivative action in a
California district court. The district court granted Gap’s
motion to dismiss Lee’s complaint on forum non conveniens
grounds. Lee’s appeal raises three questions: (1) whether
Gap’s forum-selection clause is void because it violates the
Exchange Act’s antiwaiver provision, § 29(a), 15 U.S.C.
§ 78cc(a); (2) whether the forum-selection clause is
unenforceable under M/S Bremen v. Zapata Off-Shore Co.,
407 U.S. 1 (1972), because enforcement would violate a
strong public policy of the federal forum; and (3) whether
Gap’s bylaw is invalid because it is contrary to Delaware
law. We answer “no” to each question and affirm the district
court.

1
  We refer to the defendants collectively as Gap, but sometimes also refer
to the corporation individually as Gap, where appropriate in context.
8                       LEE V. FISHER

                              I
    The Exchange Act, 15 U.S.C. §§ 78a–78qq, regulates the
trading of securities on national stock exchanges, and
includes a range of prohibitions aimed at “promot[ing]
honest practices in the securities markets.” Cyan, Inc. v.
Beaver Cnty. Emps. Ret. Fund, 138 S. Ct. 1061, 1066 (2018).
The Exchange Act “and its companion legislative
enactments embrace a ‘fundamental purpose . . . to substitute
a philosophy of full disclosure for the philosophy of caveat
emptor and thus to achieve a high standard of business ethics
in the securities industry.’” Affiliated Ute Citizens of Utah
v. United States, 406 U.S. 128, 151 (1972) (citing SEC v.
Cap. Gains Rsch. Bureau, 375 U.S. 180, 186 (1963)
(footnote omitted).
    The Exchange Act provision that forms the basis for
Lee’s federal claim is § 14(a), which states: “It shall be
unlawful for any person, . . . in contravention of such rules
and regulations as the [SEC] may prescribe[,] . . . to solicit
or to permit the use of his name to solicit any proxy or
consent or authorization in respect of any security.” 15
U.S.C. § 78n(a)(1). Rule 14a-9, one of the regulations
promulgated by the SEC to implement § 14(a), provides that
“[n]o solicitation subject to this regulation shall be made by
means of any proxy statement, . . . containing any statement
which, at the time and in the light of the circumstances under
which it is made, is false or misleading with respect to any
material fact.” 17 C.F.R. § 240.14a-9(a).
    The Exchange Act prohibits a range of other deceptive
actions, including price manipulation, §§ 9, 15 U.S.C.
§§ 78i, “short-swing trading” by corporate insiders, 16, 78p,
and making false or misleading statements in reports or
documents filed with the SEC, 18, 78r. Each of these
                             LEE V. FISHER                              9

provisions includes an express private right of action
allowing a shareholder to bring an action against a person
who violates these prohibitions. See §§ 9(c), 15 U.S.C.
§§ 78i(f), 16(b), 78p(b), and 18(a), 78r(a). Unlike these
prohibitions, the Exchange Act “makes no provision for
private recovery for a violation of § 14(a),” Mills v. Elec.
Auto-Lite Co., 396 U.S. 375, 391 (1970), although the
Supreme Court has permitted shareholders to bring such
actions, see J.I. Case Co. v. Borak, 377 U.S. 426, 432 (1964).
     The Exchange Act also includes various provisions that
govern its implementation, including antiwaiver and
jurisdictional provisions. Section 29(a) of the Exchange Act
provides that “[a]ny condition, stipulation, or provision
binding any person to waive compliance with any provision
of this chapter 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). In addition, § 27(a) of the Exchange Act
gives federal courts “exclusive jurisdiction of violations of
this chapter or the rules and regulations thereunder, and of
all suits in equity and actions at law brought to enforce any
liability or duty created by” the Act. Id. § 78aa(a).
                                   II
    We now turn to the facts of this case. Gap, a clothing
retailer headquartered in San Francisco, is incorporated in
Delaware, and therefore governed by Delaware law. See
CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69, 89–90
(1987). Pursuant to Section 109(b) of the Delaware General
Corporation Law (DGCL),2 Gap adopted bylaws setting

2
 Section 109(b) of the DGCL broadly authorizes corporations to adopt
bylaws that “contain any provision, not inconsistent with law or with the
certificate of incorporation, relating to the business of the corporation,
10                            LEE V. FISHER

forth the rules by which it conducts its corporate business.
Gap’s bylaws include a forum-selection clause, which states
in part: “Unless the Corporation consents in writing to the
selection of an alternative forum, the Court of Chancery of
the State of Delaware shall be the sole and exclusive forum
for . . . any derivative action or proceeding brought on behalf
of the Corporation . . . .”
    Gap’s inclusion of a forum-selection clause in its bylaws
is consistent with a modern corporate trend. See Verity
Winship, Shareholder Litigation by Contract, 96 B.U. L.
Rev. 485, 500–04 (2016). In the first decade of the 2000s,
there was an increase in litigation, id., “brought by dispersed
stockholders in different forums, directly or derivatively, to
challenge a single corporate action,” Boilermakers Loc. 154
Ret. Fund v. Chevron Corp., 73 A.3d 934, 944 (Del. Ch.
2013). Because multiforum litigation could impose high
costs and hurt investors, id., many corporations adopted
forum-selection clauses in response, see KT4 Partners LLC
v. Palantir Techs. Inc., 203 A.3d 738, 759 (Del. 2019); see
also Mohsen Manesh & Joseph A. Grundfest, Abandoned
and Split But Never Reversed: Borak and Federal Derivative
Litigation (forthcoming 2023) (manuscript, at 11–12),
online at https://ssrn.com/abstract=4274616.
    Notwithstanding Gap’s forum-selection clause, Lee, a
Gap shareholder, filed a complaint in a California district
court asserting claims “derivatively on behalf of Gap”
against 15 current and former Gap directors. The complaint
alleged a violation of § 14(a) of the Exchange Act and SEC
Rule 14a-9, as well as state-law claims for breach of

the conduct of its affairs, and its rights or powers or the rights or powers
of its stockholders, directors, officers or employees.” 8 Del. C. § 109(b).
                        LEE V. FISHER                     11

fiduciary duty, aiding and abetting a breach of fiduciary
duty, abuse of control, and unjust enrichment. The
gravamen of Lee’s complaint is that Gap filed proxy
statements with the SEC in 2019 and 2020 that contained
misstatements about Gap’s corporate governance, including
its failure to consider diversity in nominating directors and
hiring executives. According to the complaint, “[d]espite
[Gap’s] supposed ‘imperative’ to be inclusive, Gap has
failed to create any meaningful diversity at the very top of
the Company,” and has in fact “deceived stockholders . . . by
repeatedly making false assertions about [its] commitment
to diversity.” The complaint alleged that Gap’s false
statements denied Gap’s shareholders the right to a fully
informed vote. According to the complaint, had Gap’s proxy
statements been truthful about its discriminatory hiring and
compensation practices and its lack of high-level diversity,
then “shareholders would not have voted to reelect Board
members, approve executive compensation packages, and
reject an independent Board chairman.” As a remedy for this
alleged “interfere[nce] with [her] voting rights and choices
at the 2019 and 2020 annual meetings,” Lee sought
injunctive and equitable relief “on behalf of” Gap. Lee did
“not seek any monetary damages for the proxy law
violations.”
    Lee’s complaint is consistent with another modern trend,
in which plaintiffs frame corporate mismanagement claims
that normally arise under state law (including challenges to
corporate policies relating to “ESG [environmental, social,
and governance] issues . . . such as environmentalism, racial
and gender equity, and economic inequality”) as proxy
nondisclosure claims under § 14(a), in order to invoke
exclusive federal jurisdiction and avoid any forum-selection
12                         LEE V. FISHER

clause pointing to a state forum. Robert L. Haig, 8 Bus. &
Com. Litig. Fed. Cts. § 97:14 (5th ed. 2022).
    Gap moved to dismiss Lee’s complaint, and the district
court granted Gap’s motion on grounds of forum non
conveniens, based on Lee’s decision to file her derivative
suit in a California federal court rather than the Delaware
Court of Chancery, as mandated by Gap’s forum-selection
clause.3 After Lee appealed, a three-judge panel affirmed
the district court. Lee v. Fisher, 34 F.4th 777 (9th Cir.),
reh’g en banc granted, opinion vacated sub nom. Lee ex rel.
The Gap, Inc. v. Fisher, 54 F.4th 608 (9th Cir. 2022). We
decided to rehear this case en banc to consider whether a
forum-selection clause in a corporate bylaw can require that
all derivative actions be brought in a state court in the state
of incorporation, effectively prohibiting a § 14(a) derivative
action from being brought in any forum.
    We have jurisdiction under 28 U.S.C. § 1291. We
review a district court’s dismissal of a complaint for failure
to comply with a forum-selection clause for abuse of
discretion, see Yei A. Sun v. Advanced China Healthcare,
Inc., 901 F.3d 1081, 1086 (9th Cir. 2018), and we review
questions of law de novo, including whether the antiwaiver
provisions of federal securities laws void a forum-selection
clause, see Richards v. Lloyd’s of London, 135 F.3d 1289,
1292 (9th Cir. 1998) (en banc).
                                III
   On appeal, Lee argues that the forum-selection clause in
Gap’s bylaws is void because it violates § 29(a), the

3
 In granting Gap’s motion, the district court dismissed Lee’s claims
without prejudice to refiling.
                        LEE V. FISHER                     13

antiwaiver provision of the Exchange Act. She also argues
that the district court erred in dismissing her complaint on
forum non conveniens grounds, because enforcing the
forum-selection clause would violate a strong public policy
of the federal forum. Finally, she argues that Gap’s forum-
selection clause is invalid as a matter of Delaware law under
Section 115 of the DGCL. 8 Del. C. § 115. We address
these arguments in turn.
                             A
    We begin with Lee’s argument that Gap’s forum-
selection clause is void under the Exchange Act’s antiwaiver
provision, § 29(a), which provides that “[a]ny condition,
stipulation, or provision binding any person to waive
compliance with any provision of this chapter or of any rule
or regulation thereunder, . . . shall be void.” 15 U.S.C.
§ 78cc(a). The Supreme Court has interpreted § 29(a) as
prohibiting “only . . . waiver of the substantive obligations
imposed by the Exchange Act.” Shearson/Am. Exp., Inc. v.
McMahon, 482 U.S. 220, 228 (1987). We have held that
§ 29(a) “applies only to express waivers of non-compliance”
with the provisions of the Exchange Act. Facebook, Inc. v.
Pac. Nw. Software, Inc., 640 F.3d 1034, 1041 (9th Cir. 2011)
(cleaned up).
   Applying these interpretations, we must determine
whether the requirement in Gap’s bylaws that “the Court of
Chancery of the State of Delaware shall be the sole and
exclusive forum for . . . any derivative action or proceeding
brought on behalf of the Corporation” authorizes Gap to
waive compliance with the substantive obligation imposed
by § 14(a) and Rule 14a-9, which is the obligation not to
make a false or misleading statement in a proxy statement.
See TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 444
14                          LEE V. FISHER

(1976); see also Desaigoudar v. Meyercord, 223 F.3d 1020,
1022 (9th Cir. 2000). In interpreting Gap’s forum-selection
clause, we apply Delaware’s rules of contract interpretation,
because “[c]orporate charters and bylaws are contracts
among a corporation’s shareholders.” Airgas, Inc. v. Air
Prods. & Chems., Inc., 8 A.3d 1182, 1188 (Del. 2010); see
also Hill Int’l, Inc. v. Opportunity Partners L.P., 119 A.3d
30, 38 (Del. 2015).4 Under these rules of interpretation, the
“[w]ords and phrases used in a bylaw are to be given their
commonly accepted meaning unless the context clearly
requires a different one or unless legal phrases having a
special meaning are used.” Airgas, 8 A.3d at 1188 (citation
and internal quotation marks omitted).
    On its face, Gap’s forum-selection clause does not
constitute an “express waiver[] of non-compliance,” because
the clause does not expressly state that Gap need not comply
with § 14(a) or Rule 14a-9 or the substantive obligations
they impose. Facebook, 640 F.3d at 1041. Nevertheless,
Lee argues that Gap’s forum-selection clause functionally
waives compliance with § 14(a) and Rule 14a-9, even if it
does not do so expressly. She reasons that Gap’s forum-
selection clause requires her to bring a derivative § 14(a)
action in the Court of Chancery. Because § 27(a) of the
Exchange Act provides that federal courts have “exclusive
jurisdiction of violations” of the Exchange Act, 15 U.S.C.

4
  The bylaws are not only a contract among stockholders, but are also
considered “part of a binding broader contract among the directors,
officers and stockholders formed within the statutory framework of the
Delaware General Corporation Law,” Hill Int’l, 119 A.3d at 38, because
“the certificate of incorporation may authorize the board to amend the
bylaws’ terms and that stockholders who invest in such corporations
assent to be bound by board-adopted bylaws when they buy stock in
those corporations,” Boilermakers, 73 A.3d at 940.
                             LEE V. FISHER                             15

§ 78aa(a), enforcing the clause would mandate that the Court
of Chancery dismiss her derivative § 14(a) action. Thus, if
Gap’s forum-selection clause is enforceable, Lee would be
precluded from bringing a derivative § 14(a) action in any
forum. According to Lee, this means that Gap, its
shareholders, directors, and officers have agreed to waive
compliance with the substantive obligations imposed by
§ 14(a) and Rule 14a-9.
    We disagree, because Lee can enforce Gap’s compliance
with the substantive obligations of § 14(a) by bringing a
direct action in federal court.5 The forum-selection clause
makes the Court of Chancery the exclusive forum only as to
a “derivative action or proceeding.” But it does not impose
any limitation on direct actions, and Lee can still bring her
action against Gap under § 14(a) and Rule 14a-9 as a direct
action.
    We reach the conclusion that Lee can bring her action as
a direct action in federal court for the following reasons. The
terms “derivative action” and “direct action” in the forum-
selection clause must be defined according to Delaware

5
  Lee can also enforce the substantive obligation to refrain from making
false or misleading statements in a proxy statement under Delaware law.
It is a “well-recognized proposition that directors of Delaware
corporations are under a fiduciary duty to disclose fully and fairly all
material information within the board’s control when it seeks
shareholder action,” Stroud v. Grace, 606 A.2d 75, 84 (Del. 1992), and
this “duty of full disclosure [applies] in assessing the adequacy of proxy
materials,” id. at 86; see also Appel v. Berkman, 180 A.3d 1055, 1057
(Del. 2018). This Delaware nondisclosure claim aligns with the “broad
remedial purpose” of Rule 14a-9, which is “to ensure disclosures by
corporate management in order to enable the shareholders to make an
informed choice.” TSC Indus., 426 U.S. at 448.
16                            LEE V. FISHER

law.6 See Airgas, 8 A.3d at 1188. Under Delaware law, the
classification of an action as direct or derivative is “based
solely on the following questions: Who suffered the alleged
harm—the corporation or the suing stockholder
individually—and who would receive the benefit of the
recovery or other remedy?” Tooley v. Donaldson, Lufkin &
Jenrette, Inc., 845 A.2d 1031, 1035 (Del. 2004). Under this
test, a “derivative action” is one brought “on behalf of the
corporation for harm done to the corporation,” while a
“direct action” is one where “the stockholder has
demonstrated that . . . she has suffered an injury that is not
dependent on an injury to the corporation.” Id. at 1036. The
“[p]laintiffs’ classification of the suit is not binding,” id. at
1035 (citation omitted), but rather a court must
“independently examine the nature of the wrong alleged and
any potential relief to make its own determination of the
suit’s classification,” id. Lee can bring her action against
Gap under § 14(a) and Rule 14a-9 as a direct action under
the Tooley test, because her complaint is based on the theory
that Gap’s shareholders were denied the right to a fully
informed vote at the 2019 and 2020 annual meetings. Lee
and other shareholders suffered the alleged harm—a proxy
nondisclosure injury in violation of § 14(a) that interfered
with their voting rights and choices—and would receive the
benefit of the remedy—the equitable or injunctive relief
sought in the complaint. This conclusion is confirmed by the

6
  We apply Delaware law not only because we review the forum-
selection clause according to Delaware’s rules of contract interpretation,
but also because we have held that “[t]he characterization of a claim as
direct or derivative is governed by the law of the state of incorporation.”
N.Y.C. Emps. Ret. Sys. v. Jobs, 593 F.3d 1018, 1022 (9th Cir. 2010),
overruled on other grounds by Lacey v. Maricopa Cnty., 693 F.3d 896
(9th Cir. 2012) (en banc).
                              LEE V. FISHER                              17

Delaware Supreme Court’s statement “that where it is
claimed that a duty of disclosure violation impaired the
stockholders’ right to cast an informed vote, that claim is
direct.” In re J.P. Morgan Chase & Co. S’holder Litig., 906
A.2d 766, 772 (Del. 2006); see also Brookfield Asset Mgmt.,
Inc. v. Rosson, 261 A.3d 1251, 1263 n.39 (Del. 2021) (“An
example of harm unique to the stockholders would be a
board failing to disclose all material information when
seeking stockholder action.”).7 We have also recognized
that a claim that “shareholders were deprived of the right to
a fully informed vote . . . is a direct claim” under Delaware
law. Jobs, 593 F.3d at 1022–23.
    Lee does not cite any federal rule or case that would
prevent her from suing Gap directly, rather than derivatively,
under § 14(a) in federal court. To the contrary, under our
caselaw, Lee can sue Gap directly under § 14(a) in two
different ways, “either individually or as [a] representative
of [a] class,” Yamamoto v. Omiya, 564 F.2d 1319, 1323 (9th
Cir. 1977), which is consistent with Delaware Supreme
Court precedent, see Kramer v. W. Pac. Indus., Inc., 546

7
  Lee asserts that she must bring her § 14(a) action as a derivative, rather
than a direct, action in part because it “does not allege that [Gap’s]
conduct harmed shareholders by impacting the stock price.” But under
the Tooley test, such an allegation is neither necessary nor sufficient to
qualify an action as direct. 845 A.2d at 1035. To the contrary,
“[w]ithholding information from shareholders violates their rights even
if” doing so obtains a “highly profitable[] result,” because “[t]o hold
otherwise would be to state that a corporation may request consent from
its shareholders, withhold relevant information, and only be liable for
damages in those situations in which it appears ex post that the company
has suffered financial damages.” In re Tyson Foods, Inc., 919 A.2d 563,
602 (Del. Ch. 2007). “This cannot be, and is not, the law of Delaware.”
Id.; see also In re INFOUSA, Inc. S’holders Litig., 953 A.2d 963, 1001
n.82 (Del. Ch. 2007).
18                            LEE V. FISHER

A.2d 348, 351 (Del. 1998) (holding that a shareholder may
bring a direct action as an individual or as part of “a class [of
shareholders], for injuries done to them in their individual
capacities by corporate fiduciaries” (citation and emphasis
omitted)).
    Therefore, because Lee’s action to enforce the
substantive obligations imposed by § 14(a) and Rule 14a-9
can be brought as a direct action, there is no basis for her
argument that Gap’s forum-selection clause (which, by its
terms, has no impact on direct actions) effects a functional
waiver of compliance with the substantive obligations
imposed by § 14(a) and Rule 14a-9.8
    Lee raises a second argument as to why the forum-
selection clause conflicts with § 29(a)’s antiwaiver
provision: that regardless whether she can bring a direct
§ 14(a) action against Gap, her right to bring a derivative
§ 14(a) action is stymied by Gap’s forum-selection clause,

8
  The dissent argues that because we conclude that Lee can bring her §
14(a) action as a direct action, Gap’s forum-selection clause has no effect
(because it applies only to derivative actions), and thus her action “must
remain in federal court.” Dissent 62 n.2. This argument is meritless.
Although Lee could have brought her § 14(a) action as a direct action,
she has not done so, nor has she asked us to recharacterize her current
complaint as raising a direct action. Indeed, Lee has steadfastly asserted
in her briefs and at oral argument that her complaint brings only a
derivative § 14(a) action. Lee “is the master of h[er] complaint, and [s]he
owns the allegations that have landed” her within the scope of Gap’s
forum-selection clause. Greene v. Harley-Davidson, Inc., 965 F.3d 767,
774 (9th Cir. 2020). Therefore, our statement that Lee’s § 14(a) action
would be categorized as direct under Delaware law merely points out
that Lee could enforce Gap’s compliance with § 14(a) in a direct action
in federal court, and cannot show that the forum-selection clause effects
an express or implied waiver of the substantive obligations imposed by
§ 14(a), such as would violate § 29(a)’s antiwaiver provision.
                         LEE V. FISHER                       19

which alone amounts to Gap “waiv[ing] compliance with [a]
provision of [the Exchange Act] or of any rule or regulation
thereunder.” 15 U.S.C. § 78cc(a).
    This argument fails because, as the Supreme Court made
clear in McMahon, § 29(a) forbids only the “waiver of the
substantive obligations imposed by the Exchange Act,” not
the waiver of a particular procedure for enforcing such
duties. 482 U.S. at 228. In McMahon, investors argued that
an arbitration agreement in a brokerage contract was
unenforceable under § 29(a), on the ground that the
“arbitration agreement effect[ed] an impermissible waiver of
the substantive protections of the Exchange Act.” Id. at 229.
The Court rejected this argument, because the investors
could still raise their substantive Exchange Act claims in the
arbitral forum, which “provide[d] an adequate means of
enforcing” them. Id. Therefore, the Court concluded that
the arbitration agreement would not “weaken[] [the
investors’] ability to recover under the [Exchange] Act.” Id.
at 229–30 (citation omitted).
     The same reasoning is applicable here. Like the
arbitration clause in McMahon, Gap’s forum-selection
clause does not waive Gap’s compliance with any
substantive obligation (meaning any “statutory duty,” id. at
230) imposed by the Exchange Act. A shareholder can
enforce Gap’s statutory duty to comply with § 14(a) by
means of a direct action in federal court, just as the investors
in McMahon could enforce compliance with Exchange Act
duties in an arbitral forum. An agreement to use a particular
procedure for bringing a claim—arbitration instead of
litigation, or a direct action instead of a derivative action—
does not constitute a waiver of a substantive obligation for
purposes of § 29(a). See id. at 232 (stating that arbitration’s
“streamlined procedures . . . do not entail any consequential
20                            LEE V. FISHER

restriction on substantive rights”). Nor does a provision that
functionally requires the use of a direct action to enforce
Gap’s disclosure obligations “weaken[] [Lee’s] ability to
recover under the [Exchange] Act.” Id. at 230. Lee does not
explain how a direct action would be harder to prosecute
than a derivative § 14(a) action in this context. To the
contrary, “[t]he exacting procedural prerequisites to the
prosecution of a derivative action create incentives for
plaintiffs to characterize their claims as ‘direct’ or
‘individual.’”9 Agostino v. Hicks, 845 A.2d 1110, 1117 (Del.
Ch. 2004). The dissent likewise fails to explain how the
forum-selection clause would foreclose or otherwise impair
Lee’s ability to bring her § 14(a) action.
    McMahon also disposes of Lee’s argument that Gap’s
forum-selection clause is void under § 29(a) because it
waives compliance with § 27(a), which gives federal courts
exclusive jurisdiction over § 14(a) claims. This same
argument was raised in McMahon, in which the investors
claimed that the requirement that claims be heard in an
arbitral forum constituted a waiver of § 27(a)’s grant of
exclusive jurisdiction to federal courts. 482 U.S. at 227–28.
The Supreme Court rejected this argument, holding that,
“[b]y its terms, § 29(a) only prohibits waiver of the
substantive obligations imposed by the Exchange Act,” and
“[b]ecause § 27 does not impose any statutory duties, its

9
  A plaintiff asserting a derivative action in federal court must file a
verified complaint alleging that: (1) “the plaintiff was a shareholder . . .
at the time of the transaction complained of”; (2) “the action is not a
collusive one to confer jurisdiction that the court would otherwise lack”;
and (3) “state with particularity (A) any effort by the plaintiff to obtain
the desired action from the directors or comparable authority . . . ; and
(B) the reasons for not obtaining the action or not making the effort.”
Fed R. Civ. P. 23.1(b).
                         LEE V. FISHER                       21

waiver does not constitute a waiver of ‘compliance with any
provision’ of the Exchange Act under § 29(a).” Id. at 228.
Under McMahon, therefore, § 29(a) does not prohibit waiver
of § 27(a). See Rodriguez de Quijas v. Shearson/Am. Exp.,
Inc., 490 U.S. 477, 482 (1989) (confirming McMahon’s
holding that § 29(a) does not prohibit waiver of
jurisdictional provisions such as § 27(a)). Lee attempts to
distinguish McMahon on the ground that it “concerned the
enforceability of a predispute arbitration agreement, not [a]
forum-selection clause.” This argument is unavailing,
because “[a]n agreement to arbitrate . . . is, in effect, a
specialized kind of forum-selection clause.” Scherk v.
Alberto-Culver Co., 417 U.S. 506, 519 (1974).
    We also reject the dissent’s argument that the forum-
selection clause is unenforceable because Gap’s
shareholders —whether they are “sophisticated parties” or
not, Dissent 66—did not “consent” to its inclusion in the
corporate bylaws, Dissent 65, and had “no opportunity to
negotiate the content of the bylaws or alter terms not to their
liking.” Dissent 66. This argument fails as a matter of both
federal and Delaware law. The Supreme Court has expressly
rejected the “determination that a nonnegotiated forum-
selection clause in a . . . contract is never enforceable simply
because it is not the subject of bargaining.” Carnival Cruise
Lines, Inc. v. Shute, 499 U.S. 585, 593 (1991). We have
likewise held that “a differential in power or education on a
non-negotiated contract will not vitiate a forum selection
clause.” Murphy v. Schneider Nat’l, Inc., 362 F.3d 1133,
1141 (9th Cir. 2004). And because “state law governs the
validity of a forum-selection clause just like any other
contract clause,” DePuy Synthes Sales, Inc. v. Howmedica
Osteonics Corp., 28 F.4th 956, 963–64 (9th Cir.), cert.
denied, 143 S. Ct. 536 (2022), it is even more significant that
22                          LEE V. FISHER

Delaware courts have not agreed with the dissent’s
reasoning. In Boilermakers, the court rejected the plaintiff’s
claim that “forum selection bylaws by their nature are
different and cannot be adopted by the board unilaterally,”
73 A.3d at 954, and stated that, “[u]nlike cruise ship
passengers, who have no mechanism by which to change
their tickets’ terms and conditions, stockholders retain the
right to modify the corporation’s bylaws,” id. at 957–58
(discussing Carnival Cruise Lines, 499 U.S. at 594–95). As
a result, Boilermakers held that, “[l]ike any other bylaw,
which may be unilaterally adopted by the board and
subsequently modified by stockholders, [forum-selection]
bylaws are enforced according to their terms.” Id. at 958.
Thus, contrary to the dissent, the fact that Gap’s forum-
selection clause is located in Gap’s bylaws does not render
it “nonconsensual” and therefore void. Dissent 67.
    Because Gap’s forum-selection clause does not waive
Gap’s compliance with the substantive obligations imposed
by § 14(a) and Rule 14a-9, we conclude that the clause is not
void under § 29(a).10

10
   The dissent has failed to identify any § 14(a) claim that cannot be
brought as a direct action, and therefore has failed to show that the
unavailability of a derivative § 14(a) action precludes enforcement of
any substantive obligation arising under § 14(a). Accordingly, the
dissent’s observation that “[d]irect and derivative suits are not
interchangeable,” Dissent 60, is irrelevant here. Because § 29(a)’s
antiwaiver provision is concerned only with waiver of the substantive
obligations imposed by the Exchange Act, the availability of any
particular method of enforcing those obligations is not material. See
McMahon, 482 U.S. at 228.
                              LEE V. FISHER                             23

                                    B
    We now turn to Lee’s argument that Gap’s forum-
selection clause cannot be enforced under the doctrine of
forum non conveniens because doing so would violate the
federal forum’s strong public policy of allowing a
shareholder to bring a § 14(a) derivative action.
    “[T]he enforceability of a forum-selection clause in a
federal court is a well-established matter of federal law . . .
.” DePuy Synthes Sales, 28 F.4th at 962 (emphasis omitted).
Because § 29(a) does not void Gap’s forum-selection clause,
it is enforceable “through the doctrine of forum non
conveniens” unless an exception applies. Atl. Marine Const.
Co. v. U.S. Dist. Ct. for W. Dist. of Texas, 571 U.S. 49, 60
(2013). “When the parties have agreed to a valid forum-
selection clause, a district court should ordinarily transfer the
case to the forum specified in that clause.” Id. at 62. There
is a narrow exception to this general rule if the plaintiff can
demonstrate “extraordinary circumstances unrelated to the
convenience of the parties [that] clearly disfavor a transfer.”
Id. at 52. One such extraordinary circumstance arises when
the plaintiff makes a strong showing that “enforcement
would contravene a strong public policy of the forum in
which suit is brought, whether declared by statute or by
judicial decision.” M/S Bremen, 407 U.S. at 15.11 The
plaintiff bears the burden of showing why the court should

11
   The other exceptions to the general rule arise when the plaintiff makes
a strong showing that the clause is invalid due to “fraud or overreaching,”
M/S Bremen, 407 U.S. at 15, or that “trial in the contractual forum will
be so gravely difficult and inconvenient that [the litigant] will for all
practical purposes be deprived of his day in court,” id. at 18.
24                        LEE V. FISHER

not transfer the case to the forum identified in the forum-
selection clause. Atl. Marine, 571 U.S. at 64.
    Lee argues that an extraordinary circumstance is present
here. She claims that enforcing Gap’s forum-selection
clause would violate the federal forum’s strong public
policy, declared both by the Exchange Act and by judicial
decision, “of the shareholders’ right . . . to bring a derivative
[§ 14(a)] action,” which can be brought only in federal court.
Her argument proceeds as follows. Lee first asserts that
Congress placed high importance on corporate compliance
with the Exchange Act, as evidenced by the fact that
Congress prohibited the waiver of the Exchange Act’s
substantive obligations, see § 29(a), and conferred exclusive
federal jurisdiction over Exchange Act claims, see § 27(a).
Although the Exchange Act itself does not provide a private
right of action to enforce § 14(a), see Mills, 396 U.S. at 391,
Lee next contends that the Supreme Court’s decision in
Borak was intended to further Congress’s policy goals by
allowing for “[p]rivate enforcement of the proxy rules”
under § 14(a) as “a necessary supplement to [SEC] action,”
377 U.S. at 432. She then claims that Borak reflects a strong
public policy to give shareholders a right to bring both a
direct and a derivative action to enforce § 14(a). Lee
concludes by asserting that enforcing Gap’s forum-selection
clause would contravene this policy.
                               1
    The linchpin of Lee’s argument is the Supreme Court’s
decision in Borak, which first implied a private right of
action allowing a shareholder to bring a “federal cause of
action” to redress the injury caused by a “proxy statement
alleged to contain false and misleading statements violative
of § 14(a) of the [Exchange] Act.” 377 U.S. at 428. A close
                         LEE V. FISHER                      25

look at Borak in its historical context and in light of
subsequent Supreme Court developments, however,
compels the conclusion that Borak does not establish a
strong public policy to allow shareholders to bring § 14(a)
claims as derivative actions.
    In Borak, a shareholder brought a direct § 14(a) action
against the directors of a corporation, alleging that the
directors had circulated materially misleading proxy
statements in order to secure approval of a merger. 377 U.S.
at 427. The shareholder alleged that “the merger would not
have been approved but for the false and misleading
statements in the proxy solicitation material; and that [the]
stockholders were damaged thereby.” Id. at 430. In
considering this claim, Borak examined Congress’s policy
goals in enacting § 14(a), and concluded that Congress
intended § 14(a) “to prevent the recurrence of abuses which
had frustrated the free exercise of the voting rights of
stockholders,” because Congress understood that “fair
corporate suffrage is an important right that should attach to
every equity security bought on a public exchange.” Id. at
431 (cleaned up).         Borak therefore ruled that the
shareholders could bring their action under § 14(a), because
such an implied private right of action was necessary in order
to ensure that shareholders do not receive “deceptive or
inadequate disclosure[s] in proxy solicitation[s]” so that they
can make informed votes on corporate matters requiring
their approval. Id. Because the SEC did not have the
resources to evaluate every proxy statement and enforce the
requirements of § 14(a) on its own, “[p]rivate enforcement
of the proxy rules [would] provide[] a necessary supplement
to [SEC] action.” Id. at 432.
    After holding that a shareholder had the right to bring a
direct action under § 14(a), Borak appended a less well-
26                        LEE V. FISHER

reasoned statement that a shareholder could also bring a
derivative § 14(a) action. Even though the shareholder in
Borak “contend[ed] that his . . . claim [wa]s not a derivative
one,” the Court stated that it believed “a right of action exists
as to both derivative and direct causes.” Id. at 431. The
Court reasoned that “[t]he injury which a stockholder suffers
from corporate action pursuant to a deceptive proxy
solicitation ordinarily flows from the damage done the
corporation, rather than from the damage inflicted directly
upon the stockholder,” and explained that this was because
“[t]he damage suffered results not from the deceit practiced
on him alone but rather from the deceit practiced on the
stockholders as a group.” Id. at 432. The Court concluded
that “[t]o hold that derivative actions are not within the
sweep of the section would therefore be tantamount to a
denial of private relief.” Id.
    Even at the time Borak was decided, these statements did
not square with the Supreme Court’s jurisprudence
regarding derivative actions. Nor did Borak attempt to
harmonize its statements on derivative actions with the
Court’s precedent.
    Some background on the history of derivative actions is
instructive. A derivative action is a judge-made legal
mechanism first developed by the English Court of Chancery
to give shareholders the ability to address alleged wrongs
committed by those in control of the corporation. See Ann
M. Scarlett, Shareholder Derivative Litigation’s Historical
and Normative Foundations, 61 Buff. L. Rev. 837, 842, 848
(2013). Judicial understanding of this mechanism evolved
over time. Early state-court cases sometimes characterized
such suits as representative actions, in which one
shareholder was permitted to represent all other shareholders
in pursuing a remedy when corporate managers engaged in
                             LEE V. FISHER                            27

fraud, self-dealing, or other misconduct. See, e.g., Peabody
v. Flint, 88 Mass. 52, 56–57 (1863); see also Allen v. Curtis,
26 Conn. 456, 459–62 (1857); Hersey v. Veazie, 24 Me. 9,
11–12 (1844). But long before Borak was decided, this type
of action was generally characterized in federal court as a
suit by a shareholder raising a corporation’s legal claims, on
the corporation’s behalf, when the corporation failed to do
so. See, e.g., Hawes v. City of Oakland, 104 U.S. 450, 454
(1881) (recognizing a category of lawsuits that “permits the
stockholder in [a] corporation[] to step in between that
corporation and the party with whom it has been dealing and
institute and control a suit in which the rights involved are
those of the corporation”). Subsequent Supreme Court cases
confirmed that “the term derivative action . . . appl[ied] only
to those actions in which the right claimed by the shareholder
is one the corporation could itself have enforced in court.”
Daily Income Fund, Inc. v. Fox, 464 U.S. 523, 529 (1984);
see also Cohen v. Beneficial Indus. Loan Corp., 337 U.S.
541, 548 (1949). Soon after Hawes, the Supreme Court
codified this understanding of derivative actions, first in
Equity Rule 94 (1882), next in Equity Rule 27 (1912), and
then in Rule 23(b) of the Federal Rules of Civil Procedure
(1937). See Daily Income Fund, 464 U.S. at 530 n.5. By
1966, the procedural rules for a derivative action were
adopted in Rule 23.1 of the Federal Rules of Civil Procedure,
where they remain in substantially the same form today.
Fed. R. Civ. P. 23.1.12

12
  Rule 23.1“applies when one or more shareholders or members of a
corporation or an unincorporated association bring a derivative action to
enforce a right that the corporation or association may properly assert
but has failed to enforce.” Fed. R. Civ. P. 23.1(a).
28                      LEE V. FISHER

    Borak’s statement about the availability of derivative
actions is unsupported by reasoning or explanation regarding
how a derivative § 14(a) action fit into this established
judicial framework. Most important, although Borak
recognized that § 14(a) protected a shareholder’s right to
receive accurate proxy statements, and that such a right was
necessary for “the free exercise of the voting rights of
stockholders,” 377 U.S. at 431, it failed to explain how a
corporation would itself have a right to bring a § 14(a) claim
that it could enforce in court, which was the basis for a
derivative action under the prevailing caselaw. Instead,
Borak’s statement that the shareholder’s injury flows “from
the deceit practiced on the stockholders as a group,” id. at
432, seems to hark back to the earlier view of a derivative
action as a representative action that allowed one
shareholder to represent all other shareholders in pursuing a
remedy for improper actions by corporate managers. Nor
did Borak explain how the lack of a derivative action was
“tantamount to a denial of private relief,” id., given that a
shareholder could bring a direct action under § 14(a),
including in a representative action. Finally, Borak failed to
explain how the availability of a derivative action would
apply to the shareholder in that case, who explicitly brought
only a direct action. Id. at 431. Thus, the Court’s discussion
regarding derivative actions was “unnecessary to the
announcement or application of the rule [Borak]
established,” and therefore dicta. Murr v. Wisconsin, 137 S.
Ct. 1933, 1946 (2017); see also Parents Involved in Cmty.
Schs. v. Seattle Sch. Dist. No. 1, 551 U.S. 701, 738 (2007).
    Perhaps because Borak’s discussion of a derivative
§ 14(a) action was not well-explained or well-reasoned, or
because Borak did not explain how such an action was
consistent with then-current Supreme Court rules and
                             LEE V. FISHER                            29

precedent, subsequent Supreme Court cases did not further
address or develop the availability of this sort of remedy. No
Supreme Court decision since Borak has expressly
addressed this issue. In Mills, the Court observed that the
plaintiff “asserted the right to complain of th[e] alleged
[§ 14(a)] violation both derivatively on behalf of [the
corporation] and as representatives of the class of all its
minority shareholders,” but did not classify the plaintiff’s
action as one or the other, nor set forth a legal framework for
doing so.13 396 U.S. at 378. The two other post-Borak
Supreme Court cases involving a § 14(a) action did not
specify whether the action was direct or derivative. See TSC
Indus., 426 U.S. at 440–43; Va. Bankshares, Inc. v.
Sandberg, 501 U.S. 1083, 1099 (1991) (“[Borak] did not
itself . . . define the class of plaintiffs eligible to sue under
§ 14(a). But its general holding [was]. . . that a private cause
of action was available to some shareholder class[.]”
(emphasis added)).
    Therefore, Borak’s statement that a shareholder could
bring a derivative § 14(a) action, which was not necessary to
decide that case, and not addressed in subsequent Supreme
Court cases, does not establish a strong public policy in favor
of such actions.
                                   2
    Two developments in Supreme Court jurisprudence
since Borak further undermine that case’s reasoning, and

13
   Mills stated that the plaintiff had a “derivative right to invoke [the
corporation’s] status as a party to the [challenged merger] agreement” at
issue under § 29(b) of the Exchange Act, 15 U.S.C. § 78cc(b), but it did
not address whether a derivative action was available under § 14(a). 396
U.S. at 388 (cleaned up).
30                       LEE V. FISHER

thus further vitiate Lee’s assertion that there is a strong
public policy of the federal forum allowing shareholders to
bring derivative § 14(a) actions.
    First, in stating that there was an implied right to bring a
derivative § 14(a) action as a matter of federal common law,
Borak failed to consider the role of state law in governing
the permissible scope of corporate conduct. After Borak was
decided, the Supreme Court held that federal courts are to
“presum[e] that state law should be incorporated into federal
common law,” particularly in areas like corporation law, “in
which private parties have entered legal relationships with
the expectation that their rights and obligations would be
governed by state-law standards.” Kamen v. Kemper Fin.
Servs., Inc., 500 U.S. 90, 98 (1991). Absent contrary
congressional intent, “gaps in [federal] statutes bearing on
the allocation of governing power within the corporation
should be filled with state law ‘unless the state law permits
action prohibited by the Acts, or unless its application would
be inconsistent with the federal policy underlying the cause
of action.’” Id. at 99 (cleaned up) (quoting Burks v. Lasker,
441 U.S. 471, 479 (1979)). Because derivative suits involve
the allocation of power between shareholders and directors,
see Kamen, 500 U.S. at 98, federal courts must ordinarily
look to the law of the state of incorporation to determine both
the authority of directors to control derivative actions, see
Burks, 441 U.S. at 479, and the procedures for bringing such
actions, even when they arise under federal law, see Kamen,
500 U.S. at 99.
     Because gaps in federal securities statutes are generally
filled with state law, see Kamen, 500 U.S. at 98, 108,
Delaware law is relevant for determining whether
shareholders may bring a derivative action to enforce a claim
under § 14(a). Borak’s statement that a § 14(a) action could
                             LEE V. FISHER                             31

be brought as a derivative action on behalf of a corporation
has been displaced by current developments in Delaware
law. See supra Section III.A. The Delaware Supreme Court
has held that a shareholder may bring a derivative action on
behalf of the corporation only if the corporation suffered the
alleged harm and the corporation would receive the benefit
of the recovery or other remedy. See Tooley, 845 A.2d at
1039.14 Applying this rule, the Delaware Supreme Court has
concluded that an action asserting that “a duty of disclosure
violation impaired the stockholders’ right to cast an
informed vote” is a direct action. In re J.P. Morgan Chase,
906 A.2d at 772. Therefore, the injury caused by a violation
of § 14(a) gives rise to a direct action under Delaware law,
not a derivative action. Nor is this application of the
Delaware rule “inconsistent with the federal policy
underlying the cause of action.” Kamen, 500 U.S. at 99.
Rather, because a direct § 14(a) action will satisfy the policy
goal identified in Borak—to ensure that private parties can
supplement SEC enforcement actions—the application of
Delaware’s rule is entirely consistent with the federal policy
underlying the implied § 14(a) cause of action. See id.
Therefore, Delaware’s rule as stated in Tooley supersedes
the federal common law rule proclaimed in Borak. Id. This
development further undermines Lee’s claim that there is a
strong public policy of the federal forum to give
shareholders a derivative § 14(a) action in this context.

14
   In reaching this conclusion, Tooley explained that an action is not
considered derivative under Delaware law merely because “the injury
falls equally upon all stockholders.” 845 A.2d at 1037. This ruling is
directly contrary to Borak’s reasoning that a § 14(a) action should be
classified as derivative if the damage to the corporation flowed “from the
deceit practiced on the stockholders as a group.” 337 U.S. at 432.
32                       LEE V. FISHER

                              3
    A second development undermining Borak’s reasoning
is the Supreme Court’s shift away from implying private
rights of action. As the Supreme Court explained, Borak was
decided during a time when the prevailing law “assumed it
to be a proper judicial function to ‘provide such remedies as
are necessary to make effective’ a statute’s purpose.” Ziglar
v. Abbasi, 137 S. Ct. 1843, 1855 (2017) (quoting Borak, 377
U.S. at 433). But the Court has since “adopted a far more
cautious course before finding implied causes of action,”
clarifying that, “when deciding whether to recognize an
implied cause of action, the ‘determinative’ question is one
of statutory intent,” id. (quoting Alexander v. Sandoval, 532
U.S. 275, 286 (2001)), and that “[i]f the statute does not
itself” provide that “Congress intended to create the private
right of action asserted,” no such action will “be created
through judicial mandate,” id. at 1856 (internal citation
removed). In the specific context of § 14(a) actions, the
Court has also expressed second thoughts as to the propriety
of establishing an implied private right of action, noting that
it “would have trouble inferring any congressional urgency
to depend on implied private actions to deter violations of
§ 14(a), when Congress expressly provided private rights of
action in §§ 9(e), 16(b), and 18(a) of the same Act.” Va.
Bankshares, 501 U.S. at 1104; see also Touche Ross & Co.
v. Redington, 442 U.S. 560, 572 (1979) (“[W]hen Congress
wished to provide a private damage remedy [in the Exchange
Act], it knew how to do so and did so expressly.”).
    Consistent with these reservations about implying
private rights of action, the Supreme Court has suggested
that private actions under § 14(a) should be interpreted
narrowly. In Piper v Chris-Craft Industries, Inc., the Court
considered an action brought under § 14(e) of the Exchange
                          LEE V. FISHER                       33

Act, 15 U.S.C. § 78n(e), a provision which is similar to
§ 14(a) in that it prohibits misleading information in tender
offers to shareholders. 430 U.S. 1, 24 (1977). The Court
held that because the “sole purpose” of § 14(e) is to protect
shareholders, id. at 35, Congress did not intend to create a
remedy in favor of parties other than shareholders, such as
defeated tender offerors, id. at 35–36. The dissent argued
that this ruling was contrary to Borak, because “the primary
beneficiaries” of § 14(a) are also individual shareholders,
and yet Borak held that they could bring a derivative suit on
behalf of the corporation. Id. at 66 (Stevens, J., dissenting).
In response, the Court held that the dissent was “misreading”
Borak. Id. at 32 n.21. As interpreted by Piper, Borak was
“focusing on all stockholders[,] the owners of the
corporation[,] as the beneficiaries of § 14(a),” and provided
a remedy for “[s]tockholders as a class,” id., who were “the
direct and intended beneficiaries of the legislation,” id. at 32.
Thus, Piper suggests that Borak should be interpreted as
fashioning a remedy analogous to a shareholder
representative action or a class action, rather than a
derivative action on behalf of a corporation to enforce a
corporate right.
    In a subsequent decision, the Court likewise refused to
give an implied right of action under § 14(a) to individuals
whose votes were not required by law to authorize a
transaction. See Va. Bankshares, 501 U.S. at 1087. In that
case, minority shareholders purported to bring a § 14(a)
action challenging a merger, even though their votes were
not required by law or by the corporation’s bylaws to
authorize the merger. Id. at 1088, 1099. The Supreme Court
declined to “enlarge the scope” of the private right of action
recognized in Borak for shareholders whose votes were
unnecessary to approve the transaction that was the subject
34                           LEE V. FISHER

of the proxy solicitation, and concluded that the minority
shareholders lacked standing to bring a § 14(a) claim. Id. at
1102–03, 1104 n.11.
    Although Virginia Bankshares was careful to state that it
did not “question the holding” of Borak, id. at 1104 n.11, the
implication of its ruling is clear.          Under Virginia
Bankshares, a person whose vote is not “legally required to
authorize the [corporate] action proposed” lacks standing to
bring a § 14(a) claim. Id. at 1102. Because the shareholders,
not the corporation itself, vote to approve corporate
transactions, this rule implies that the corporation lacks
standing to sue under § 14(a) for a misleading proxy
statement it has issued to its own shareholders.15 See
Manesh & Grundfest (manuscript, at 60–61).               If a
corporation cannot bring such a § 14(a) claim, then a
shareholder cannot “enforce a right that the corporation or
association may properly assert but has failed to enforce,” as
required by Rule 23.1 for all derivative actions brought in
federal court. Fed. R. Civ. P. 23.1(a). Because the express
terms of Rule 23.1 supersede Borak’s “federal common
lawmaking” for derivative actions, Kamen, 500 U.S. at 100
n.6, Virginia Bankshares casts grave doubt on whether a
shareholder can bring a derivative § 14(a) action on behalf
of a corporation.

15
    It also appears unlikely that a corporation has standing to sue for a
proxy nondisclosure violation under Delaware law, because “[a] proxy
is evidence of an agent’s authority to vote shares owned by another,”
Eliason v. Englehart, 733 A.2d 944, 946 (Del. 1999) (per curiam), but
“a corporation may not vote its own shares,” Stream TV Networks, Inc.
v. SeeCubic, Inc., 250 A.3d 1016, 1031 (Del. Ch. 2020); see also 8 Del.
C. § 160(c)(1) (“Shares of a corporation’s capital stock shall neither be
entitled to vote nor be counted for quorum purposes if such shares belong
to [t]he corporation.”).
                              LEE V. FISHER                              35

                                     4
     In sum, after the decision in Borak, the Supreme Court’s
jurisprudence has evolved in a way that calls into question
Borak’s statement about derivative § 14(a) actions. First, the
Court now looks to state law rather than federal common law
to fill in gaps relating to federal securities claims, and under
Delaware law, a § 14(a) action is direct, not derivative.
Second, the Court now views implied private rights of action
with disapproval, construing them narrowly, and casting
doubt on the viability of a corporation’s standing to bring a
§ 14(a) action. These jurisprudential shifts undermine any
claim that there is a strong public policy favoring Borak’s
dictum that shareholders can bring a derivative § 14(a)
action. While Borak’s approval of implied direct § 14(a)
actions to ensure shareholders’ informed voting rights may
survive, there is no concomitant public policy supporting a
right to bring such actions derivatively.16 Accordingly,
Borak does not help Lee make a strong showing that
enforcement of Gap’s forum-selection clause “would
contravene a strong public policy” of the federal forum. M/S
Bremen, 407 U.S. at 15.

16
  In stating that “[t]he majority goes to great lengths to assert that Borak
is no longer good law,” Dissent 70, the dissent appears to have
overlooked our entire analysis. We acknowledge that the Supreme Court
has not “question[ed] the holding” of Borak. See supra 34 (quoting Va.
Bankshares, 501 U.S. at 1104 n.11). Rather, we explain that the Supreme
Court’s subsequent decisions have called into question Borak’s dicta that
a shareholder has a right to bring a derivative § 14(a) action, which
supports our conclusion that there is no strong public policy in favor of
such actions. See supra 34–35. The dissent fails to address this analysis
or otherwise explain why there is some basis for a strong public policy
in favor of derivative § 14(a) actions after Kamen and Virginia
Bankshares.
36                       LEE V. FISHER

                              C
    Lee points to a second federal policy that she claims
creates the requisite “extraordinary circumstances”
sufficient to preclude enforcement of Gap’s forum-selection
clause. Atl. Marine, 571 U.S. at 52. According to Lee, the
forum-selection clause conflicts with the federal forum’s
strong public policy of giving federal courts exclusive
jurisdiction over Exchange Act claims under § 27(a). This
argument also fails.
    First, the Supreme Court has indicated that there was “no
specific purpose on the part of Congress in enacting § 27.”
Matsushita Elec. Indus. Co., Ltd. v. Epstein, 516 U.S. 367,
383 (1996). At most, the Court has “presume[d] . . . that
Congress intended § 27 to serve . . . the general purposes
underlying most grants of exclusive jurisdiction: ‘to achieve
greater uniformity of construction and more effective and
expert application of that law.”’ Id. (quoting Murphy v.
Gallagher, 761 F.2d 878, 885 (2d Cir. 1985)). Because
enforcing Gap’s forum-selection clause would require Lee
to bring her derivative action in the Court of Chancery,
which would lead to its dismissal for lack of jurisdiction,
“[t]here is no danger that state court judges who are not fully
expert in federal securities law will say definitively what the
Exchange Act means and enforce legal liabilities and duties
thereunder,” and “the uniform construction of the Act [will
be] unaffected . . . because the state court [will] not
adjudicate the Exchange Act claims.” Id. And because
enforcing Gap’s forum-selection clause does not threaten the
presumed policies embedded in § 27(a), there is no conflict
with § 27(a) that constitutes an extraordinary circumstance
requiring non-enforcement of Gap’s forum-selection clause.
                              LEE V. FISHER                              37

    Second, Lee argues that, in light of § 27(a), Gap’s forum-
selection clause constitutes a waiver of her right to pursue
“statutory remedies” under § 14(a), which is contrary to
public policy. She relies on a footnote from the Supreme
Court’s decision in Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., which considered the argument
that two clauses in a sales agreement—one providing for
arbitration before a foreign tribunal, and the other providing
that the agreement would be governed by foreign law—
would “wholly . . . displace” American antitrust law. 473
U.S. 614, 637 n.19 (1985). Because the plaintiff, a foreign
corporation, conceded that American law applied to the
antitrust claims, the Court rejected this argument, but stated
in a footnote that “in the event the choice-of-forum and
choice-of-law clauses operated in tandem as a prospective
waiver of a party’s right to pursue statutory remedies for
antitrust violations, [it] would have little hesitation in
condemning the agreement as against public policy.”17 Id.

17
   We clarify that the statement in Sun that “the strong federal policy in
favor of enforcing forum-selection clauses would supersede antiwaiver
provisions in state statutes as well as federal statutes,” 901 F.3d at 1090,
is subject to the caveat in Mitsubishi Motors—that a forum-selection
clause that purports to override an express federal statutory remedy or a
non-waivable statutory right would fail as being “against public policy,”
473 U.S. at 637 n.19. Thus, to the extent that enforcing a forum-selection
clause would conflict with an applicable federal antiwaiver provision, a
court is bound to enforce the statute, notwithstanding the strong policy
in favor of enforcing forum-selection clauses. See Atl. Marine, 571 U.S.
at 63. This is consistent with the well-established principles that federal
courts “have no license to depart from the plain language” of statutes,
United States v. Rutherford, 442 U.S. 544, 555 (1979), and that “policy
concerns cannot trump the best interpretation of the statutory text,” Patel
v. Garland, 142 S. Ct. 1614, 1627 (2022). In any event, because § 29(a)
does not void Gap’s forum-selection clause, see supra Section III.A, our
decision does not raise any concern about elevating “a judge-made
38                          LEE V. FISHER

Reading the Mitsubishi Motors footnote together with
§ 27(a)’s grant of exclusive federal jurisdiction for claims
brought under § 14(a), Lee argues that enforcing Gap’s
forum-selection clause would be an unlawful “prospective
waiver” of her right to pursue a statutory remedy in federal
court.
    Lee’s argument is unavailing.18 First, unlike Mitsubishi
Motors, where a forum-selection clause and choice-of-law
provision had the potential to “wholly . . . displace” federal
antitrust law, and thus prevent a party to a sales agreement
from bringing a statutory antitrust claim, the forum-selection
clause and exclusive jurisdiction provision at issue here have
no such potential effect. To the contrary, as we have
explained, a shareholder may bring a § 14(a) claim against
Gap as a direct action in federal court despite Gap’s forum-
selection clause. Moreover, while Congress gave private
individuals a statutory right to bring a private antitrust
action, see 15 U.S.C. § 15(a), Congress did not provide such
a statutory remedy for a derivative § 14(a) action, contrary
to Lee’s assertion that “[a] derivative claim for [a] violation
of § 14(a) is . . . a substantive provision of the Exchange
Act.” Nor did Borak hold that Congress intended to provide
such a remedy. See Va. Bankshares, 501 U.S. at 1103
(“Borak’s probe of the congressional mind . . . never focused

federal policy” over “the plain language of the Exchange Act.” Dissent
56.
18
  We have already rejected en banc a similar attempt to overstate the
meaning of the Mitsubishi Motors footnote in a manner that would
override M/S Bremen. See Richards, 135 F.3d at 1295 (“[W]e do not
believe dictum in a footnote regarding antitrust law outweighs the
extended discussion and holding in [M/S Bremen and its progeny] on the
validity of clauses specifying the forum and applicable law.”).
                         LEE V. FISHER                       39

squarely on private rights of action, as distinct from the
substantive objects of the legislation . . . .”). Therefore, the
Supreme Court’s statements in Mitsubishi Motors
suggesting the existence of a strong public policy to protect
a party’s right to a statutory antitrust remedy (comments that
were not necessary to the case before it) are inapposite here.
    Because we reject each of Lee’s arguments that a strong
public policy of the federal forum would be violated by
enforcement of Gap’s forum-selection clause, we conclude
that Lee has “not carried [he]r heavy burden of showing the
sort of exceptional circumstances that would justify
disregarding a forum-selection clause.” Sun, 901 F.3d at
1084.
                               D
    We now turn to the question whether Gap’s forum-
selection clause is invalid as a matter of Delaware law under
Section 115 of the DGCL.
                               1
    We begin with some background. The Delaware
General Assembly enacted Section 115 in 2015 to authorize
forum-selection clauses. As explained, in the early 2010s,
corporations began adopting forum-selection clauses in their
bylaws as a response to a steep rise in multiforum litigation.
See supra Section II. In 2013, the Court of Chancery
upheld, under Delaware law, the statutory and contractual
validity of forum-selection clauses “providing that litigation
relating to [corporations’] internal affairs should be
conducted in Delaware.” Boilermakers, 73 A.3d at 937–39.
Boilermakers held that the forum-selection clauses at issue
were authorized by “the broad subjects that [Section] 109(b)
[of the DGCL] permits bylaws to address,” id. at 950, which
40                        LEE V. FISHER

are those “relating to the business of the corporation, the
conduct of its affairs, and its rights or powers or the rights or
powers of its stockholders, directors, officers or employees,”
8 Del. C. § 109(b). Boilermakers reasoned that the bylaws
of Delaware corporations “typically . . . direct how the
corporation, the board, and its stockholders may take certain
actions,” 73 A.3d at 951, and that the forum-selection bylaws
at issue “fit this description” because they were “process-
oriented” and “regulate[d] where stockholders may file suit,”
id. at 951–52. The Court of Chancery also rejected the
plaintiffs’ argument that the bylaws were contractually
invalid because they were adopted unilaterally by the
directors without a shareholder vote, concluding “that
forum-selection bylaws are, as a facial matter of law,
contractually binding.” Id. at 957–58.
    While Boilermakers did not address “situations when the
forum-selection bylaws . . . could somehow preclude a
plaintiff from bringing a claim that must be brought
exclusively in a federal court,” id. at 961, it discussed a
hypothetical question, raised by the plaintiffs, as to whether
a forum-selection clause would be invalid if a Rule 14a-9
claim were brought against a corporation in federal court and
the defendants moved to dismiss the complaint because of a
forum-selection clause, id. at 962. But the Court of
Chancery expressly “decline[d] to wade deeper into
imagined situations involving multiple ‘ifs,’” id. at 962, and
left questions regarding the enforceability of forum-
selection clauses “in some future situation” to be resolved
another day, id. at 963.
    Two years later, the Delaware legislature enacted
Section 115 as part of its 2015 amendments to the DGCL,
which “were intended, in part, to codify Boilermakers.”
Salzberg v. Sciabacucchi, 227 A.3d 102, 117 (Del. 2020);
                                LEE V. FISHER                           41

see also Solak v. Sarowitz, 153 A.3d 729, 732 (Del. Ch.
2016).     Section 115 states in relevant part that a
corporation’s “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.” 8 Del. C. § 115.19 It
defines “internal corporate claims” as “including claims in
the right of the corporation,” which means claims “that are
based upon a violation of a duty by a current or former
director or officer or stockholder in such capacity,” as well
as claims “as to which [the DGCL] confers jurisdiction.” Id.
Section 115 prohibits bylaws that forbid a plaintiff from
bringing such internal corporate claims in Delaware courts.
Id.
    An official synopsis accompanies Section 115 and the
other 2015 amendments to the DGCL. See S.B. 75, 148th
Gen. Assembly, Regular Session (Del. 2015) (synopsis).
Although, under Delaware law, “[a] synopsis is a proper
source for ascertaining legislative intent,” the Delaware

19
     Section 115 of the DGCL provides in full:

           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 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.
42                       LEE V. FISHER

Supreme Court considers the synopsis only if it “finds that
the statutory language is ambiguous and requires
interpretation.” Bd. of Adjustment of Sussex Cnty. v.
Verleysen, 36 A.3d 326, 332 (Del. 2012). The portion of the
synopsis pertaining to Section 115 summarizes that section
and provides certain clarifications. In addition to stating that
Section 115 is intended to codify the holding of
Boilermakers, the synopsis interprets the term “internal
corporate claims” as “claims arising under the DGCL,
including claims of breach of fiduciary duty by current or
former directors or officers or controlling stockholders of the
corporation.” S.B. 75 (synopsis). The synopsis also
provides a list of what Section 115 is not intended to do;
among other things, the section is “not intended to authorize
a provision that purports to foreclose suit in a federal court
based on federal jurisdiction.” Id.
    In 2020, the Delaware Supreme Court addressed the
scope of Section 115 in Salzberg. Salzberg analyzed forum-
selection clauses that required certain claims to be brought
in federal court (referred to as federal forum provisions, or
FFPs), and held that such clauses were not prohibited by
Section 115. 227 A.3d at 109, 120. Salzberg based this
conclusion in part on its interpretation of the phrase “internal
corporate claims” in Section 115 as “likely . . . intended to
address claims requiring the application of Delaware
corporate law as opposed to federal law.” Id. at 120 n.79.
The Delaware Supreme Court did “not think the General
Assembly intended to encompass federal claims within the
definition of internal corporate claims[,]” and thus
concluded that “Section 115 [wa]s not implicated” by the
FFPs at issue. Id. Salzberg’s interpretation of the term
“internal corporate claims” was integral to the Delaware
Supreme Court’s reasoning and outcome, because, as the
                        LEE V. FISHER                      43

court acknowledged, if the term “internal corporate claims”
encompassed federal claims, “then arguably, [the FFPs]
would run afoul of Section 115’s requirement that ‘no
provision of the certificate of incorporation or the bylaws
may prohibit bringing such [internal corporate] claims in the
courts of this State.’” Id. at 133 n.146 (quoting 8 Del. C.
§ 115). In other words, because FFPs prohibit plaintiffs
from bringing certain federal claims in Delaware courts, the
FFPs would conflict with Section 115, which requires
corporate bylaws to allow all internal corporate claims to be
brought in Delaware courts. See 8 Del. C. § 115. But since
federal claims are not “internal corporate claims” under
Section 115, Salzberg dictates that courts “must look
elsewhere . . . to determine whether [a forum-selection
bylaw] is permissible,” because “Section 115, read fairly,
does not address the propriety of forum-selection provisions
applicable to other types of claims.” 227 A.3d at 119.
      Salzberg also made clear that Section 115 is a
permissive, rather than restrictive, statute. The Delaware
Supreme Court explained that “Section 115 simply clarifies
that for certain claims, Delaware courts may be the only
forum, but they cannot be excluded as a forum.” Id. at 118.
Thus, Section 115, as interpreted by Salzberg, permits the
use of specified forum-selection clauses, but does not
implicitly forbid other such clauses unless they prevent a
plaintiff from bringing state-law claims in Delaware courts.
Indeed, Salzberg rejected the argument “that a forum-
selection provision not expressly permitted by Section 115 .
. . is implicitly prohibited.” Id. at 119–20. Rather, Salzberg
reiterated “that forum-selection clauses are presumptively
valid and enforceable under Delaware law.” Id. at 132.
Salzberg based its analysis in part on the broad scope of
Section 109(b) of the DGCL, see 227 A.3d at 122–23, which
44                       LEE V. FISHER

authorizes a corporation to enact any bylaw “not inconsistent
with law or with the certificate of incorporation,” as long as
it relates to the “rights or powers” of the corporation’s main
stakeholders, 8 Del. C. § 109(b). Thus, according to
Salzberg, Section 115’s “permissive provision [did not]
define[] the whole universe of permitted forum-selection
provisions.” 227 A.3d at 120. Salzberg likewise made clear
that Boilermakers, which was codified by Section 115, “did
not establish the outer limit of what is permissible under . . .
Section 109(b).” Id. at 123.
                               2
    Before addressing the effect of Section 115 on Gap’s
forum-selection clause, we must first determine whether we
should exercise our discretion to do so. Lee failed to identify
Section 115 in her opening brief before the panel, which was
filed before the Seventh Circuit issued its opinion in
Seafarers Pension Plan ex rel. Boeing Co. v. Bradway,
striking down a materially similar forum-selection clause to
Gap’s as invalid under Section 115. 23 F.4th 714 (7th Cir.
2022). Following Seafarers, Lee raised arguments under
Section 115 for the first time in her reply brief. After we
voted to rehear this case en banc, Gap moved to file
supplemental briefing on certain issues, and Lee cross-
moved for supplemental briefing on the application of
Section 115. We granted in part the parties’ cross-motions
and ordered supplemental briefing on, among other topics,
“the application of 8 Del. Code § 115.” Accordingly, the
Section 115 issue is fully briefed by both parties.
    We have long held that we may exercise our discretion
to address significant questions presented to the en banc
panel that were not considered by the three-judge panel. See
United States v. Hernandez-Estrada, 749 F.3d 1154, 1159–
                          LEE V. FISHER                       45

60 (9th Cir. 2014) (en banc). Thus, we have discretion to
consider the Section 115 issue, which is of sufficient
importance that we ordered the parties to address it in
supplemental briefing. See Socop-Gonzalez v. INS, 272 F.3d
1176, 1186 n.8 (9th Cir. 2001) (en banc). The party-
presentation principle is not implicated here because the
parties themselves have “frame[d] the issue for decision.”
Cf. United States v. Sineneng-Smith, 140 S. Ct. 1575, 1579
(2020). When we rehear a case en banc, we do “not review
the original panel decision, nor [do we] overrule the original
panel decision,” but rather we “act[] as if we were hearing
the case on appeal for the first time,” and can thus consider
new issues that have been “unquestionably raised . . . before
the en banc court.” Socop-Gonzalez, 272 F.3d at 1186 n.8.
Therefore, although the three-judge panel deemed the
Section 115 issue to be waived, see Lee, 34 F.4th at 782, we
are not obliged to follow suit.
    We conclude that the effect of Section 115 is important
to our decision here. Federal courts generally defer to the
law of the state of incorporation for issues involving “a
corporation’s internal affairs—matters peculiar to the
relationships among or between the corporation and its
current officers, directors, and shareholders.” Edgar v.
MITE Corp., 457 U.S. 624, 645 (1982). Accordingly,
“[state] law controls the legal issue on the validity of the
challenged by-law.” Groves v. Prickett, 420 F.2d 1119,
1122 (9th Cir. 1970). If Gap’s bylaw is invalid under
Delaware law, as Lee now claims, then the district court
erred in enforcing it. If we fail to address this issue, then our
analysis of whether Gap’s forum-selection clause can validly
prevent Lee from bringing a derivative § 14(a) action in
federal court would be incomplete. We therefore elect “to
46                       LEE V. FISHER

exercise our discretion to decide the issue en banc.”
Hernandez-Estrada, 749 F.3d at 1160.
                               3
    We now turn to the question whether Gap’s forum-
selection clause is invalid under Section 115 of the DGCL.
    On its face, Section 115 is inapplicable here, because it
does not address the validity of a forum-selection clause’s
effect on federal claims. Section 115 provides that a
corporation’s bylaws “may require . . . that any or all internal
corporate claims shall be brought solely and exclusively in
any or all of the courts in this State.” 8 Del. C. § 115.
According to Salzberg, the phrase “internal corporate
claims” in Section 115 refers to “claims requiring the
application of Delaware corporate law, as opposed to federal
law.” 227 A.3d at 120 n.79. The official synopsis to the
2015 amendments to the DGCL, which included Section 115
and on which Lee relies, is consistent with this
interpretation, stating that the term “internal corporate
claims” means “claims arising under the DGCL.” S.B. 75
(synopsis). By its terms, this language does not prevent a
forum-selection clause from requiring that a federal claim,
which is not an internal corporate claim, be brought in
Delaware state court.
    Lee mentions Salzberg only in passing and does not
address Salzberg’s interpretation of the phrase “internal
corporate claims” as referring to claims brought under
Delaware law, rather than federal law. Instead, Lee argues
that the text of Section 115, when read together with the
synopsis and the Delaware Supreme Court’s statements in
Boilermakers, raises the strong inference that Section 115
precludes a forum-selection clause from requiring a federal
claim such as § 14(a) to be brought in state court, when the
                         LEE V. FISHER                      47

state court would be obliged to dismiss it for lack of
jurisdiction. Specifically, Lee asserts that Section 115 states
that a forum-selection clause must be “consistent with
applicable jurisdictional requirements,” and the synopsis
warns that Section 115 is “not intended to authorize a
provision that purports to foreclose suit in a federal court
based on federal jurisdiction.” Because Gap’s forum-
selection clause eliminates federal jurisdiction over her
derivative § 14(a) claim, Lee contends, it is not consistent
with applicable jurisdictional requirements and does exactly
what § 115 was “not intended to authorize.” Lee further
notes that Boilermakers recognized that a forum-selection
clause that precluded federal jurisdiction over a Rule 14a-9
action could raise jurisdictional issues, and she argues that
the language in Boilermakers about how a corporation
invoking a forum-selection clause against such a claim might
have “trouble,” 73 A.3d at 962, further indicates that such a
clause would be disfavored.
    We reject Lee’s arguments regarding Section 115. First,
Salzberg makes clear that “internal corporate claims,” as
defined in Section 115, refers only to claims brought under
Delaware, rather than federal, law. 227 A.3d at 120 n.79.
Given Salzberg’s authoritative interpretation of Section 115,
we must read that section as addressing only state-law claims
and authorizing them to be brought in “any or all” state
courts, “consistent with applicable jurisdictional
requirements.” 8 Del. C. § 115. Under this approach,
Section 115 is silent on whether or not bylaws may require
federal claims to be brought in state courts or whether forum-
selection clauses governing federal claims must be
consistent with applicable jurisdictional requirements.
Moreover, because Salzberg makes clear that Section 115 is
a permissive, rather than restrictive, statute, we may not
48                       LEE V. FISHER

interpret its silence on the issue of federal claims as
prohibiting the application of forum-selection clauses to
such claims. See 227 A.3d at 120 (rejecting the notion that
“Section 115’s permissive provision defines the whole
universe of permitted forum-selection provisions”). Again,
Lee misinterprets Section 115 as a restrictive statute that sets
the outer limit of allowable forum-selection clauses, rather
than a merely permissive one, as explained by Salzberg.
    Lee’s reliance on the official synopsis accompanying the
2015 amendments to the DGCL is also misplaced. Applying
the Delaware Supreme Court’s interpretative framework
characterizing Section 115 as permissive, the synopsis’s
warning that “Section 115 is . . . not intended to authorize a
provision that purports to foreclose suit in a federal court
based on federal jurisdiction,” S.B. 75 (synopsis), means
only that Section 115 does not create a legislative safe-
harbor for forum-selection clauses that requires claims to be
brought in forums that lack jurisdiction over them. By their
terms, these statements in the synopsis neither authorize nor
prohibit a forum-selection clause that would preclude
bringing an action in federal court. See Salzberg, 227 A.3d
at 120–21. We also reject Lee’s argument that the forum-
selection clause was not authorized by Section 109(b)
because Section 115 is a more specific statute, and thus
supersedes Section 109(b), which is more general. This
argument is contrary to Salzberg, which held that “[f]orum
provisions were valid [under Section 109(b)] prior to Section
115’s enactment,” id. at 120, and Section 115 “did not
establish the outer limit of what is permissible
under . . . Section 109(b),” id. at 123. Therefore, Salzberg
concluded, Section 109(b) was broad enough to authorize
the forum-selection clause at issue, notwithstanding Section
                          LEE V. FISHER                       49

115. Salzberg’s reasoning applies with equal force to
authorize Gap’s forum-selection clause.
     Boilermakers is not to the contrary. There, the Court of
Chancery held that forum-selection clauses “providing that
litigation relating to [corporations’] internal affairs should be
conducted in Delaware,” 73 A.3d at 937, were statutorily and
contractually valid under Delaware law, id. at 963, and the
court did not place conditions on their use. Years later,
Salzberg confirmed that Boilermakers did not place
limitations on the scope of forum-selection clauses. See 227
A.3d at 119, 122–23. Following (and codifying)
Boilermakers, Section 115 thus approves forum-selection
clauses “consistent with applicable jurisdictional
requirements,” without imposing any specific carve-outs or
restrictions for the hypothetical scenarios considered in
Boilermakers, other than clarifying that Delaware state
courts cannot be excluded as a forum for state-law “internal
corporate claims.” 8 Del. C. § 115.
    Accordingly, because the Delaware Supreme Court has
indicated that federal claims like Lee’s derivative § 14(a)
action are not “internal corporate claims” as defined in
Section 115, and because no language in Boilermakers,
Section 115, or the official synopsis operates to limit the
scope of what constitutes a permissible forum-selection
bylaw under Section 109(b), we conclude that Gap’s forum-
selection clause is valid under Delaware law.
                               E
    In reaching this conclusion, we part ways with the
Seventh Circuit’s decision in Seafarers. 23 F.4th 714. In
that case, the plaintiff filed a “derivative suit on behalf of
Boeing under [§] 14(a) . . . alleg[ing] that Boeing officers
and board members made materially false and misleading
50                             LEE V. FISHER

public statements about the development and operation of
the 737 MAX in Boeing’s 2017, 2018, and 2019 proxy
materials.” Id. at 717. The district court, in reliance on
Boeing’s forum-selection clause, dismissed the action on
forum non conveniens grounds. Id. at 718.20
    The Seventh Circuit reversed, holding that “[t]he most
straightforward resolution of this appeal is under Delaware
corporation law, which we read as barring application of the
Boeing forum bylaw to this case invoking non-waivable
rights under the federal Exchange Act.” Id. at 719. In
holding that Boeing’s forum-selection clause violated
Section 115, the Seventh Circuit reasoned that a derivative
§ 14(a) action qualified as an “internal corporate claim,” and
Section 115 required forum-selection clauses applying to
internal corporate claims to be “consistent with applicable
jurisdictional requirements.” Id. at 720. According to the
Seventh Circuit, Boeing’s forum-selection clause was not
consistent with Section 115’s requirement because the
clause violated the applicable jurisdictional requirement
imposed by § 27(a), which gives federal courts exclusive
jurisdiction over a § 14(a) claim. Id. Relying on the
synopsis, Seafarers stated that “Section 115 does not

20
     Boeing’s forum-selection clause provided in relevant part:

           With respect to any action arising out of any act or
           omission occurring after the adoption of this By-Law,
           unless the Corporation consents in writing to the
           selection of an alternative forum, the Court of
           Chancery of the State of Delaware shall be the sole and
           exclusive forum for . . . any derivative action or
           proceeding brought on behalf of the Corporation . . . .

Seafarers, 23 F.4th at 718 (alterations in original).
                        LEE V. FISHER                      51

authorize use of a forum-selection bylaw to avoid what
should be exclusive federal jurisdiction over a case,
particularly under the Exchange Act.” Id. at 721. Rather,
the Seventh Circuit explained, “[b]y eliminating federal
jurisdiction over the [plaintiff]’s exclusively federal
derivative claims, Boeing’s forum bylaw forecloses suit in a
federal court based on federal jurisdiction,” and “[t]hat’s
exactly what Section 115 was ‘not intended to authorize.’”
Id. at 720 (quoting S.B. 75 (synopsis)). The Seventh Circuit
rejected the argument that the forum-selection clause was
authorized by Section 109(b), because it deemed that section
to be superseded by the more specific provisions in Section
115, id. at 721–22, and held that Salzberg did not apply to
claims brought under the Exchange Act, id. at 722.
According to the Seventh Circuit, the statements in
Boilermakers addressing “hypothetical situations where the
challenged bylaws would operate” to preclude plaintiffs
from bringing derivative § 14(a) actions made clear that
Boilermakers did not “authorize enforcement of a forum-
selection provision like the Boeing forum bylaw in a case
like this one,” id. at 723, and “that Delaware is not inclined
to enable corporations to close the courthouse doors entirely
on derivative actions asserting federal claims subject to
exclusive federal jurisdiction,” id. at 724.
    As to federal law, the Seventh Circuit concluded that the
ability to bring a derivative § 14(a) action was a non-
waivable statutory right under the Exchange Act. Id. at 719,
725; see also id. at 728 (warning “against using choice-of-
forum and choice-of-law clauses to attempt prospective
waivers of federal statutory remedies”). The Seventh Circuit
stated that enforcing Boeing’s forum-selection clause would
be “difficult to reconcile with [§] 29(a)” because the clause
required the plaintiff to bring a derivative § 14(a) action in
52                       LEE V. FISHER

the Delaware Court of Chancery, which lacked jurisdiction
to hear it—and thus effectively “checkmate for defendants.”
Id. at 720. The Seventh Circuit also gave Borak an
expansive reading, reasoning that enforcing Boeing’s forum-
selection clause would run contrary to “Borak’s recognition
of derivative claims under [§] 14(a).” Id. at 728.
    For the reasons we have explained above, we disagree
with Seafarers’s interpretation of both state and federal law.
First, the Seventh Circuit’s analysis of Delaware law is
flawed because the court failed to consider and apply
Salzberg’s reasoning and conclusions. The Seventh Circuit
ignored Salzberg’s statement that Section 115’s reference to
“internal corporate claims” does not include federal claims,
and thus that Section 115 is “not implicated” by a forum-
selection clause governing federal claims. 227 A.3d at 120
n.79. By failing to recognize Salzberg’s interpretation of
“internal corporate claims,” the Seventh Circuit mistakenly
asserted that Salzberg would not “allow application of the
forum bylaw to a case” requiring derivative actions to be
brought in Delaware courts because “it would effectively bar
[a] plaintiff from bringing its derivative claims under the
[Exchange] Act in any forum.” 23 F.4th at 722. To the
contrary, as we have explained, Salzberg made clear that
Section 115 has no application to actions brought under
federal law. 227 A.3d at 120 n.79.
    For the same reason, the Seventh Circuit erred in stating
that “[n]othing in Salzberg suggests it would extend Section
109 . . . to allow application of the forum bylaw to a case like
this one.” Seafarers, 23 F.4th at 722. In fact, Salzberg stated
that its prior cases had not limited the scope of Section
109(b). 227 A.3d at 122–23. Further, the Seventh Circuit
failed to recognize Salzberg’s interpretation of Section 115
and Section 109(b) as being permissive statutes, rather than
                        LEE V. FISHER                     53

restrictive statutes defining “the outer limit of what is
permissible” or otherwise precluding federal claims. Id. at
124.
    Salzberg also confirmed that Boilermakers held that a
forum-selection bylaw is valid so long as it “regulate[s]
where stockholders may file suit,” and “plainly relate[s] to
the ‘business of the corporation[],’ the ‘conduct of [its]
affairs,’ and regulate[s] the ‘rights and powers of [its]
stockholders.’” Id. at 115 n.51 (quoting Boilermakers, 73
A.3d at 939, 950–52). Contrary to Seafarers, 23 F.4th at
722, Salzberg’s statements regarding the applicability of
Section 109(b), 227 A.3d at 122–23, were not limited to
Securities Act claims, but applied to any forum-selection
clause, regardless of the type of federal claims it covered.
The Seventh Circuit also erred in relying on statements in
Boilermakers about a hypothetical situation involving a
§ 14(a) action as “signal[ing] clearly enough that Delaware
law would not look kindly” on enforcement of the forum-
selection clause at issue. Seafarers, 23 F.4th at 724. To the
contrary, Boilermakers made clear that it would not “render
[an] advisory opinion[] about hypothetical situations that
may not occur,” and that there was no “principled basis to
complete the law school hypotheticals posed by the
plaintiffs.” 73 A.3d at 959.
    Because the Seventh Circuit’s reliance on Section 115
and Boilermakers to invalidate the forum-selection clause at
issue runs contrary to the Delaware Supreme Court’s
reasoning in Salzberg, we reject it. See Wainwright v.
Goode, 464 U.S. 78, 84 (1983) (per curiam) (“[T]he views
of the state’s highest court with respect to state law are
binding on the federal courts.”).
54                        LEE V. FISHER

    The Seventh Circuit’s application of federal law was also
mistaken. In stating that enforcing the bylaw at issue would
serve as “checkmate for defendants” by preventing the
plaintiff from bringing a derivative § 14(a) action in any
forum, and thus effect an invalid waiver under § 29(a),
Seafarers failed to recognize the availability of a direct
§ 14(a) action. 23 F.4th at 720. The Seafarers majority did
not mention the possibility of a direct § 14(a) action, even
though Judge Easterbrook’s well-reasoned dissent pointed
out this flaw, explaining that “[n]othing in Boeing’s bylaw
strips plaintiff, as a recipient of proxy materials, of the ability
to file a direct § 14(a) action in federal court[,]” and
therefore “it is hard to see how [plaintiff] has been deprived
of a right to enforce § 14(a).” Id. at 729 (Easterbrook, J.,
dissenting).
    The Seventh Circuit also misread Borak by implying that
it empowers plaintiffs to bring “derivative actions asserting
rights of a corporation harmed by a violation” of § 14(a). Id.
at 719; see also id. at 728. In reaching this conclusion, the
Seventh Circuit overlooked both the absence of Supreme
Court support for such a policy in subsequent caselaw, as
well as the post-Borak developments in the Supreme Court’s
jurisprudence described above. The Seventh Circuit did not
consider the effect of Delaware law on the classification of
a claim as direct or derivative, as required by Burks and
Kamen, it made no mention of the oft-repeated Supreme
Court instruction to construe implied private rights of action
narrowly, and it failed to reckon with the impact of Virginia
Bankshares on a corporation’s ability to assert a derivative
§ 14(a) action.       Accordingly, the Seventh Circuit’s
implication that Borak created a strong public policy of the
federal forum to allow derivative § 14(a) actions lacks any
persuasive support.
                         LEE V. FISHER                      55

    Finally, Seafarers erred by placing decisive weight on
Mitsubishi Motors’s statement that a party cannot
prospectively waive a federal statutory remedy as weighing
against allowing forum-selection clauses to “foreclose
entirely [a] plaintiff’s derivative [§] 14(a) claims.” 23 F.4th
at 725. As we have explained, Congress did not give
shareholders any statutory remedy in § 14(a), and in any
event, a plaintiff may vindicate shareholder rights under
§ 14(a) by bringing the claim as a direct action in federal
court.
    Because Seafarers failed to apply Salzberg correctly, and
did not consider the implications of the availability of a
direct § 14(a) action, Seafarers’s analysis is flawed. We
therefore decline to follow Seafarers.
                              IV
    In conclusion, we hold that Gap’s forum-selection clause
is not void as an invalid waiver under § 29(a) nor
unenforceable under M/S Bremen due to violation of the
federal forum’s strong public policy. We also hold that
Gap’s bylaw is not contrary to Delaware law. “We
acknowledge that our decision creates a circuit split [with the
Seventh Circuit], and we do not do this lightly.” In re
Penrod, 611 F.3d 1158, 1161 (9th Cir. 2010). Nonetheless,
for the foregoing reasons, we affirm the district court’s
dismissal of Lee’s case on forum non conveniens grounds.
   AFFIRMED.
56                       LEE V. FISHER

S.R. THOMAS, Circuit Judge, with whom MURGUIA,
Chief Judge, and NGUYEN, FRIEDLAND, and
MENDOZA, Circuit Judges, join, dissenting:

    The Gap Inc.’s (“Gap”) forum-selection bylaw requires
that any derivative actions brought pursuant to the Securities
Exchange Act of 1934 (the “Exchange Act”) be adjudicated
in the Delaware Court of Chancery. But state courts lack
jurisdiction to hear Exchange Act claims, so the bylaw
provision is a litigation bridge to nowhere, depriving
shareholders of any forum in which to pursue derivative
claims. The majority concludes that Gap’s bylaw is both
valid and enforceable. However, a judge-made federal
policy in favor of enforcing forum-selection clauses cannot
supersede the clear antiwaiver provision enacted by
Congress in the Exchange Act, which voids such a provision.
The majority’s conclusion conflicts with the plain language
of the Exchange Act. Therefore, for this and other reasons,
I respectfully dissent.
                               I
    The Exchange Act serves “to insure honest securities
markets and thereby promote investor confidence.”
Chadbourne & Parke LLP v. Troice, 571 U.S. 377, 390
(2014) (citation omitted). Section 27(a) of the Exchange Act
provides federal courts with exclusive jurisdiction over
claims resulting from “violations of this chapter or the rules
and regulations thereunder, and of all suits in equity and
actions at law brought to enforce any liability or duty created
by this chapter or the rules and regulations thereunder.” 15
U.S.C. § 78aa(a). The Supreme Court has stated that “the
statute plainly mandates that suits alleging violations of the
Exchange Act may be maintained only in federal court” and
“prohibits state courts from adjudicating claims arising
                         LEE V. FISHER                       57

under the Exchange Act.” Matsushita Elec. Indus. Co. v.
Epstein, 516 U.S. 367, 381 (1996).
    Additionally, Section 29(a) of the Act contains a forceful
antiwaiver provision that voids any private agreement
endeavoring to waive compliance with the statute: “Any
condition, stipulation, or provision binding any person to
waive compliance with any provision of this chapter 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).
    “[T]he first question” is “whether § [29(a)] itself controls
[Gap’s] request to give effect to the parties’ contractual
choice of venue.” Stewart Org., Inc. v. Ricoh Corp., 487
U.S. 22, 29 (1988); see DePuy Synthes Sales, Inc. v.
Howmedica Osteonics Corp., 28 F.4th 956, 961–65 (9th
Cir.), cert. denied, 143 S. Ct. 536 (2022). Thus, because any
analysis of a forum-selection clause’s enforceability
“presupposes a contractually valid forum-selection clause,”
Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex.,
571 U.S. 49, 62 n.5 (2013), we must first determine whether
Gap’s bylaw is valid.
    Contrary to the majority’s conclusion, Gap’s bylaw is
invalid under federal law. The antiwaiver provision of the
Exchange Act voids Gap’s forum-selection bylaw because
the bylaw deprives Plaintiff-Appellant Noelle Lee of the
ability to bring her derivative claim under § 14(a) of the
Exchange Act in any forum—thereby resulting in complete
waiver of the claim.
                               A
   The Supreme Court has held that the antiwaiver
provision “prohibits waiver of the substantive obligations
imposed by the Exchange Act.” Shearson/Am. Exp., Inc. v.
58                       LEE V. FISHER

McMahon, 482 U.S. 220, 228 (1987). An agreement waives
substantive rights if it “weaken[s] [the parties’] ability to
recover under the [Exchange] Act;” indeed, such an effect
“is grounds for voiding the agreement under § 29(a).” Id. at
230–31 (citation omitted).
    By rerouting Exchange Act claims to the Delaware Court
of Chancery, a forum that lacks any power to adjudicate
them, Gap’s forum-selection clause does not merely
“weaken” the substantive right to recover under the Act, but
eliminates it altogether. Accordingly, enforcement of Gap’s
forum-selection clause deprives investors of “an adequate
means of enforcing the provisions of the Exchange Act.” Id.
at 229.
    Gap concedes that enforcing the forum-selection clause
results in dismissal of all derivative claims. Thus, the forum-
selection clause violates the antiwaiver provision by
“defeat[ing] the claim[] entirely.” Seafarers Pension Plan
ex rel. Boeing Co. v. Bradway, 23 F.4th 714, 720 (7th Cir.
2022); see Mitsubishi Motors Corp. v. Soler Chrysler-
Plymouth, 473 U.S. 614, 637 n.19 (1985) (noting “that in the
event the choice-of-forum and choice-of-law clauses
operated in tandem as a prospective waiver of a party’s right
to pursue statutory remedies for antitrust violations, we
would have little hesitation in condemning the agreement as
against public policy”).
    The fact that the forum-selection clause eviscerates
derivative actions should end the analysis under the
Exchange Act’s antiwaiver provision. However, Gap
contends that its forum-selection clause does not violate any
substantive obligations of the Exchange Act for two reasons:
(1) Because Lee could theoretically bring a direct action, the
Exchange Act’s antiwaiver provision does not prohibit the
                         LEE V. FISHER                       59

waiver of a derivative suit, and (2) judicially created
preferences for enforcing forum-selection clauses trump the
plain language of the Exchange Act’s antiwaiver provision.
   But Gap—and the majority—are wrong on both counts.
                               1
    Gap’s argument that its forum-selection bylaw does not
waive compliance with the Exchange Act because Lee could
bring a direct, rather than derivative, claim is contrary to the
plain language of the Exchange Act and binding precedent.
    First, the Exchange Act requirements are clear. The
antiwaiver provision voids “[a]ny condition, stipulation, or
provision” that serves “to waive compliance with any
provision of this chapter.” 15 U.S.C. § 78cc(a) (emphases
added). The statute does not include the qualification
“unless there are alternate remedies available.” When the
statutory language is plain, courts “have no right to insert
words and phrases, so as to incorporate in the statute a new
and distinct provision.” United States v. Temple, 105 U.S.
97, 99 (1881); see also United States v. Watkins, 278 F.3d
961, 965 (9th Cir. 2002) (“[A] court should not read words
into a statute that are not there.”); Stanton Rd. Assocs. v.
Lohrey Enters., 984 F.2d 1015, 1020 (9th Cir. 1993) (noting
that the Supreme Court has instructed this Court that we lack
the power to “read into the statute words not explicitly
inserted by Congress”). There is no provision in the
Exchange Act that limits the scope of the antiwaiver
language.
    Second, direct and derivative stockholder actions are
distinct, with different purposes and different remedies. In a
direct action, the plaintiff shareholder—on behalf of herself
and typically a class of shareholders—seeks damages,
60                        LEE V. FISHER

usually as compensation for loss in stock value, based on
securities law violations, fraud, or other causes of action.
See, e.g., Halliburton Co. v. Erica P. John Fund, Inc., 573
U.S. 258, 263–65 (2014). By contrast, a derivative action
allows an individual shareholder “to step into the
corporation’s shoes and to seek in its right the restitution he
could not demand in his own,” Cohen v. Beneficial Indus.
Loan Corp., 337 U.S. 541, 548 (1949), by asserting a cause
of action on behalf of the corporation, against its officers,
directors, or third parties.
    Direct and derivative suits are not interchangeable: The
derivative suit was “[d]evised as a suit in equity . . . to place
in the hands of the individual shareholder a means to protect
the interests of the corporation from the misfeasance and
malfeasance of faithless directors and managers.” Kamen v.
Kemper Fin. Servs., 500 U.S. 90, 95 (1991) (internal
quotation marks and citation omitted). Under Delaware law,
the determination of whether a stockholder’s claim is direct
or derivative “must turn solely on the following questions:
(1) who suffered the alleged harm (the corporation or the
suing stockholders, individually); and (2) who would receive
the benefit of any recovery or other remedy (the corporation
or the stockholders, individually)?” Tooley v. Donaldson,
Lufkin, & Jenrette, Inc., 845 A.2d 1031, 1033 (Del. 2004).
    Perhaps, in a sense, every injury to a corporation also
injures the shareholders, at least to the extent that it
undermines the corporation’s business and reduces its value.
But Delaware law identifies the key question for direct
actions as “whether the stockholder has demonstrated that he
or she has suffered an injury that is not dependent on an
injury to the corporation.” Brookfield Asset Mgmt., Inc. v.
Rosson, 261 A.3d 1251, 1263 (Del. 2021). And unlike in
direct suits, the remedies available through derivative
                              LEE V. FISHER                             61

actions, such as corporate-governance reforms and any
payment, “flow[] only to the corporation.” Tooley, 845 A.2d
at 1036.
    Derivative suits provide an important and distinct avenue
for holding officers and directors accountable for violations
of federal law, and future challengers may be able to assert
only derivative claims because of the type of harm at issue.
In such cases, Gap’s forum-selection clause would “be
tantamount to a denial of private relief.” J.I. Case Co. v.
Borak, 377 U.S 426, 432 (1964). Here, Lee seeks to “protect
the interests of the corporation from the misfeasance and
malfeasance of faithless directors and managers.” Kamen,
500 U.S. at 95 (internal quotation marks and citation
omitted). That goal cannot be achieved through a direct
action. Lee cannot “effectively . . . vindicate [her] statutory
cause of action” in the bylaw’s forum (i.e., the Delaware
Court of Chancery) because that forum lacks jurisdiction
over her § 14(a) claim. McMahon, 482 U.S. at 240 (citation
omitted).1
    Unlike the plaintiffs in McMahon, who retained the right
to assert their Exchange Act claims in arbitration, Lee faces
a “consequential restriction on [her] substantive right[]” to
bring a derivative § 14(a) claim, id. at 232, which Borak
recognized was vital to “effective . . . enforcement” of the

1
  The majority suggests that forum-selection clauses such as Gap’s
“functionally require[] the use of a direct action to enforce” § 14(a), Op.
20, implying that all § 14(a) claims must be brought as direct actions,
and any future derivative § 14(a) actions can be foreclosed altogether. If
true, this assertion would violate the Exchange Act’s antiwaiver
provision because the right to enforce § 14(a) violations “exists as to
both derivative and direct causes.” J.I. Case Co. v. Borak, 377 U.S 426,
431 (1964).
62                           LEE V. FISHER

Exchange Act’s proxy requirements, 377 U.S. at 432. Thus,
because the bylaw’s designated forum is “inadequate to
enforce the statutory rights created by [the Act],” McMahon,
420 U.S. at 229, the bylaw’s complete waiver of derivative
actions under the Exchange Act violates Section 29(a).2
    Third, Gap is incorrect that the forum-selection clause’s
waiver of Lee’s right to sue under the Exchange Act falls
outside the antiwaiver provision because it does not waive
Gap’s duty to comply with Rule 14a-9 or Delaware law.
Borak implied a private right of action precisely because
those substantive duties are inextricably linked to the right
to judicial enforcement. See 377 U.S. at 431–32. In Borak,
the Supreme Court affirmed both the existence and
significance of a private right of action to bring a derivative
claim for a violation of § 14(a). Id. at 432. Borak’s implied
right of derivative action remains good law.
                                   2
    The argument that a judge-made policy in favor of
forum-selection clauses supersedes the Exchange Act’s
antiwaiver provision fares no better. We have been
cautioned against judicial “decisions giving improperly
broad pre-emptive effect to judicially manufactured policies,
rather than to the statutory text enacted by Congress pursuant
to the Constitution.” Wyeth v. Levine, 555 U.S. 555, 604

2
 If the majority is correct that, under Delaware law, Lee’s action would
be re-categorized as a direct action because it “claim[s] that a duty of
disclosure violation impaired the stockholders’ right to cast an informed
vote,” In re J.P. Morgan Chase & Co. S’holder Litig., 906 A.2d 766, 772
(Del. 2006); see Op. 15-18, then the forum-selection bylaw has no effect
because, as the majority notes, the bylaw “has no impact on direct
actions.” Op. 18. Thus, if true, the lawsuit could not be dismissed and
must remain in federal court. See 15 U.S.C. § 78aa(a).
                        LEE V. FISHER                      63

(2009) (Thomas, J., concurring). At its core, the theory that
judicially created policies always supersede clear statutory
language is not viable.
    Gap relies on McMahon for the proposition that the
Supreme Court has permitted private agreements that
eliminate one or more of the procedural mechanisms
available for enforcing the Exchange Act, so long as other
mechanisms remain viable. In McMahon, the Court
approved a contract that required arbitration of private
Exchange Act claims, blocking shareholders from bringing
those claims in court. The Court emphasized that
arbitration there “provide[d] an adequate means ofin
enforcing the provisions of the Exchange Act.” McMahon,
482 U.S. at 229. Accordingly, the Court indicated that the
antiwaiver provision would be violated “only” in the case
where arbitration was “inadequate to protect the
substantive rights at issue.” Id.
    But Gap’s discussion of McMahon elides two critical
components of the Court’s analysis, which rested on its
conclusions that (1) the Federal Arbitration Act (“FAA”)
authorizes agreements to arbitrate Exchange Act and other
statutory claims, id. at 225–27, and (2) an agreement to
assert Exchange Act claims in another competent forum
“does not constitute a waiver of ‘compliance with any
provision’ of the Exchange Act under § 29(a),” id. at 228,
so long as “arbitration is adequate to vindicate Exchange
Act rights,” id. at 238. In other words, arbitration
agreements generally do not violate Section 29(a) because
they are an exercise of “a broader right to select the forum
for resolving disputes,” rather than a means of waiving
claims altogether. Rodriguez de Quijas v. Shearson/Am.
Exp., Inc., 490 U.S. 477, 483 (1989).
64                      LEE V. FISHER

    By     contrast,    Gap’s    forum-selection      bylaw
accomplishes the opposite: rather than facilitating the
resolution of Exchange Act disputes, it forecloses all
derivative claims under the Act. McMahon cannot be
construed to hold that a bylaw relegating Exchange Act
claims to a forum that lacks authority to adjudicate them is
enforceable. Instead, under McMahon, such a bylaw
violates Section 29(a) because the specified forum is
“inadequate to enforce the statutory rights created by [the
Act].” 482 U.S. at 228–29.
    Gap also leans heavily on Yei A. Sun v. Advanced China
Healthcare, Inc., 901 F.3d 1081 (9th Cir. 2018), and
Richards v. Lloyd’s of London, 135 F.3d 1289 (9th Cir.
1998) (en banc), as demonstrating that the Exchange Act’s
antiwaiver provision cannot void Gap’s forum-selection
bylaw. But Sun involved state-law claims, not federal
statutory rights. Accordingly, its overbroad language—
namely, that “the strong federal policy in favor of enforcing
forum-selection clauses . . . supersede[s] antiwaiver
provisions in state statutes as well as federal statutes,
regardless whether the clause points to a state court, a
foreign court, or another federal court,” Sun, 901 F.3d at
1089–90—is dicta confined to its facts.            Moreover,
enforcement of the forum-selection clause there did not
result in the waiver of the substantive state-law rights
because the court conditioned the dismissal on the
requirement that the defendants “could not argue that
California securities laws do not apply to the disputed
transaction,” and defendants also “committed to refraining
from raising any argument” that Washington securities laws
were inapplicable in California. Id. at 1085–86, 1092
(internal quotation marks omitted). Specifically, the
agreement provided that claims subject to exclusive federal
                         LEE V. FISHER                      65

jurisdiction could be filed in the federal district court in
California, thus avoiding any issue of foreclosing federal
claims from being litigated in federal court. See id. at 1085.
    In Richards, our decision to uphold the forum-selection
and choice-of-law provisions leaned heavily on “the context
of an international agreement” and Supreme Court case law
specific to that context. 135 F.3d at 1295. Unlike Richards,
which involved a forum-selection clause in an international
agreement that was negotiated at arm’s length by
sophisticated parties, Gap’s bylaw applies to domestic
transactions and is not the product of negotiation. See
Seafarers, 23 F.4th at 726–27.
    Finally, neither Atlantic Marine nor M/S Bremen v.
Zapata Off-Shore Co., 407 U.S. 1 (1972), enforced a forum-
selection clause that would have required the plaintiff to
surrender a federal statutory claim. Atlantic Marine
concerned a clause requiring transfer between federal courts
in different states, which the plaintiff resisted on grounds of
convenience and the relative expertise of federal judges in
different states with respect to state-law claims. See 571
U.S. at 67–68. Bremen involved claims under the general
maritime law, and the plaintiff did not argue so much that
the foreign court selected by the contractual agreement
would apply a different substantive law as that it was more
likely to enforce the exculpatory clause to which the plaintiff
had already agreed. See 407 U.S. at 15–16.
    Moreover, both cases consistently emphasized the
importance of consent. Atlantic Marine, for instance,
presumed that the plaintiff had “agree[d] by contract to bring
suit only in a specified forum—presumably in exchange for
other binding promises by the defendant.” 571 U.S. at 63.
The Atlantic Marine Court underscored that “[t]he
66                       LEE V. FISHER

‘enforcement of valid forum-selection clauses, bargained
for by the parties, protects their legitimate expectations and
furthers vital interests of the justice system.’” Id. (emphasis
added) (quoting Stewart, 487 U.S. at 33 (Kennedy, J.,
concurring)). Similarly, Bremen stressed that “[t]he choice
of [an English] forum was made in an arm’s length
negotiation by experienced and sophisticated businessmen,”
407 U.S. at 12, and that the parties agreed to the forum-
selection clause “[a]fter reviewing the contract and making
several changes, but without any alteration in the forum-
selection or exculpatory clauses,” id. at 3.
    The present case differs from Atlantic Marine and
Bremen in three important respects. The first is that the
plaintiffs in those cases primarily opposed the selected
forum because of concerns related to convenience for the
plaintiff and the costs of litigation. The forum-selection
bylaw here, by contrast, presents the concern that such
bylaws enable a corporation to opt out of substantive federal
claims by selecting a forum in which such claims cannot be
brought. Second, neither case involved a forum-selection
clause that had been inserted via corporate bylaw.
Purchasers of Gap stock may or may not be sophisticated
parties, but they have no opportunity to negotiate the content
of the bylaws or alter terms not to their liking. They did not
agree to the forum-selection provision “in exchange for other
binding promises by the defendant,” nor does the provision
represent “their legitimate expectations.” Atlantic Marine,
571 U.S. at 63 (citation omitted). And third, the stakes are
raised when a forum-selection clause operates to bar a
federal statutory claim. Under the Supremacy Clause, the
plaintiff’s right to pursue such a claim supersedes other
policy considerations. See U.S. Const. art. VI, cl. 2.
                              LEE V. FISHER                              67

    In sum, the cases cited by Gap do not control the
outcome in this case because none involved the complete,
nonconsensual waiver of an exclusive federal statutory
claim.
                                    II
    Gap’s forum-selection bylaw is not only invalid; it is also
unenforceable because it violates a strong public policy of
the federal forum. The Supreme Court has held that a forum-
selection clause is generally enforceable under the forum non
conveniens doctrine unless there are “extraordinary
circumstances unrelated to the convenience of the parties”
that “clearly disfavor a transfer.” Atlantic Marine, 571 U.S.
at 52. As relevant here, a forum-selection clause is
unenforceable where “enforcement would contravene a
strong public policy of the forum in which suit is brought,
whether declared by statute or by judicial decision.”
Bremen, 407 U.S. at 15; see Sun, 901 F.3d at 1088.
    Lee points to two relevant public policies of the federal
forum: (A) Section 29(a)’s antiwaiver requirement, 15
U.S.C. § 78cc(a), and (B) Section 27(a)’s exclusive-
jurisdiction provision, 15 U.S.C. § 78aa(a), which precludes
transfer to a state forum.3

3
   Amici in support of Lee identify an additional federal statutory
policy:§ 14(a) of the Exchange Act reflects “the congressional belief that
‘(f)air corporate suffrage is an important right that should attach to every
equity security bought on a public exchange.’” And Borak’s implied
private right of action generally reflects a judgment that such “remedy is
necessary or at least helpful to the accomplishment of the statutory
purpose.” Cannon v. Univ. of Chi., 441 U.S. 677, 703 & n.35 (1979)
(citing Borak as an example).
68                      LEE V. FISHER

                              A
    The Exchange Act’s antiwaiver provision announces a
strong public policy of the federal forum. The majority’s
extension of Sun and Richards to domestic investments and
state-law remedies in this context “undermine[s] the pivotal
decisions by Congress in 1933 and 1934 to assume the
dominant role in securities regulation after decades of
ineffective state regulation.” Seafarers, 23 F.4th at 727.
Both federal securities acts contain antiwaiver provisions
that prevent parties from opting out of the federal laws in
favor of state law, regardless of how similar or strong the
state-law rights and remedies are. See 15 U.S.C. §§ 77n,
78cc(a).
    As the Seventh Circuit held in Seafarers, “[n]on-waiver
is woven into the public policy of the federal securities laws
because it is the express statutory law.” 23 F.4th at 727.
“And that law is binding,” particularly where there “are no
countervailing international policy interests at stake.” Id.
Here, enforcement of Gap’s forum-selection clause, which
points to a domestic forum, thwarts federal law by blocking
any adjudication of derivative § 14(a) claims.
    The majority cites Sun, which construed Richards as
holding that “an antiwaiver provision, without more, does
not supersede the strong federal policy of enforcing forum-
selection clauses.” 901 F.3d at 1090; cf. Gemini Techs., Inc.
v. Smith & Wesson Corp., 931 F.3d 911, 916 (9th Cir. 2019)
(holding that a similar Idaho nonwaiver provision “clearly
states a strong public policy” based on the contrived
distinction that the Idaho statute actually uses the words
“public policy”). Sun also stated that the “strong federal
policy in favor of enforcing forum-selection clauses would
supersede antiwaiver provisions in state statutes as well as
                         LEE V. FISHER                       69

federal statutes.” 901 F.3d at 1090. But these “holdings”
are more accurately characterized as dicta because the Sun
court did not have before it a conflict between an antiwaiver
provision and a forum-selection clause. See Op. 37–38 n.17.
Nor did it discuss how a federal common-law policy
favoring forum-selection clauses could “supersede” a
contrary federal statutory imperative. Id.
    Unlike McMahon, which required the Supreme Court to
reconcile the FAA’s “federal policy favoring arbitration”
and the Exchange Act’s antiwaiver provision, 482 U.S. at
226 (citation omitted), the “strong federal policy in favor of
enforcing forum-selection clauses” articulated in Sun, 901
F.3d at 1090, does not derive from a competing federal
statute. Instead, it is a matter of federal common law. That
judge-made policy must yield—in the absence of comity
principles favoring enforcement—when it contravenes a
federal statutory right. See U.S. Const. Art. VI, cl. 2; City of
Milwaukee v. Illinois & Michigan, 451 U.S. 304, 317 (1981)
(“[I]t is for Congress, not federal courts, to articulate the
appropriate standards to be applied as a matter of federal
law.”).
    The Supreme Court’s decision in Borak provides strong
support for the primacy of the Exchange Act over federal
common law.          Borak emphasized that “[p]rivate
enforcement of the proxy rules” under § 14(a) supplies “a
necessary supplement to [SEC] action.” 377 U.S. at 432. In
Borak, the question presented was whether there was an
implied right of action under § 14(a) and whether that right
should extend to derivative actions. Id. at 431–35. The
Supreme Court affirmed that there exists a private right of
action to enforce § 14(a) violations and that the right “exists
as to both derivative and direct causes.” Id. at 431. Borak
underscores the Exchange Act’s strong public policy of an
70                       LEE V. FISHER

exclusive federal forum in which to litigate Exchange Act
claims.
    The majority goes to great lengths to assert that Borak is
no longer good law. It claims that Borak was not well
reasoned, conflicted with Supreme Court precedent on
derivative actions, and was not well explained. See Op. 24–
35. But the majority also concedes that “[n]o Supreme Court
decision since Borak has expressly addressed this issue.”
Op. 29. Criticisms of a Supreme Court decision do not mean
that the decision is not binding on us. Such an assertion
would fly in the face of the rule of law and upend the
supremacy of Supreme Court decisions. We are not free to
overrule Supreme Court precedent. Borak has not been
overruled by the Supreme Court. See Va. Bankshares, Inc.
v. Sandberg, 501 U.S. 1083, 1104 n.11 (1991) (stating that
“[t]he object of [the Court’s] enquiry does not extend further
to question the holding of [Borak]”). It remains good law
and is binding on us.
                              B
    The Exchange Act’s exclusive-jurisdiction provision
indicates a legislative concern for greater federal control
over the adjudication of particular federal claims. See
Matsushita, 516 U.S. at 383 (holding that the Exchange
Act’s exclusive-jurisdiction provision sought “to achieve
greater uniformity of construction and more effective and
expert application of that law” (citation omitted)); see also
Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 483–84
(1981) (“The factors generally recommending exclusive
federal-court jurisdiction over an area of federal law
include . . . the assumed greater hospitality of federal courts
to peculiarly federal claims.”). That concern is amplified by
the presence of the Exchange Act’s antiwaiver provision.
                        LEE V. FISHER                     71

The joint operation of the Exchange Act’s exclusive-
jurisdiction provision, which precludes state courts from
hearing Exchange Act claims, and that Act’s antiwaiver
provision, which invalidates any agreement to waive an
Exchange Act claim, reflects a strong public policy of
ensuring federal control over Exchange Act claims.
Enforcing a forum-selection clause such as Gap’s would
ensure that no federal court could ever adjudicate the merits
of a derivative Section 14(a) claim brought against a
company whose bylaws include such a clause. This result
would be inconsistent with ensuring greater federal control
over the adjudication of such claims—a goal Congress
communicated by including both an exclusive-jurisdiction
provision and an antiwaiver provision in the Exchange Act.
Thus, because bylaws such as Gap’s have the effect of
transforming Exchange Act derivative actions into state-law
derivative actions and depriving plaintiffs of any forum for
such actions, enforcement of Gap’s bylaw contravenes a
strong federal public policy.
                             III
    In short, the Exchange Act voids Gap’s forum-selection
bylaw, and it is rendered unenforceable by the strong public
policy expressed by Congress in the Exchange Act’s
antiwaiver and exclusive-jurisdiction provisions. The
majority’s contrary conclusion renders the Exchange Act’s
protections meaningless, effectively prohibiting Lee’s
properly asserted derivative claim from being adjudicated in
any forum. That was not the intent of Congress.
   Therefore, I respectfully dissent.