Court Opinion

ID: 5288684
Source: CourtListenerOpinion
Date Created: 2022-01-07 19:00:56.251169+00
Date Added: 2024-06-11T09:17:32.175184
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 20-2244
SEAFARERS PENSION PLAN,
derivatively on behalf of The Boeing Company,
                                         Plaintiff-Appellant,

                                v.

ROBERT A. BRADWAY, et al.,
                                              Defendants-Appellees,

                               and

THE BOEING COMPANY,
                                       Nominal Defendant-Appellee.
                    ____________________

        Appeal from the United States District Court for the
          Northern District of Illinois, Eastern Division.
        No. 1:19-CV-08095 — Harry D. Leinenweber, Judge.
                    ____________________

  ARGUED NOVEMBER 30, 2020 — DECIDED JANUARY 7, 2022
               ____________________

   Before EASTERBROOK, WOOD, and HAMILTON, Circuit
Judges.
   HAMILTON, Circuit Judge. On October 29, 2018, a Boeing
737 MAX airliner crashed in the sea near Indonesia, killing
2                                                  No. 20-2244

everyone on board. A few months later, on March 10, 2019, a
second 737 MAX crashed in Ethiopia, again killing everyone
on board. Within days of the second crash, all 737 MAX air-
liners around the world were grounded. The United States
Federal Aviation Administration kept the planes grounded
until November 18, 2020, when it was satisﬁed that serious
problems with the planes’ ﬂight control systems had been cor-
rected.
    In December 2019, plaintiﬀ Seafarers Pension Plan, a
shareholder of the Boeing Company, ﬁled this derivative suit
on behalf of Boeing under Section 14(a) of the Securities Ex-
change Act of 1934, 15 U.S.C. § 78n(a)(1). The suit alleges that
Boeing oﬃcers and board members made materially false and
misleading public statements about the development and op-
eration of the 737 MAX in Boeing’s 2017, 2018, and 2019 proxy
materials. The district court dismissed the suit without ad-
dressing the merits, applying a Boeing bylaw that gives the
company the right to insist that any derivative actions be ﬁled
in the Delaware Court of Chancery. We reverse. Because the
federal Exchange Act gives federal courts exclusive jurisdic-
tion over actions under it, applying the bylaw to this case
would mean that plaintiﬀ’s derivative Section 14(a) action
may not be heard in any forum. That result would be contrary
to Delaware corporation law, which respects the non-waiver
provision in Section 29(a) of the federal Exchange Act, 15
U.S.C. § 78cc(a).
I. Factual and Procedural Background
   The Boeing Company is an international aerospace com-
pany headquartered in Illinois and incorporated under Dela-
ware law. Plaintiﬀ Seafarers Pension Plan is a Boeing share-
holder. In addition to the loss of 346 lives, the 737 MAX
No. 20-2244                                                  3

accidents and the subsequent grounding of all 737 MAX
planes and ensuing investigations and litigation will end up
costing Boeing billions of dollars. This case is a part of that
larger picture, but it presents issues that do not call upon us
to address the merits of plaintiﬀ’s claims or their role in the
larger aftermath of the 737 MAX crashes.
     The Seafarers Plan ﬁled this derivative suit under Section
14(a) of the Securities Exchange Act of 1934 alleging that Boe-
ing’s current and former oﬃcers and directors disseminated
materially false and misleading proxy statements from 2017
through 2019. See 15 U.S.C. § 78n(a)(1); 17 C.F.R. § 240.14a-9.
The Exchange Act gives federal courts exclusive jurisdiction
over suits ﬁled under the Act. 15 U.S.C. § 78aa. The Seafarers
Plan therefore ﬁled its complaint in the Northern District of
Illinois, where Boeing is headquartered.
   The defendants moved to dismiss based on the doctrine of
forum non conveniens, invoking a Boeing bylaw that pro-
vides 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 be-
      half of the Corporation … .
The defendants conceded that enforcement of the forum by-
law would foreclose the Seafarers Plan’s federal derivative
suit entirely. They argued, however, that Delaware law of-
fered a suﬃcient substitute that would allow the Seafarers
4                                                          No. 20-2244

Plan to vindicate its substantive rights under the Exchange
Act of 1934. The district court agreed with defendants and dis-
missed the suit. Seafarers Pension Plan v. Bradway, 2020 WL
3246326, at *4 (N.D. Ill. June 8, 2020). 1
    Applying the forum bylaw to this case is contrary to Del-
aware corporation law and federal securities law. In Part III,
we explain that the forum bylaw is unenforceable as applied
to this case because its application would violate Section 115
of the Delaware General Corporation Law. Delaware corpo-
ration law gives corporations considerable leeway in writing
bylaws, including bylaws with choice-of-forum provisions,
but it respects federal securities law and does not empower
corporations to use such techniques to opt out of the Ex-
change Act. In Part IV, we address the cases the district court
relied upon to grant dismissal. Before we discuss the merits,
however, we address in Part II the appropriate standard of re-
view.
II. Standard of Review
   The Seafarers Plan argues that we should decide de novo
the legal question whether the forum bylaw is enforceable.
Defendants argue that dismissal on forum non conveniens
grounds should be reviewed more deferentially, only for an
abuse of discretion. We have often said that forum non
conveniens calls for a trial court to exercise its sound
discretion and that we review such dismissals or denials of

    1  Along with its federal claims, the Seafarers Plan initially alleged
claims under Delaware law for breaches of fiduciary duty and unjust en-
richment. Once the defendants invoked the forum bylaw, the parties
agreed to dismiss the state-law claims without prejudice to allow refiling
in state court in Delaware.
No. 20-2244                                                      5

dismissals for abuse of discretion. E.g., Mueller v. Apple Leisure
Corp., 880 F.3d 890, 893–94 (7th Cir. 2018), quoting Deb v.
SIRVA, Inc., 832 F.3d 800, 805 (7th Cir. 2016); see also Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 257, 261 (1981) (ﬁnding no
abuse of discretion in granting dismissal in tort case in U.S.
court arising from aircraft crash in Scotland). If we were
dealing with an ordinary choice-of-forum clause in a contract,
that standard would apply.
    The speciﬁc problem here is diﬀerent, calling for what
amounts to de novo review. Boeing’s forum bylaw presents
only questions of law, which we ordinarily review de novo.
The district court explained that it dismissed this case because
it concluded, as a matter of law, that the Boeing forum bylaw
was enforceable in this case. Seafarers Pension Plan, 2020 WL
3246326, at *4. In a wide range of contexts, we have explained
that if a district court exercises its discretion based on an
erroneous view of the law, it will necessarily abuse its
discretion. See, e.g., Cassell v. Snyders, 990 F.3d 539, 545 (7th
Cir. 2021), quoting Abbott Labs v. Mead Johnson & Co., 971 F.2d
6, 13 (7th Cir. 1992) (in deciding preliminary injunction
motion, “district court ‘abuses its discretion when it commits
… an error of law’”); Schleicher v. Wendt, 618 F.3d 679, 688 (7th
Cir. 2010) (holding “district court did not commit a legal error,
or abuse its discretion” in deciding that plaintiﬀs oﬀered
suﬃcient evidence to invoke fraud-on-the-market theory to
prove reliance prong of Rule 10b-5 claim). In this context, it is
well-settled that the enforceability of a contract’s forum-
selection clause is a question of law that we review de novo.
E.g., Bonny v. Society of Lloyd’s, 3 F.3d 156, 159 (7th Cir. 1993);
see also Continental Ins. Co. v. M/V ORSULA, 354 F.3d 603, 607
(7th Cir. 2003); Hugel v. Corp. of Lloyd’s, 999 F.2d 206, 207 (7th
Cir. 1993); Northwestern Nat’l Ins. Co. v. Donovan, 916 F.2d 372,
6                                                     No. 20-2244

375 (7th Cir. 1990). Because the district court based its decision
on its view of legal issues, de novo review of the governing
questions of law is appropriate here.
III. Applying Delaware Corporation Law
    The most straightforward resolution of this appeal is un-
der Delaware corporation law, which we read as barring ap-
plication of the Boeing forum bylaw to this case invoking non-
waivable rights under the federal Exchange Act. We ﬁrst ad-
dress in Part III-A the nature of plaintiﬀ’s derivative Exchange
Act claim and then in Part III-B the relevant Delaware statutes
and case law on such forum-selection bylaws.
    A. Plaintiﬀ’s Derivative Claims Under the Exchange Act of
       1934
     Plaintiﬀ’s derivative suit under Section 14(a) is straightfor-
ward. Section 14(a) and its implementing regulation, SEC
Rule 14a-9, prohibit material misstatements or omissions in a
proxy statement. 15 U.S.C. § 78n(a)(1); 17 C.F.R. § 240.14a-
9(a). To state a claim under Section 14(a), a plaintiﬀ must al-
lege that (i) the proxy statement contained a material mis-
statement or omission, which (ii) caused plaintiﬀ’s injury, and
(iii) that the proxy solicitation itself, rather than the particular
defect in the solicitation, was an essential link in the accom-
plishment of the transaction. Mills v. Electric Auto-Lite Co., 396
U.S. 375, 384–85 (1970). As noted, the Exchange Act provides
that only federal courts may exercise jurisdiction over claims
that arise under the Act. 15 U.S.C. § 78aa. Section 14(a) may
be enforced in private actions by shareholders asserting their
own rights and in derivative actions asserting rights of a cor-
poration harmed by a violation. J.I. Case Co. v. Borak, 377 U.S.
426, 431−32 (1964).
No. 20-2244                                                    7

    In a derivative suit under Section 14(a), the theory “is that
a corporation’s board has been so faithless to investors’ inter-
ests that investors must be allowed to pursue a claim in the
corporation’s name.” Robert F. Booth Trust v. Crowley, 687 F.3d
314, 316–17 (7th Cir. 2012). A derivative suit is considered “an
asset of the corporation” and permits “an individual share-
holder to bring ‘suit to enforce a corporate cause of action
against oﬃcers, directors, and third parties.’” Kamen v. Kemper
Financial Servs., Inc., 500 U.S. 90, 95 (1991), quoting Ross v.
Bernhard, 396 U.S. 531, 534 (1970); Lefkovitz v. Wagner, 395 F.3d
773, 776 (7th Cir. 2005), quoting Kennedy v. Venrock Assocs., 348
F.3d 584, 589 (7th Cir. 2003).
    Here, plaintiﬀ alleges that the false and misleading proxy
statements caused harm to Boeing by enabling the improper
re-election of directors who had for years tolerated poor over-
sight of passenger safety, regulatory compliance, and risk
management during the development of the 737 MAX air-
liner. Plaintiﬀ further alleges that the proxy statements pro-
vided misleading recommendations to shareholders and
caused shareholders to vote down a shareholder proposal
calling for bifurcation of the CEO and chairman positions.
   Regardless of the ultimate merits of the claims, plaintiﬀ’s
chosen forum in the federal district where Boeing is head-
quartered seems appropriate for the case. To avoid that cho-
sen forum and defeat the claims entirely, defendants invoked
Boeing’s forum bylaw. If it can be applied to this case, the by-
law will force plaintiﬀ to raise its claims in a Delaware state
court, which is not authorized to exercise jurisdiction over Ex-
change Act claims. 15 U.S.C. § 78aa; Cottrell v. Duke, 737 F.3d
1238, 1247−48 (8th Cir. 2013). If that’s correct, checkmate for
defendants. That result would be diﬃcult to reconcile with
8                                                     No. 20-2244

Section 29(a) of the Exchange Act, which deems void contrac-
tual waivers of compliance with the requirements of the Act.
15 U.S.C. § 78cc(a).
    B. Delaware Corporation Law on Forum-Selection Bylaws
    We read Delaware corporation law as rejecting Boeing’s
use of its forum bylaw to foreclose entirely plaintiﬀ’s deriva-
tive action under Section 14(a). Section 115 of the Delaware
General Corporation Law addresses speciﬁcally bylaws that
impose choices of forums for litigation involving corporate af-
fairs. Section 115 provides in relevant part that “bylaws may
require, consistent with applicable jurisdictional require-
ments, 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. Section 115 deﬁnes “internal cor-
porate claims” to include derivative claims like this one:
“claims, including claims in the right of the corporation, (i)
that are based upon a violation of a duty by a current or for-
mer director or oﬃcer or stockholder in such capacity … .” 8
Del. C. § 115.
    For present purposes, the two key phrases in Section 115
are “consistent with applicable jurisdictional requirements”
and “courts in this State.” As applied here, Boeing’s forum by-
law violates Section 115 because it is inconsistent with the ju-
risdictional requirements of the Exchange Act of 1934, 15
U.S.C. § 78cc(a). Further, federal courts in Delaware are courts
“in” that State, as distinct from courts “of” that State. The stat-
utory language shows that Section 115 does not authorize ap-
plication of Boeing’s forum bylaw to close all courthouse
doors to this derivative action.
No. 20-2244                                                               9

    First, regarding the “jurisdictional requirements” phrase,
guidance from the Delaware General Assembly supports this
reading of Section 115. The synopsis accompanying the 2015
Amendments to the Delaware General Corporation Law an-
ticipated the question posed in this case. It cautioned that the
new Section 115 was “not intended to authorize a provision
that purports to foreclose suit in a federal court based on fed-
eral jurisdiction, nor is Section 115 intended to limit or expand
the jurisdiction of the Court of Chancery or the Superior
Court.” S.B. 75, 148th Gen. Assemb., Reg. Sess. (Del. 2015)
(synopsis). By eliminating federal jurisdiction over the Seafar-
ers Plan’s exclusively federal derivative claims, Boeing’s fo-
rum bylaw forecloses suit in a federal court based on federal
jurisdiction. That’s exactly what Section 115 was “not in-
tended to authorize.” 2
    Second, while we might hesitate to place decisive weight
solely on a choice of preposition in the statute, we must also
note that the choice is consistent with the Delaware Supreme
Court’s and our understanding of the Delaware statute. The
United States District Court and Bankruptcy Court for the
District of Delaware are certainly, in the statute’s words,
“courts in this State” of Delaware. In Salzberg v. Sciabacucchi,
227 A.3d 102, 119 (Del. 2020), the Delaware Supreme Court
addressed Section 115 and said it presumed that the reference

    2 Delaware law holds that a bill synopsis is a proper source from
which to glean legislative intent where the statutory language seems am-
biguous. Board of Adjustment of Sussex Cty. v. Verleysen, 36 A.3d 326, 332
(Del. 2012); Carper v. New Castle Cty. Bd. of Ed., 432 A.2d 1202, 1205 (Del.
1981). Section 115 as enacted was not materially different from the lan-
guage described in the synopsis.
10                                                    No. 20-2244

to “courts in this State” included federal courts located in the
state.
    If the statute had said “courts of this State,” the statutory
language might have given defendants a better toehold. Most
circuits treat forum-selection clause references to courts “of”
a state as not including federal courts in the state, but refer-
ences to courts “in” a state as including both state and federal
courts located in the state. See, e.g., New Jersey v. Merrill Lynch
& Co., 640 F.3d 545, 549 (3d Cir. 2011) (collecting cases, includ-
ing FindWhere Holdings, Inc. v. Sys. Env't Optimization, LLC,
626 F.3d 752, 755 (4th Cir. 2010), and Dixon v. TSE Int’l Inc.,
330 F.3d 396, 398 (5th Cir. 2003)); cf. Regis Associates v. Rank
Hotels (Management) Ltd., 894 F.2d 193, 195−96 (6th Cir. 1990)
(construing contractual clause consenting to “jurisdiction of
the Michigan Courts” as not clearly waiving statutory right to
remove case from state courts to a federal court in Michigan).
Similarly, for example, the federal Tax Injunction Act bars fed-
eral district courts from enjoining state tax collections when
“a plain, speedy and eﬃcient remedy may be had in the
courts of such State.” 28 U.S.C. § 1341 (emphasis added). That
statutory language means that such cases must ordinarily be
heard in state courts, as distinct from language designating
courts “in” a state as suitable forums. See City of Fishers v. Di-
recTV, 5 F.4th 750, 753 (7th Cir. 2021) (discussing Tax Injunc-
tion Act).
   From these signals in the statutory text and Delaware case
law, we conclude that Section 115 does not authorize use of a
forum-selection bylaw to avoid what should be exclusive fed-
eral jurisdiction over a case, particularly under the Exchange
Act.
No. 20-2244                                                   11

    Defendants counter that Section 115 does not matter be-
cause the Boeing bylaw is authorized under Section 109(b),
which provides broadly that a corporation’s “bylaws may
contain any provision, not inconsistent with law or with the
certiﬁcate of incorporation, relating to the business of the cor-
poration, the conduct of its aﬀairs, and its right or powers or
the rights or powers of its stockholders, directors, oﬃcers or
employees.” 8 Del. C. § 109(b). We are not persuaded that Sec-
tion 109(b) saves this bylaw in this case.
    We start with the general principle, which Delaware law
adopts, that more speciﬁc statutory provisions, like Section
115 for bylaws with forum-selection clauses, ordinarily take
precedence over more general provisions like Section 109.
E.g., Turnbull v. Fink, 668 A.2d 1370, 1377 (Del. 1995) (“Where
possible, a court will attempt to harmonize two potentially
conﬂicting statutes dealing with the same subject. If they can-
not be reconciled, however, the speciﬁc statute must prevail
over the general.”) (citations omitted). Section 109 includes
the limit “not inconsistent with law,” which does not invite
corporations to avoid non-waiver provisions like Section 29(a)
of the Exchange Act.
    Defendants counter that principle, however, by arguing
that in Salzberg v. Sciabacucchi, 227 A.3d 102 (Del. 2020), the
Delaware Supreme Court held that the more general Section
109 actually provides broader authorizations than Section
115. Defendants read too much into Salzberg, which does not
allow enforcement of Boeing’s forum bylaw in this case. In
Salzberg, several Delaware corporations wrote charters with
provisions requiring that any actions arising under the Secu-
rities Act of 1933 be ﬁled in federal courts. Id. at 109. Unlike
the Exchange Act of 1934, the Securities Act of 1933 allows
12                                                   No. 20-2244

plaintiﬀs to ﬁle suit in state or federal court and, signiﬁcantly,
bars removal from state to federal court. 15 U.S.C. § 77v(a);
Cyan, Inc. v. Beaver County Emps. Ret. Fund, 138 S. Ct. 1061,
1078–79 (2018).
    A shareholder brought a facial challenge to those federal
forum clauses. The Court of Chancery held them invalid. The
Delaware Supreme Court reversed, but on narrow grounds.
Salzberg held only that the challenged provisions were facially
valid under Section 102(b)(1) of the Delaware General Corpo-
ration Law, which broadly deﬁnes what corporate charters
and bylaws may contain. 8 Del. C. § 102(b)(1); Salzberg, 227
A.3d at 109, 113–14.
    Accordingly, Salzberg neither applies to claims brought
under the Exchange Act of 1934 nor bars securities plaintiﬀs
from bringing as-applied challenges to federal forum provi-
sions. Nothing in Salzberg suggests it would extend Section
109 (or Section 102(b)(1), for that matter) to allow application
of the forum bylaw to a case like this one, where it would ef-
fectively bar plaintiﬀ from bringing its derivative claims un-
der the 1934 Act in any forum. To the contrary, the Delaware
court stressed the harmony between Delaware corporation
law and federal securities law: “This Court has viewed the
overlap of federal and state law in the disclosure area as ‘his-
toric,’ ‘compatible,’ and ‘complimentary.’” 227 A.3d at 114,
quoting Malone v. Brincat, 722 A.2d 5, 13 (Del. 1998). Even
more to the point here, as noted above, Salzberg expressly pre-
sumed that the reference to “courts in this State” in the bylaws
authorized by the new Section 115 included federal courts,
227 A.3d at 119, which the Boeing forum bylaw does not.
    Defendants also contend that in Boilermakers Local 154 Re-
tirement Fund v. Chevron Corp., 73 A.3d 934 (Del. Ch. 2013), the
No. 20-2244                                                   13

Delaware Court of Chancery held that Section 109(b) author-
ized a forum selection bylaw identical to the Boeing forum
bylaw. Not quite, for there were critical diﬀerences. In Boiler-
makers Fund, the boards of two Delaware corporations, Chev-
ron and FedEx, had adopted bylaws designating the Dela-
ware Court of Chancery as the exclusive forum for four types
of suits: derivative suits, ﬁduciary duty suits, suits under Del-
aware corporation law, and internal aﬀairs suits. Id. at 942–43.
    Plaintiﬀs were shareholders of Chevron and FedEx who
alleged that the boards lacked statutory authority to adopt the
bylaws. They sought a declaration that the bylaws were fa-
cially invalid and amounted to breaches of ﬁduciary duty.
The Court of Chancery rejected the facial challenges, empha-
sizing that plaintiﬀs were required to show that the bylaws
could not “operate lawfully or equitably under any circum-
stances.” Id. at 948.
    In so holding, the court oﬀered important observations
about the purpose of Section 109(b), the nature of forum-
selection bylaws, and hypothetical as-applied challenges—
like this case—based on the enforcement of a forum-selection
bylaw to eliminate federal jurisdiction. These observations
make clear that Section 109(b) and Boilermakers Fund do not
authorize enforcement of a forum-selection provision like the
Boeing forum bylaw in a case like this one.
    First, the Court of Chancery noted that Section 109(b) “has
long been understood to allow the corporation to set ‘self-
imposed rules and regulations [that are] deemed expedient
for its convenient functioning.’” 73 A.3d at 951, quoting Gow
v. Consolidated Coppermines Corp., 165 A. 136, 140 (Del. Ch.
1933). Generally speaking, the court continued, forum bylaws
ﬁt that description because they are “procedural” and
14                                                  No. 20-2244

“process-oriented” rather than substantive. Boilermakers Fund,
73 A.3d at 951, quoting CA, Inc. v. AFSCME Emps. Pension
Plan, 953 A.2d 227, 236–37 (Del. 2008). The court determined
that the challenged forum-selection bylaws—directing
shareholders to ﬁle their internal aﬀairs claims in the state of
Delaware (Chevron) and in the Delaware Court of Chancery
(FedEx)—also ﬁt that description: they regulated “where
stockholders may ﬁle suit, not whether the stockholder may
ﬁle suit or the kind of remedy that the stockholder may obtain
on behalf of herself or the corporation.” Boilermakers Fund, 73
A.3d at 952; see also Salzberg, 227 A.3d at 115 n.51 (reiterating
Boilermakers Fund point that forum bylaws may regulate
where—not whether—shareholders may ﬁle suit).
   The Boilermakers Fund court then provided important
guidance for this case. The court addressed the plaintiﬀs’ at-
tempts to identify hypothetical situations where the chal-
lenged bylaws would operate unreasonably by precluding
plaintiﬀs from bringing claims—such as derivative claims un-
der the Exchange Act of 1934—that must be brought in federal
court. Boilermakers Fund, 73 A.3d at 961–62. The court ex-
plained that facially, “neither of the forum selection bylaws
purports in any way to foreclose a plaintiﬀ from exercising
any statutory right of action created by the federal govern-
ment.” Id. at 962. In fact, the Chevron bylaw had been
amended to avoid the problem we face here by expressly al-
lowing cases to be ﬁled in federal court in the state of Dela-
ware. Id. at 961.
    The plaintiﬀs asked a hypothetical question. Suppose the
board of FedEx sought to enforce the forum bylaw to foreclose
a plaintiﬀ from bringing a claim within the exclusive jurisdic-
tion of the federal courts? That’s this case. The Delaware
No. 20-2244                                                  15

Court of Chancery explained that in such a case, the board
“would have trouble” for two reasons:
       First, a claim by a stockholder under federal law
       for falsely soliciting proxies does not ﬁt within
       any category of claim enumerated in FedEx’s
       forum selection bylaw. Thus FedEx’s bylaw is
       consistent with what has been written about
       similar forum selection clauses addressing
       internal aﬀairs cases: “[Forum selection]
       provisions do not purport to regulate a
       stockholder’s ability to bring a securities fraud
       claim or any other claim that is not an intra-
       corporate matter.” Second, the plaintiﬀ could
       argue that if the board took the position that the
       bylaw waived the stockholder’s rights under the
       Securities Exchange Act, such a waiver would
       be inconsistent with the antiwaiver provisions
       of that Act, codiﬁed at 15 U.S.C. § 78cc.
Id. at 962 (footnotes omitted). The ﬁrst reason would not apply
to plaintiﬀ’s derivative action here, but the second reason ap-
plies directly to it. While the Court of Chancery declined to
“wade deeper into imagined situations” so as not to risk issu-
ing an advisory opinion, its brief foray into how a hypothet-
ical plaintiﬀ might protect her not-so-hypothetical rights un-
der the federal securities laws signals clearly enough that Del-
aware law would not look kindly on defendants’ eﬀort to ap-
ply the Boeing bylaw here.
   In future cases, Delaware courts may address broader
questions such as whether Section 109(b) would authorize a
bylaw that violates Section 115, but it is suﬃcient for our pur-
poses that the reasoning of Boilermakers Fund does not
16                                                  No. 20-2244

authorize application of the Boeing forum bylaw to this case,
where it would eﬀectively foreclose a claim under federal se-
curities law. The Court of Chancery made clear that enforce-
ment of a forum bylaw to foreclose a plaintiﬀ from exercising
her rights under the Exchange Act of 1934 would be incon-
sistent with the anti-waiver provision of that Act. 73 A.3d at
962. No Delaware law, at least to our knowledge, authorizes
such an inconsistency. To the contrary, Salzberg, Boilermakers
Fund, and the new Section 115 codifying that decision signal
clearly that Delaware is not inclined to enable corporations to
close the courthouse doors entirely on derivative actions as-
serting federal claims subject to exclusive federal jurisdiction.
IV. Distinguishing Bremen and Bonny
    To avoid this result, defendants also argue that they seek
only routine enforcement of a routine forum-selection clause
in a contract, citing M/S Bremen v. Zapata Oﬀ-Shore Co., 407
U.S. 1 (1972), and Bonny v. Society of Lloyd’s, 3 F.3d 156 (7th
Cir. 1993). The district court looked carefully at both cases and
ultimately concluded that Bonny supported dismissal based
on Boeing’s forum bylaw. We explained above why we con-
clude that Boeing’s forum bylaw, as applied to this case,
simply is not enforceable under Delaware law. It may be use-
ful, however, to explain why we also do not ﬁnd Bremen or
Bonny a suﬃcient basis for enforcing the forum bylaw here.
    We begin with Bremen. Zapata, a company based in Texas,
contracted with plaintiﬀ Unterweser, a German corporation,
to tow Zapata’s drilling rig (the Bremen) from Louisiana to It-
aly. M/S Bremen, 407 U.S. at 2. The towing contract provided
that any dispute arising from the contract must be brought
before the London Court of Justice. The rig was damaged in a
storm in international waters in the Gulf of Mexico. Zapata
No. 20-2244                                                    17

directed Unterweser to tow the damaged rig to Tampa, Flor-
ida, the nearest port of refuge. A week later, Zapata—ignoring
the terms of the contract—ﬁled suit in federal court in Tampa
for negligent towing and breach of contract. Unterweser in-
voked the forum-selection provision and moved to dismiss
for forum non conveniens. The district court denied Unter-
weser’s motion and concluded that Zapata’s choice of forum
should not be disturbed. The Fifth Circuit aﬃrmed.
    The Supreme Court reversed, teaching that such forum-
selection provisions in contracts are “prima facie valid and
should be enforced unless enforcement is shown by the resist-
ing party to be ‘unreasonable’ under the circumstances.” 407
U.S. at 10. The Court explained that there were “compelling
reasons why a freely negotiated private international agree-
ment, unaﬀected by fraud, undue inﬂuence, or overweening
bargaining power” should be fully enforced. Id. at 12.
    In the Bremen opinion itself, the Court emphasized the
international character of the transaction, where choice-of-
forum and choice-of-law agreements may be especially
helpful in case of disputes. Later cases show, however, that
Bremen stands for the broader proposition that contractually
valid choice-of-forum clauses will ordinarily be enforced. See,
e.g., Atlantic Marine Constr. Co. v. U.S. District Court, 571 U.S.
49, 62−64 (2013); Mueller, 880 F.3d at 894, quoting Atlantic
Marine, 571 U.S. at 64 (“forum-selection clauses should
control except in unusual cases”).
    Bremen diﬀers from this case most importantly in that it
involved a purely private contractual dispute. It did not in-
volve any claim under a federal statute, let alone a federal
statute with a non-waiver provision like Section 29(a) of the
Exchange Act. While the Supreme Court has generally been
18                                                 No. 20-2244

receptive to enforcing contractually valid forum-selection
clauses, neither Bremen nor other decisions have endorsed
such clauses as paths to avoid otherwise applicable federal
statutes. Instead, the Court has warned against such uses.
    In Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth Corp.,
473 U.S. 614 (1985), Chrysler asserted claims against
Mitsubishi, including an antitrust claim under United States
law. The parties’ contract required arbitration of disputes in
Japan. The Supreme Court enforced the clause and ordered
the parties to resolve their disputes in arbitration rather than
in a court. The Court did so, however, only after being assured
that the arbitration panel would apply United States antitrust
law, and only after issuing a pointed warning against using
an arbitration clause to avoid an otherwise-applicable federal
statute, even one without an anti-waiver provision like the
1934 Exchange Act’s Section 29(a). Id. at 636–38, 637 n.19.
    The agreement between Mitsubishi and Chrysler also said
it would be governed by Swiss law. Id. at 637 n.19. In an
amicus brief, the United States had raised the possibility that
the arbitral panel might read this choice-of-law provision as
governing not only the terms of the contract but also as
displacing United States law, including the Sherman Act,
where it would otherwise apply. Mitsubishi had told the
Court in oral argument that it was not trying to avoid
application of the Sherman Act by that device. Despite that
assurance, the Court still went out of its way to warn against
that possibility: “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.” Id. (citations omitted).
No. 20-2244                                                  19

That considered warning carries even more force in this case
under the Exchange Act of 1934, with its anti-waiver
provision. In short, neither Bremen nor the more general
policy in favor of enforcing contractual forum-selection
clauses supports application of Boeing’s forum bylaw to
foreclose entirely plaintiﬀ’s derivative Section 14(a) claims.
    Turning to this court’s decision in Bonny v. Society of
Lloyd’s, defendants emphasize that we enforced choice-of-law
and forum-selection provisions that had the eﬀect of foreclos-
ing plaintiﬀs’ claims under federal securities law. We did so
after being satisﬁed that English law would provide suﬃcient
protection and remedies. 3 F.3d at 161–62. Defendants con-
tend the same reasoning should apply to remedies under state
law in this case, and the district court agreed. We disagree be-
cause of a critical diﬀerence between Bonny and this case that
limits its reasoning.
    The plaintiﬀs in Bonny were United States citizens who
had invested in the English insurer, Lloyd’s of London. The
investment agreements provided that any disputes arising
out plaintiﬀs’ investments with Lloyd’s would be governed
by English law and that the courts of England would have ex-
clusive jurisdiction over such disputes. After sustaining
heavy losses, plaintiﬀs sued Lloyd’s in the Northern District
of Illinois alleging claims under Section 12 of the Securities
Act of 1933 and Section 10(b) of the Exchange Act of 1934. The
district court dismissed the suit based on the forum-selection
clause. Id. at 157. We aﬃrmed, reasoning that the choice-of-
law and forum-selection provisions did not violate United
States public policy and were therefore enforceable despite
plaintiﬀs’ reliance on the anti-waiver provisions of the 1933
and 1934 Acts.
20                                                          No. 20-2244

    The lack of a true conﬂict between English law and appli-
cable United States law was central to our decision. 3 F.3d at
161–62. First, citing Bremen, we noted that choice-of-law and
forum-selection provisions in agreements between domestic
and foreign businesses are “valid and should be enforced un-
less enforcement is shown by the resisting party to be unrea-
sonable under the circumstances.” Id. at 159, quoting Bremen,
407 U.S. at 10. The plaintiﬀs in Bonny, much like the plaintiﬀs
in Bremen, had failed to demonstrate that the provisions at is-
sue were unreasonable. Bonny, 3 F.3d at 160. Further, echoing
the Supreme Court’s language in Bremen, Mitsubishi Motors,
and Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974), we ex-
plained that the presumptive validity of such provisions of-
fered valuable predictability in international business trans-
actions. Bonny, 3 F.3d at 159–60, discussing Mitsubishi Motors,
473 U.S. at 629, and Scherk, 417 U.S. at 516.
    Even so, we harbored “serious concerns that Lloyd’s
clauses operate[d] as a prospective waiver of statutory reme-
dies for securities violations,” but in the end we were “satis-
ﬁed that several remedies in England vindicate[d] plaintiﬀs’
substantive rights while not subverting” the principles of full
and fair disclosure protected by the Securities Act of 1933.
Bonny, 3 F.3d at 160–61. 3 The international nature of the trans-
actions and the availability of adequate remedies under Brit-
ish law convinced us that the forum-selection and choice-of-

     3In Bonny, the record showed that English law afforded plaintiffs a
cause of action similar to their claims under Section 10(b) of the Exchange
Act of 1934 and Rule 10b-5. 3 F.3d at 161. There were no English rights and
remedies similar to those under Sections 12(1) and 12(2) of the Securities
Act of 1933. Id. at 162.
No. 20-2244                                                               21

law provisions were enforceable despite the anti-waiver pro-
visions in the 1933 and 1934 Acts. Id. at 162. 4
    Defendants argue that we should extend the same
analysis—focused on the suﬃciency of remedies under state
law—to enforce Boeing’s forum bylaw here. That argument
overlooks the decisive role that the international character of
the dispute played in Bonny. The English remedies were
deemed suﬃcient only in light of the international nature of
the investment agreements: “Given the international nature of
the transactions involved here, and the availability of
remedies under British law that do not oﬀend the polices
behind the securities laws, the parties’ forum selection and
choice of law provisions contained in the agreements should
be given eﬀect.” 3 F.3d at 162.
  There is no hint in Bonny that the same logic and result
would apply to a domestic transaction’s forum-selection

    4  Bonny is consistent with decisions in other circuits balancing these
competing interests when parties to international investments agree on for-
eign forums and foreign law. For example, in Haynsworth v. The Corpora-
tion, 121 F.3d 956 (5th Cir. 1997), the Fifth Circuit reiterated that United
States courts should “tread cautiously before expanding the operation of
U.S. securities law in the international arena,” particularly “in the case of
England, a forum that American courts repeatedly have recognized to be
fair and impartial.” Id. at 966–67 (footnote omitted). For similar holdings,
see Richards v. Lloyd’s of London, 135 F.3d 1289, 1294–96 (9th Cir. 1998) (en
banc); Roby v. Corporation of Lloyd’s, 996 F.2d 1353, 1364–66 (2d Cir. 1993);
Riley v. Kingsley Underwriting Agencies, Ltd., 969 F.2d 953, 958 (10th Cir.
1992); AVC Nederland B.V. v. Atrium Inv. P’ship, 740 F.2d 148, 158–59 (2d
Cir. 1984) (Section 29(a) did not prevent enforcement of choice of Dutch
forum and law). These decisions all seem generally consistent with the Su-
preme Court’s later decision in Morrison v. National Australia Bank, 561 U.S.
247 (2010), which limited extraterritorial application of United States se-
curities laws.
22                                                  No. 20-2244

clause that had the eﬀect of waiving federal securities rights
and remedies and leaving the investor to only state-law rem-
edies. To the contrary, extending Bonny to domestic invest-
ments and state-law remedies would undermine the pivotal
decisions by Congress in 1933 and 1934 to assume the domi-
nant role in securities regulation after decades of ineﬀective
state regulation. Both federal Acts contain anti-waiver provi-
sions that prevent parties from opting out of the federal laws
in favor of state law, no matter how similar or strong the state-
law rights and remedies are. See 15 U.S.C. §§ 77n & 78cc(a).
    As applied to plaintiﬀ’s Section 14(a) claims, Boeing’s
forum bylaw does not implicate the unique needs of
international trade or require us to parse the similarities and
diﬀerences between foreign and domestic securities laws. The
anti-waiver provision of Section 29(a) does not invite a
determination of whether state law oﬀers alternative
remedies that might be deemed suﬃcient against an inchoate
standard. Non-waiver is woven into the public policy of the
federal securities laws because it is the express statutory law.
And that law is binding—especially where, as here, there are
no countervailing international policy interests at stake.
Accord, Luce v. Edelstein, 802 F.2d 49, 57 (2d Cir. 1986) (forum-
selection clause provided for only state-court jurisdiction;
district court correctly dismissed most claims but retained
jurisdiction over Exchange Act claims); KDH Consulting Grp.
LLC v. Iterative Capital Mgmt. L.P., 2020 WL 7251172, at *9
(S.D.N.Y. June 29, 2020) (following Luce, retaining Exchange
Act claims but dismissing other claims).
   Bonny required a choice between United States law and
policy and foreign law and policy. Here, however, we see no
comparable tension between federal law and policy and
No. 20-2244                                                              23

Delaware state law and policy. After all, under the Supremacy
Clause of the United States Constitution, state courts enforce
and apply both state and federal law. See Claﬂin v. Houseman,
93 U.S. 130, 136 (1876) (“The law of the United States are laws
in the several States, and just as much binding on the citizens
and courts thereof as the State laws are. The United States is
not a foreign sovereignty as regards the several States, but is
a concurrent, and, within its jurisdiction, paramount
sovereignty.”), cited in Brandon v. Anesthesia & Pain Mgmt.
Assocs., 277 F.3d 936, 942 (7th Cir. 2002) (Illinois courts would
recognize claim for retaliatory discharge in violation of
Illinois public policy where employer ﬁred employee for
objecting to violations of federal anti-fraud law). The
Delaware Court of Chancery’s opinion in Boilermakers Fund
shows no relevant tension between Delaware corporation law
and public policy and federal securities law and policy.
Instead, as noted, the Court of Chancery said that the
defendant corporations would run into trouble under the
Exchange Act’s anti-waiver provision in Section 29 if they
tried to apply their forum-selection provisions to foreclose
entirely claims under the Exchange Act. 73 A.3d at 962. 5
    Finally, our dissenting colleague proposes an entirely dif-
ferent solution for the puzzle at this intersection of state

    5  For all of these reasons, we respectfully disagree with relevant
portions of several district court decisions that have extended the
reasoning of Bonny beyond its international foundations to enforce forum-
selection clauses that had the effect of foreclosing claims under otherwise-
applicable federal securities laws and leaving plaintiffs to only state-law
remedies. See Spenta Enterprises, Ltd. v. Coleman, 574 F. Supp. 2d 851, 857
(N.D. Ill. 2008), followed in Solid Q Holding, LLC v. Arenal Energy Corp.,
2017 WL 935891, at *2 n.17 (D. Utah Mar. 8, 2017), and Vernon v. Stabach,
2014 WL 1806861, at *6 (S.D. Fla. May 7, 2014).
24                                                  No. 20-2244

corporation law, federal securities law, and federal jurisdic-
tion and venue rules. The dissent’s proposed solution would
be to allow a Delaware state court to hear a derivative action
under Section 14(a), despite the Exchange Act’s provision for
exclusive federal jurisdiction in Section 29(a). As a matter of
policy, that solution might well be a reasonable outcome, at
least under a diﬀerent set of federal statutes and precedents.
That solution, however, is not consistent with our reading of
either Delaware law, the Exchange Act’s exclusive federal ju-
risdiction, Borak’s recognition of derivative claims under Sec-
tion 14(a), or the Supreme Court’s caution in the Mitsubishi
case, 473 U.S. at 637 n.19, against using choice-of-forum and
choice-of-law clauses to attempt prospective waivers of fed-
eral statutory remedies.
    Notably, defendants have not advocated for the dissent’s
novel proposal to send this dispute to state court in Delaware.
The defendants have instead argued all along for their pre-
ferred Catch-22 result that would bar plaintiﬀ’s derivative
Section 14(a) claim in any forum. Also, the dissent does not
cite any precedent adopting its solution for this case. In our
view, a state court would have to be bold indeed to adopt that
solution and to exercise jurisdiction over this derivative claim
despite Section 29(a), the lack of support from either side in
this lawsuit, and the Supreme Court’s warning in footnote 19
of the Mitsubishi case. See also Cottrell v. Duke, 737 F.3d 1238,
1247−48 (8th Cir. 2013) (reversing Colorado River abstention
over shareholder derivative action under Section 14(a) be-
cause Delaware state court could not exercise jurisdiction
over that claim in parallel derivative action).
  It may or may not be true, as the dissent suggests, that Del-
aware could abolish or further restrict derivative claims based
No. 20-2244                                                 25

on federal laws in ways consistent with the dissent’s views.
We decline to speculate on the point because Delaware has
not yet done so or signaled its intention to do so. Unless and
until it does, the better course is to hold that Boeing’s forum
bylaw cannot be applied to this derivative action asserting a
claim that is subject to exclusive federal jurisdiction.
   The judgment of the district court is REVERSED and the
case is REMANDED to the district court for further proceed-
ings consistent with this opinion.
26                                                    No. 20-2244

    EASTERBROOK, Circuit Judge, dissenting. Page 2 of my col-
leagues’ opinion sums up their rationale: “Because the federal
Exchange Act gives federal courts exclusive jurisdiction over
actions under it, applying the bylaw to this case would mean
that plaintiff’s derivative Section 14(a) action may not be
heard in any forum.” They deem that outcome unacceptable.
Yet plaintiff retains its right to sue directly under §14(a) in
federal court, and jurisdiction to enforce the Exchange Act is
not exclusive in the way my colleagues understand it. This
means that litigating the proposed derivative suit in state
court is not problematic.
    Section 14(a), 15 U.S.C. §78n(a), says that it is unlawful for
any person to solicit proxies in violation of a rule issued by
the SEC. It does not say one word about enforcement, nor
does any other part of the Exchange Act. Federal judges cre-
ated a private right of action—and the action thus created is
one that permits investors to sue issuers, not one that permits
issuers (the authors of the contested documents) to sue. See
Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083 (1991); Piper
v. Chris-Craft Industries, Inc., 430 U.S. 1 (1977). Nothing in Boe-
ing’s bylaw strips plaintiff, as a recipient of proxy materials,
of the ability to file a direct §14(a) action in federal court. And
since plaintiff retains that ability, it is hard to see how it has
been deprived of a right to enforce §14(a).
    Recall what a derivative action is. An investor who wants
a corporation to sue members of its own board or manage-
ment proceeds in multiple steps. First the investor demands
action from the board. If the board says no, the investor sues
the directors seeking a judicial order compelling them (or per-
mitting the investor on their behalf) to require the corporation
to sue. If a court issues such an order, the corporation
No. 20-2244                                                     27

(perhaps represented by the investor as its agent) litigates
against the directors. The first two steps, which address the
question “Who speaks for the corporation?”, are matters of
corporate internal affairs under state law. So Kamen v. Kemper
Financial Services, Inc., 500 U.S. 90 (1991), holds with respect to
derivative suits whose ultimate (third) step would rest on fed-
eral law. It is state law, Kamen tells us, that determines both
when demand is required and when investors can step into a
corporation’s shoes. And the third step—in which a corpora-
tion, author of the proxy materials, sues its own directors—
also rests on state law. Plaintiff’s theory at the third step
would be that the directors violated their state-law duty of
care by permitting Boeing to do things that exposed it to lia-
bility under federal law. Section 14(a) plays a role in such liti-
gation, to be sure, but does not create the claim. Nor is the
derivative claim necessary to enforce the federal rule, which
is done through investors’ or the SEC’s direct suits.
    Suppose Delaware were to abolish derivative suits. Inves-
tors still could sue managers for violating the state-law duties
of care or loyalty. Investors still could sue companies under
statutes such as §14(a). Would abolishing derivative actions
violate federal law? I can’t see how. And if states can abolish
derivative suits without violating §14(a), they can permit cor-
porations to establish conditions on derivative suits. The fed-
eral right is for investors or the SEC to sue directly. Many in-
vestors have sued Boeing directly about the 737 MAX debacle.
A derivative suit adds only a procedural snarl.
   Virginia Bankshares holds that the existence of a private
right of action under §14 cannot be taken for granted. It is not
an on/off matter, in which every possible claim in the name of
§14 is proper. Instead the judiciary proceeds theory by theory.
28                                                   No. 20-2244

The Supreme Court has never held or even intimated that
there is a federal right to pursue a derivative claim under
§14(a) when the investor can pursue a direct claim. J.I. Case
Co. v. Borak, 377 U.S. 426, 432 (1964), holds that §14 supports
a derivative claim when its denial would “be tantamount to a
denial of federal relief”; that condition does not hold when
the private plaintiff can pursue a direct action in federal court.
    Virginia Bankshares treats Borak as limited to its facts and
declines to extend private rights under §14(a) to new theories.
In the 30 years since, the Justices have told us that the days of
authorizing private actions in common-law fashion are over.
See, e.g., Jesner v. Arab Bank, PLC, 138 S. Ct. 1386, 1402 (2018)
(describing the Court’s “reluctance to extend judicially cre-
ated private rights of action”). Borak is now a derelict. We
should not expand it to a situation in which private rights can
be enforced in direct suits.
    As for the supposed exclusivity of jurisdiction under the
Exchange Act: since per Kamen at least the first two steps rest
on state law, it is hard to see how federal jurisdiction over de-
rivative litigation could be exclusive. Congress has recog-
nized this. For 61 years the Securities Exchange Act of 1934
did not mention derivative litigation. That changed in 1995,
with the Private Securities Litigation Reform Act. One feature
of this statute, which amends the 1934 Act, permits issuers to
remove suits filed, nominally under state law, when the sub-
ject matter comes within the scope of federal law. See gener-
ally Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S.
71 (2006). But derivative suits can’t be removed. See 15 U.S.C.
§77p(f)(2)(B). Congress thus has told us that derivative suits
related to securities matters may begin in state court—and, if
No. 20-2244                                                       29

they begin there, stay there. That’s inconsistent with my col-
leagues’ view that they must be in federal court.
    Section 27(a) of the Exchange Act, 15 U.S.C. §78aa(a), pro-
vides for exclusive jurisdiction of claims arising under the Ex-
change Act and the SEC’s rules, but a derivative suit arises
under state law even if a federal issue may come to the fore
eventually. More: Shearson/American Express, Inc. v. McMahon,
482 U.S. 220 (1987), treats exclusivity under §27(a) as a right
that people may waive. 482 U.S. at 227–38. It added that the
anti-waiver clause in §29(a), 15 U.S.C. §78cc(a), is limited to
the Act’s substantive standards. This meant in McMahon that
issuers and investors are free to agree to arbitration.
McMahon’s reasoning means that other forum-selection
agreements are permissible—after all, the Court deems arbi-
tration a kind of forum-selection agreement, which Scherk v.
Alberto-Culver Co., 417 U.S. 506 (1974), held to be compatible
with the Exchange Act. The provision in Boeing’s bylaws is
just another forum-selection clause. (Under Delaware law,
bylaws are contracts between corporations and investors. See
ATP Tour, Inc. v. Deutscher Tennis Bund, 91 A.3d 554, 558 (Del.
2014).) The bylaw waives any right to exclusive federal juris-
diction. Delaware will provide whatever substantive relief is
appropriate, if its judiciary first holds that plaintiff can litigate
on Boeing’s behalf.
    Any doubt could be resolved by decomposing a derivative
claim into its components: the first two steps in state court un-
der state law, and the third (if the state judiciary authorizes
plaintiff to represent Boeing) in federal court. That would do
minimal damage to Delaware law and Boeing’s bylaw. The
majority’s approach, by contrast, demolishes a sensible state
scheme.
30                                                            No. 20-2244

     I acknowledge that Boeing has not relied on Kamen,
McMahon, or Virginia Bankshares. The principle of party
presentation normally limits a federal court to resolving the
parties’ contentions. See United States v. Sineneng-Smith, 140 S.
Ct. 1575 (2020). Yet Boeing has vigorously defended the va-
lidity of its bylaw, though it has slighted the choice-of-law
considerations that I have stressed. A federal court is not
bound by litigants’ beliefs about the meaning of a jurisdic-
tional provision such as §27(a). We must resolve jurisdictional
issues correctly no matter what the parties say or omit. And
Kamen concerns the appropriate treatment of parties’ mis-
taken assumption that federal procedures govern derivative
litigation in which there is a federal substantive issue. Both
sides in Kamen told this court that federal substance implies
federal procedures for derivative litigation; they disagreed
only about what those procedures should be. After we de-
vised a federal rule about demand on the board of directors,
the Supreme Court reversed us for accepting the parties’ mu-
tual assumption. The Justices told us to apply state law to pro-
cedural matters in derivative suits, no matter the source of the
substantive theory. We should not make the same mistake
again.
   None of what I have said so far would matter if, as the
majority concludes, Boeing’s bylaw is unlawful under Dela-
ware law. Yet my colleagues’ analysis of that subject is col-
ored by their belief that the bylaw extinguishes a right under
federal law. I’ve shown why that is not so.
   Read on its own terms, 8 Del. Code §115 does not prohibit
Boeing’s bylaw. The statute provides:
     The certificate of incorporation or the bylaws may require, con-
     sistent with applicable jurisdictional requirements, that any or all
No. 20-2244                                                                31

   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.

This does not prohibit bylaws that limit derivative claims to
state court. To the contrary, it authorizes such bylaws and
prohibits only those that prevent litigation in state court. Boe-
ing’s bylaw does not transgress that rule.
    Suppose we treat plaintiffs’ derivative suit as something
other than an “internal corporate claim[]”—I think that it is
one, but suppose otherwise. That would make §115 irrelevant.
It would neither authorize nor prohibit the bylaw.
   The most authoritative word about the meaning of §115
comes from the Supreme Court of Delaware.

   Section 115 merely confirms affirmatively … that a charter may
   specify that internal corporate claims must be brought in “the
   courts in this State” … while prohibiting provisions that would
   preclude bringing internal corporate claims “in the courts of this
   State.” Section 115, read fairly, does not address the propriety of
   forum-selection provisions applicable to other types of claims. If
   a forum-selection provision purports to govern intra-corporate lit-
   igation of claims that do not fall within the definition of “internal
   corporate claims,” we must look elsewhere … to determine
   whether the provision is permissible.

Salzberg v. Sciabacucchi, 227 A.3d 102, 119 (Del. 2020). This tells
us that §115 either supports Boeing’s bylaw or is irrelevant to
it. My colleagues say that 8 Del. Code §109(b), on which Boe-
ing relies as the “elsewhere,” does not authorize its bylaw be-
cause §115, as the more specific law, takes precedence. Yet
32                                                    No. 20-2244

Salzberg directs courts to look outside §115 unless the bylaw
does something that §115 forbids—and §115 forbids only pro-
visions that block litigation in Delaware. Section 109(b) is a
general grant of authority to adopt bylaws. Given the under-
standing of §115 in Salzberg, §109(b) is adequate to the task.
    I accept my colleagues’ observation that federal district
courts are courts “in” each state, but this does not have the
significance they see in “in”. Section 115 says that a bylaw
may call for litigation “exclusively in any or all of the courts in
this State” (emphasis added). Just as a federal district court is
“in” Delaware, so is the state’s Court of Chancery. The option
to choose among “any” of the courts “in” Delaware gives Boe-
ing the right to do exactly what it has done. My colleagues, by
contrast, read “any or” out of §115, leaving only “all” as an
option.
    I end where I began, just as my colleagues have done.
Their beginning is a belief that the bylaw coupled with §27(a)
strips plaintiff of a federal right to litigate a derivative §14(a)
claim. But if there is no such thing as a derivative §14(a) claim
divorced from state corporate law, if derivative suits are
proper in state courts, and if exclusivity under §27(a) is
waivable—indeed, if any one of these three propositions
holds—then there is no problem with litigating plaintiff’s
claim in the courts of Delaware.