Chevron Forum Shopping Bylaw Invalid, Shareholder Says
Chevron Forum Shopping Bylaw Invalid, Shareholder Says
(CN) - Chevron got slapped with a shareholder derivative action for adopting a "forum shopping" bylaw requiring shareholder actions to be filed in the Delaware Court of Chancery to the exclusion of all other courts.Stephen Bushansky claims the bylaw is invalid because it conflicts with federal constitutional and statutory provisions and infringe upon federal jurisdiction of the California courts as well as other state courts.
Plaintiff asserts that the bylaw is not enforceable because its provisions attempt to subject stockholders to Delaware's legal processes in conflict with other state, federal and due process laws.
"Moreover, the Exclusive Forum Bylaw provides that any stockholder who sues in any forum other than the Delaware Court of Chancery may be sued by the company for breach of the Exclusive Forum Bylaw and held liable for the company's expenses in the other forum," the complaint states.
In addition, the bylaw "requires that actions arising under provisions of the Delaware General Corporation Law that are actions at law, rather than actions at equity, must be brought in the Delaware Court of Chancery even though the court's statutorily and historically defined jurisdiction excludes such claims," the complaint states.
Bushansky named board chairman and CEO John Watson as well as board members and company directors Samuel Armacost, Linnet Deily, Robert Denham, Robert Eaton, Chuck Hagel, Enrique Hernandez Jr., Franklyn Jenifer, George Kirkland, Sam Nunn, Donald Rice, Kevin Sharer, Charles Shoemate, John Stumpf, Ronald Sugar and Carl Ware as defendnats.
He is seeking an order preventing the company from enforcing the bylaw, to have it declared invalid, requiring the company repay any damages or losses that it has caused as well as any court costs and attorney's fees generated by shareholder action.
Bushansky, of New York, filed the complaint in the San Francisco Division of the U.S. District Court of Northern California. He is represented by Joseph H. Weiss, James E. Tullman and Joshua M. Rubin of Weiss & Lurie of New York and by Leigh A. Parker in Los Angeles.
Copyright Courthouse News Service 2012
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