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    2015

    Exclusive Venues: Litigating on a Corporation’s Home Turf

    Defending a corporation and its board in shareholder litigation can be the equivalent of playing one football game on two (or more) different fields. Exclusive-venue provisions help corporate boards and their counsel reduce the time and dollar costs of complex lawsuits by restricting the number of forums.

    Bryan B. House & Andrew James Wronski

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    football and football fieldIn response to seemingly ubiquitous shareholder suits, usually challenges to mergers and acquisitions, companies increasingly are adopting exclusive-forum provisions in their charters or bylaws.1 These provisions require that certain lawsuits regarding the internal affairs of corporations, including derivative actions, stockholder class actions, and other disputes asserting that directors and officers breached fiduciary duties, be litigated in a specific court, most often in the jurisdiction in which a corporation is incorporated or has its principal place of business. While this movement toward exclusive-forum provisions has largely been a Delaware phenomenon, the arguments in favor of such provisions are equally strong for companies incorporated in Wisconsin.

    To date, no Wisconsin court has addressed the enforceability of board-adopted exclusive-forum provisions. Wisconsin courts have at times followed the lead of courts of Delaware, where a large percentage of companies are incorporated and significant corporate law issues are decided by Delaware’s famed Court of Chancery.2 In other instances, however, Wisconsin courts have deviated considerably from established Delaware precedent. After surveying Wisconsin statutes and case law and recent decisions in Delaware and other states regarding exclusive-forum provisions, this article concludes that a Wisconsin court would be likely to follow Delaware’s lead and enforce such a provision. Thus, Wisconsin companies might want to consider enacting such provisions.

    Multijurisdiction Shareholder Litigation and Its Vices

    In brief, an exclusive-forum provision specifies that certain claims brought by shareholders regarding a corporation’s internal affairs must be litigated in a court of competent jurisdiction in a particular state. Most of the early adopting companies were incorporated in Delaware and naturally chose Delaware as the forum. Courts have held, however, that a company may choose either the state of its incorporation or the state of its principal place of business (often where it is headquartered).3

    Exclusive-forum provisions typically cover a variety of claims against officers and directors, including, among others, derivative actions brought on behalf of a corporation and actions asserting breach-of-fiduciary-duty claims under state law. The rapid proliferation of suits challenging mergers and acquisitions, however, largely has been credited with the rise of these provisions. Such suits have become a burdensome fact of life for publicly traded companies in the United States.4

    Because exclusive-forum bylaws do not restrict the shareholders’ rights to bring claims, such bylaws should be statutorily valid under Wisconsin law.

    Indeed, of mergers or acquisitions valued over $100 million announced in the last five years, more than 90 percent have drawn at least one challenge alleging breaches of fiduciary duty by a board of directors.5 From 2009 through 2013, most deals were challenged in multiple jurisdictions as plaintiffs’ firms jockeyed for control of the litigation and the chance at a fee award.6 The plaintiffs’ bar also has been expanding its use of such suits to regularly allege that directors have breached their fiduciary duties with respect to executive compensation and purported disclosure failures in proxy statements and other public filings.7

    While companies cannot avoid these suits entirely, exclusive-forum provisions are designed to avoid the expense and difficulty of litigating virtually identical suits challenging the same alleged misconduct in more than one jurisdiction. The effects of such duplicitous suits often include additional demands on the time of officers and directors, additional attorney fees, and the risk of inconsistent judgments.

    Wisconsin companies are not immune from the multijurisdictional litigation that Delaware companies have bemoaned for years. After two Wisconsin corporations announced a merger in 2014, shareholders challenged the merger with 10 lawsuits in three jurisdictions: Brown County, Milwaukee County, and the U.S. District Court for the Northern District of Illinois.

    Requiring all claims to be brought in a single court can avoid the procedural wrangling that accompanies multiforum litigation and can allow the defendants to more quickly seek a dismissal or (in some cases) a settlement that will bind all shareholders. Exclusive-forum provisions can also enhance predictability by ensuring that suits are litigated in courts most familiar with the law applicable to corporations incorporated in that particular state. The latter point is particularly significant because Wisconsin courts are becoming more familiar with litigation challenging mergers and acquisitions and Wisconsin law may be favorable to officers and directors facing such claims.8

    Exclusive-forum Provisions Under Delaware Law

    The genesis of exclusive-forum provisions can be traced to a comment in an opinion Vice Chancellor J. Travis Laster of the Delaware Court of Chancery wrote in 2010. In a discussion regarding the leadership structure of the plaintiff’s counsel group in a contested merger case, the vice chancellor noted that the Court of Chancery’s increasing oversight of such matters might prompt plaintiffs to seek a friendlier jurisdiction in which to file suit.9 The Revlon decision invited companies concerned about such multidistrict litigation to adopt “charter provisions selecting an exclusive forum for intra-entity disputes.”10

    Bryan Housecom bhouse foley Bryan House, Minnesota 1993 cum laude, is a partner with Foley & Lardner LLP and the chair of the Milwaukee office Litigation Department and a member of the firm’s Securities Enforcement & Litigation and Government Enforcement Practice. His litigation experience focuses on representation of companies and their directors and officers in litigation, investigations, and enforcement matters arising under state law and the federal securities laws. He also focuses his practice on corporate governance matters, as well as investigations and litigation relating to whistleblowers.

    Andy Wronskicom awronski foley Andy Wronski, Minnesota 1994 summa cum laude, is a litigation partner at Foley & Lardner LLP. His practice focuses on complex litigation and trial work, representing corporate clients involved in sophisticated, high-stakes commercial and financial disputes.

    The authors thank Nate Imfeld, an associate in the firm’s Milwaukee office, for his assistance with this article.

    In the years since the Revlon decision, many companies have taken Vice Chancellor Laster’s advice, sometimes as a strategy for containing expected litigation when a merger is just around the corner. Other companies have enacted exclusive-forum provisions on a “clear day,” that is, when no potential transaction was on the horizon. While the Revlon case did not involve an exclusive-forum provision, and thus its discussion of the issue was not precedential, Delaware courts have subsequently upheld exclusive-forum provisions enacted in both circumstances.11

    For example, in Boilermakers, shareholders of Chevron and FedEx sued, alleging that the exclusive-forum bylaws enacted by those companies’ boards were facially invalid.12 The plaintiffs claimed that the two boards lacked statutory authority for such a bylaw under the Delaware General Corporation Law (DGCL) because exclusive-forum bylaws regulated “external” matters and not “internal” matters of corporate governance.13 The plaintiffs further argued that the exclusive-forum provisions were contractually invalid because they had been adopted unilaterally by the boards and not directly approved by the shareholders.14 The court rejected both arguments.

    First, the court noted that, under Delaware law, “[t]he bylaws of a corporation are presumed to be valid,”15 and that the DGCL “has long been understood to allow the corporation to set ‘self-imposed rules and regulations [that are] deemed expedient for its convenient functioning.’”16 The court then concluded that the exclusive-forum bylaws fit this “process oriented” description, because they “regulate 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.”17 As a result, the court concluded that forum-selection bylaws are “statutorily valid under Delaware law.”18

    Second, the court dispensed with the argument that the exclusive-forum provisions were not contractually binding, noting that the Delaware Supreme Court “has made clear that the bylaws constitute a binding part of the contract between a Delaware corporation and its stockholders.”19 The court noted that Delaware has rejected the “vested rights” doctrine that would prevent boards from modifying bylaws that affect preexisting shareholder rights without shareholder consent.20 The court reasoned that the boards’ unilateral adoption of the bylaws did not render them invalid, because both the DGCL and the bylaws themselves granted boards this power, and therefore the plaintiffs were on notice that the boards might exercise it.21

    Pointing to U.S. Supreme Court precedent, the court concluded that forum-selection clauses are “as a facial matter of law, contractually binding.”22 The court thus concluded that the shareholders were bound by the bylaws, and their challenge to the bylaws’ validity failed.

    The exclusive-forum provisions in Boilermakers selected the companies’ state of incorporation, Delaware, as the exclusive forum. The rationale of Boilermakers was extended when the Court of Chancery subsequently upheld forum-selection bylaws requiring litigation in North Carolina, the state in which the defendant corporation, First Citizen BancShares Inc., has its principal place of business.23 The City of Providence court concluded, in a case raising the same substantive arguments as Boilermakers, that the particular forum chosen by the company is immaterial to determining whether the exclusive-forum provision is enforceable.24

    When courts in other jurisdictions have confronted whether to enforce exclusive-forum bylaws enacted by Delaware corporations, they have almost uniformly upheld the provisions as enforceable under Delaware law.25 There are two principal outliers from these decisions,26 Galaviz v. Berg and Roberts v. TriQuint SemiConductor Inc.

    The Galaviz court held that corporate bylaws were unlike ordinary contracts and rejected a Delaware corporation’s forum-selection bylaw because shareholders had not directly assented to its adoption. The Galaviz court expressly did not decide whether Delaware law allowed directors to adopt an exclusive-venue provision, but held that the subject bylaw could not limit the plaintiffs’ right to sue in federal court in California.27 Galaviz was decided before Boilermakers, however, and was criticized by that decision for failing “to appreciate the contractual framework established by the [DGCL] for Delaware corporations and their stockholders.”28

    Similarly, the TriQuint decision, in which the court refused to enforce a Delaware corporation’s exclusive-forum bylaw because it was enacted the day the defendant company announced the merger that became the subject of the suit, was decided before City of Providence, which endorsed an exclusive-forum bylaw enacted in exactly that way. As a result, subsequent decisions have rejected TriQuint as being inconsistent with Delaware law and have upheld exclusive-forum provisions using the Boilermakers and City of Providence framework.29

    To the extent that the validity of exclusive-forum bylaws in Delaware was in doubt, that doubt was extinguished when the Delaware General Assembly amended the DGCL to provide that a company’s certificate of incorporation or bylaws “may require, consistent with applicable jurisdictional requirements, that any and 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.”30 The Delaware Legislature noted, however, that the law “is not intended to foreclose evaluation of whether the specific terms and manner of adoption of a particular provision … comport with any relevant fiduciary obligation or operate reasonably in the circumstances presented.”31

    The Validity of Exclusive-forum Provisions Under Wisconsin Law

    While Wisconsin courts often follow Delaware’s lead on matters of corporate governance, there have been notable exceptions in recent years. For instance, Delaware law imposes on directors a duty to obtain the best possible price in the context of a merger or sale of a company.32 Delaware law also requires that courts employ heightened scrutiny when considering directors’ adoption of defensive measures to thwart hostile takeovers.33

    Wisconsin courts have rejected both of these holdings, citing, among other things, Wis. Stat. section 180.0827, the Wisconsin statute that allows directors to consider so-called other constituencies besides shareholders when considering whether to engage in a merger or other significant transaction.34

    While one cannot assume that Wisconsin courts would blindly follow the Delaware Court of Chancery, there are good reasons to believe that Wisconsin courts would follow Delaware in recognizing the validity of exclusive-forum clauses. First, the statutory scheme allowing for board-created bylaws in Wisconsin is similar to that found in Delaware. Second, Wisconsin law has long recognized the contractual nature of corporate bylaws, while at the same time rejecting the “vested rights” doctrine. Finally, Wisconsin law favors contractual forum-selection provisions. Wisconsin law is thus consistent with the legal principles on which the Boilermakers and City of Providence decisions rest, which would suggest that the arguments that carried the day in those cases would be persuasive to a Wisconsin court.

    Wisconsin’s Statutory Scheme. Like the DGCL, Wis. Stat. chapter 180 grants authority to a corporation’s board of directors to adopt, amend, or repeal bylaws, subject to the oversight of the shareholders.35 Further, the Wisconsin Statutes permit the adoption of any bylaws “managing the business and regulating the affairs of the corporation that is not inconsistent with its articles of incorporation or the law of this state.”36 This grant of authority is the same statutory hinge on which the Boilermakers decision turned.37

    As the Boilermakers court noted, exclusive-forum provisions “plainly relate to the conduct of the corporation by channeling internal affairs cases into the courts of the state of incorporation, providing for the opportunity to have internal affairs cases resolved authoritatively by [that state’s] Supreme Court if any party wishes to take an appeal.”38 Wisconsin’s statute similarly encompasses matters relating to the conduct of the corporation.39

    While the Delaware statute expressly mentions the board’s ability to regulate stockholders’ rights or power, the absence of such language from the Wisconsin statute should not matter. Because exclusive-forum bylaws do not restrict the shareholders’ rights to bring claims, such bylaws should be statutorily valid under Wisconsin law. As the Boilermakers court noted, exclusive-forum provisions do not limit the substantive rights of shareholders to hold the board of directors to account but relate to the specific court in which the accounting must occur.40

    The Contractual Relationship Between Shareholders and Corporations. With respect to the contract analysis, Wisconsin has long recognized that corporate bylaws are contracts between the corporation and its shareholders and should be enforced consistent with contract law principles.41

    Additionally, like Delaware law, Wisconsin law rejects the “vested rights” doctrine. The Wisconsin Supreme Court, in Johnson v. Bradley Knitting Co., upheld changes to a corporation’s articles that had been amended consistent with Wisconsin statutes over the objection of the plaintiff, “who consented thereto in advance when he became a member and stockholder of the defendant company.”42 Thus, so long as the corporate charter is consistent with the Wisconsin Statutes and allows the board of directors to adopt bylaws, board-enacted exclusive-forum bylaws should contractually bind the shareholders without the shareholders’ express consent.

    As a result, just as in Boilermakers, there is no authority to support the argumentthat shareholders lacked notice of a possible change to the bylaws or that a board-enacted bylaw requires shareholder approval for its validity. Like the Delaware statutes, Wisconsin law makes unilateral bylaw alterations at the board’s discretion a part of the contractual relationship between the corporation and its shareholders.43 The only remaining question, then, is whether a forum-selection clause is the type of contractual provision that Wisconsin courts would enforce.

    Forum-selection Provisions Are Presumptively Valid. Wisconsin law holds that contractual forum-selection clauses are presumptively valid and are the most efficient way for parties to ensure that their preferred jurisdiction hosts any litigation.44 Indeed, Wisconsin recognizes the same rule as Delaware, derived from U.S. Supreme Court precedent, that “when parties have previously agreed that litigation should be conducted in a particular forum, there is a strong presumption favoring venue in that forum, unless enforcement is shown to be unreasonable under the circumstances.”45 This case law would pose a significant challenge for plaintiffs to argue that exclusive-forum bylaws adopted by a board of directors are not a binding contract on the shareholders.

    To the extent a Wisconsin court would be inclined to limit an exclusive forum-selection bylaw, it would likely do so in the same manner as any other forum-selection clause. For instance, Wisconsin courts will not enforce a forum-selection clause that is unconscionable.46 Under Wisconsin law, unconscionability is “the absence of a meaningful choice on the part of one party, together with contract terms that are unreasonably favorable to the other party.”47 Exclusive-forum bylaws are thus unlikely to be unconscionable, at least under ordinary circumstances, because shareholders will have a meaningful choice in either buying or not buying the stock. Moreover, shareholders are empowered to repeal any bylaw by majority vote.48 Finally, exclusive-forum provisions often allow corporations to consent to an alternative forum, which a corporation might do in circumstances suggesting that enforcing the provision could be unconscionable.

    Wisconsin’s forum-selection cases further suggest that a corporation’s ability to adopt an exclusive-forum provision could be limited by Wisconsin’s “public policy” limits on contractual forum-selection clauses.49 Beilfuss, however, would appear to support an exclusive-forum bylaw favoring Wisconsin; in that case, the forum-selection clause, which designated Ohio as the forum for disputes, was deemed unreasonable because it conflicted with Wisconsin’s strong public policy relating to the covenant not to compete that was at the heart of the dispute.50

    Moreover, recent Wisconsin Supreme Court precedent strongly reinforces the importance of the business judgment rule in Wisconsin and cited as “policy” a desire to avoid “unnecessary, meritless litigation” against corporate directors.51

    Practical Considerations

    Though there has been a strong movement toward forum-selection bylaws nationally, only a relative handful of companies in Wisconsin, including Kohl’s Corp., Anchor BanCorp Wisconsin Inc., Joy Global Inc., and Roundy’s Inc., have adopted them. Of these, all except Kohl’s are Delaware corporations that have chosen Delaware as the forum for intra-corporate litigation. The Kohl’s bylaw selects Waukesha County or the U.S. District Court for the Eastern District of Wisconsin as the forum of choice:

    9.01. Exclusive Forum. Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee or agent of the Corporation to the Corporation or the Corporation’s shareholders, (iii) any action asserting a claim arising pursuant to any provision of the Wisconsin Business Corporation Law or the Corporation’s Articles of Incorporation or these Bylaws (as either may be amended from time to time), or (iv) any action asserting a claim governed by the internal affairs doctrine shall be the Circuit Court for Waukesha County, Wisconsin or U.S. District Court for the Eastern District of Wisconsin – Milwaukee Division, in all cases subject to such court’s having personal jurisdiction over the indispensable parties named as defendants. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Section 9.01.

    While this provision is similar to provisions adopted by Delaware corporations that have survived challenge, not all exclusive-forum provisions are the same. The Kohl’s provision, for example, allows the plaintiff to select between two courts; some provisions select the state court as the exclusive forum, allowing the federal forum only in the event that the state court lacks jurisdiction. Some provisions, like the Kohl’s provision, make explicit mention of notice having been given to shareholders when shares were purchased, to blunt claims such as those raised in Boilermakers.

    Other provisions go further and include language stating that any stockholder who has filed suit in any court other than the selected forum is deemed to have consented to personal jurisdiction in the state of the selected forum for purposes of enforcing the forum-selection provision. Corporations should consult experienced counsel to ensure that their goals and objectives are being met in an exclusive-forum provision that, at the same time, is likely to withstand challenge.

    Corporations considering exclusive-venue bylaws also would be well advised to keep an eye on the views of proxy advisory services. Some firms, such as Glass Lewis & Co. and Egan-Jones, have come out squarely against exclusive-forum bylaws, though Glass Lewis does not oppose those approved directly by shareholders. Another firm, Institutional Shareholder Services (ISS), believes that such provisions are not “automatically” adverse to shareholders but considers each provision on a case-by-case basis.

    Among the factors that ISS considers important are whether 1) the company has disclosed in a proxy statement that it has been materially harmed by shareholder litigation outside its jurisdiction of incorporation; and 2) the company has adopted what ISS considers to be good governance features, such as annual board elections, a majority-vote standard for uncontested board seats, and the absence of a board-adopted poison pill.

    Conclusion

    Although Wisconsin corporate law is not well developed, existing law suggests that exclusive-venue provisions setting Wisconsin as the required forum for intra-corporate lawsuits against Wisconsin companies and their officers and directors likely would survive scrutiny. The legal and practical arguments for exclusive-forum bylaws under Wisconsin law are much like those that have prevailed in Delaware and other jurisdictions. Legal clarity is found in a statutory structure, as well as supporting case law, that would allow exclusive-forum bylaws for Wisconsin corporations.

    Given the likelihood of continued shareholder suits, this should be welcome news for companies seeking to limit some of the costs associated with shareholder litigation and particularly those companies looking toward potential mergers or acquisitions.

    Endnotes

    1 While exclusive-forum provisions can be included in either the bylaws of a corporation or its initial corporate charter, most litigation around these provisions has concerned board-enacted bylaw provisions. This is primarily because exclusive-forum provisions enacted at the time of incorporation are viewed as more difficult to challenge than those enacted by a bylaw amendment in anticipation of litigation. See, e.g.,In re Facebook, Inc., 922 F. Supp. 2d 445, 463 (S.D.N.Y. 2013). This article focuses on exclusive-forum provisions in bylaws.

    2 See Notz v. Everett Smith Grp. Ltd., 2009 WI 30, 35, 316 Wis. 2d 640, 764 N.W.2d 904 (describing Delaware as “a jurisdiction to which Wisconsin courts often look for ‘guidance on corporate law’”) (citation omitted).

    3 These forums are the two that have been explicitly endorsed in court decisions. A company could arguably choose any forum where it had sufficient contacts to support personal jurisdiction, but the more tenuous the connection, the more likely a court is to refuse to enforce the choice. See City of Providence v. First Citizens BancShares Inc., 99 A.2d 229, 235 (Del. Ch. 2014) (holding that Delaware law does not “prohibit directors of a Delaware corporation from designating an exclusive forum other than Delaware”). As explained below, however, the Delaware Legislature recently passed a law that arguably overturns City of Providence in that it expressly authorizes forum-selection bylaws that require that claims be brought “in any or all of the courts in this State.”

    4 While suits challenging mergers and acquisitions are far more common in the case of public companies, they are sometimes brought against officers and directors of private companies. Private companies in fact face the same type of shareholder litigation covered by the exclusive-forum provisions. With a few exceptions not relevant here, Wis. Stat. chapter 180 does not distinguish between private and public companies. As a result, the analysis in this article applies to private companies as well as public companies.

    5 See Olga Koumrian, Recent Developments in Shareholder Litigation Involving Mergers and Acquisitions (2014).

    6 Id. The Koumrian report notes that, for the majority of the deals subject to litigation in 2014, suit was filed in just one jurisdiction, which presumably relates to the rise of exclusive-forum provisions.

    7 See, e.g., City of Plantation Police Officers Retirement Sys. v. Jeffries, No. 2:14-cv-01380 (S.D. Ohio Jan. 8, 2015) (challenging compensation of chief executive officer); Hong v. Su, CA No. 10392 (Del. Ch. Nov. 24, 2014) (alleging chief executive officer compensation violated executive compensation plan).

    8 See Data Key Partners v. Permira Advisers LLC, 2014 WI 86, ¶ 43, 356 Wis. 2d 665, 849 N.W.2d 693 (rejecting challenge to directors’ decision to sell company as protected by the business judgment rule).

    9 In re Revlon Inc. S’holders Litig., 990 A.2d 940, 960 (Del. Ch. 2010).

    10 Id.

    11 See Boilermakers Local 154 Ret. Fund v. Chevron Corp., 73 A.3d 934 (De. Ch. 2013); City of Providence, 99 A.3d 229.

    12 Boilermakers,73 A.3d at 938.

    13 Id. at 939 (citing 8 Del. C. § 109(b)).

    14 Id.

    15 Id. at 948 (internal quotation marks and quoting citation omitted).

    16 Id. at 951 (quoting Gow v. Consolidated Coppermines Corp., 165 A. 136, 140 (Del. Ch. 1933)).

    17 Id. at 951-52.

    18 Id. at 954.

    19 Id. at 955.

    20 Id.

    21 Id. at 955-56.

    22 Id. at 957.

    23 See City of Providence, 99 A.3d 229.

    24 Id. at 235.

    25 See, e.g., Hemg Inc. v. Aspen Univ., 2013 N.Y. Misc. LEXIS 5199 (N.Y. Sup. Ct. Nov. 4, 2013); Genoud v. Edgen Grp. Inc., No. 625,244, slip op. (La. Dist. Ct. Jan. 17, 2014); Miller v. Beam Inc., No. 2014 CH 00932 (Ill. Cir. Ct. March 5, 2014).

    26 Galaviz v. Berg, 763 F. Supp. 2d 1170 (N.D. Cal. 2011); Roberts v. TriQuint SemiConductor Inc., No. 1402-02441 (Ore. Cir. Ct. Aug. 14, 2014).

    27 763 F. Supp. 2d at 1174-75.

    28 Boilermakers, 73 A.3d at 956.

    29 See Groen v. Safeway Inc., No. RG14716641, slip op. at 1-2 (Super. Ct. Cal., Alameda Cnty., May 14, 2014); North v. McNamara, 2014 U.S. Dist. LEXIS 131672 (S.D. Ohio Sept. 19, 2014).

    30 8 Del. C. § 115 (effective Aug. 1, 2015). While the new law would appear to be at odds with the Court of Chancery’s decision in City of Providence, the notes to the Senate bill expressly state that the law “does not address the validity of a provision of the certificate of incorporation of bylaws that selects a forum other than Delaware courts as an additional forum in which internal corporate claims may be brought, but it invalidates such a provision selecting the courts in a different State, or an arbitral forum, if it would preclude litigating such claims in the Delaware courts.” Synopsis, Senate Bill 75 (April 29, 2015).

    31 Synopsis, Senate Bill 75 (April 29, 2015).

    32 See Revlon Inc. v. MacAndrews & Forbes Holdings Inc., 506 A.2d 173 (Del. 1986).

    33 See Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985).

    34 See Dixon v. Ladish Co., 785 F. Supp. 2d 746 (E.D. Wis. 2011), aff’d sub nom, Dixon v. ATI Ladish LLC, 667 F.3d 891, 895-96 (7th Cir. 2012).

    35 Wis. Stat. §§ 180.0206(1), 180.1020(1).

    36 Wis. Stat. § 180.0206(2).

    37 See 8 Del. C. § 109(b) (“The bylaws may contain any provision, not inconsistent with law or with the certificate of the incorporation, 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.”).

    38 Boilermakers,73 A.3d 934, 951.

    39 Shareholders of a Wisconsin corporation are presumed to have consented to the Wisconsin corporate law statutes when they purchased their stock, and they can be bound to the provisions as though they signed a contract. See Albert Trostel & Sons Co., 679 F.3d 627, 630 (7th Cir. 2012).

    40 Boilermakers,73 A.3d at 951-52 (holding that exclusive-forum bylaws “regulate 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”) (emphasis added).

    41 See Ewer v. Lake Arrowhead Ass’n, 2012 WI App 64, ¶ 45, 342 Wis. 2d 194, 817 N.W.2d 465 (citing Driver v. Driver, 119 Wis. 2d 65, 71, 349 N.W.2d 97 (Ct. App. 1984); see also State ex rel. Siciliano v. Johnson, 21 Wis. 2d 482, 487, 124 N.W.2d 624 (1963) (holding that “the principles which govern the construction of contracts also govern the construction and interpretation of corporate bylaws” under Wisconsin law).

    42 228 Wis. 566, 581, 280 N.W. 688 (1938). See also O’Leary v. Howard Young Med. Ctr. Inc., 89 Wis. 2d 156, 170, 278 N.W.2d 217 (Ct. App. 1979) (board’s right to amend bylaws without shareholder approval applies to “matters touching the administrative policies and affairs of the corporation, the relations of members and officers with the corporation and among themselves, and like matters of internal concern.”).

    43 Wis. Stat. § 180.1020(1).

    44 See Converting/Biophile Labs. Inc. v. Ludlow Composites Corp., 2006 WI App 187, ¶ 22, 296 Wis. 2d 273, 722 N.W.2d 633.

    45 Id. (citing Beilfuss v. Huffy Corp., 2004 WI App 118, ¶ 17, 274 Wis. 2d 500, 685 N.W.2d 373; M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 9-15 (1972)).

    46 Id.

    47 Leasefirst v. Hartford Rexall Drugs Inc., 168 Wis. 2d 83, 89, 483 N.W.2d 585 (Ct. App. 1992).

    48 See Wis. Stat. § 180.1020(2).

    49 See Beilfuss, 2004 WI App 118, ¶ 13, 274 Wis. 2d 500.

    50 Id. 18.

    51 See Data Key Partners, 2014 WI 86, ¶ 43, 356 Wis. 2d 665.




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