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Forum Selection By Law - Whether a Board-Adopted Forum Selection Bylaw Choosing North Carolina Courts as the Forum Should be Upheld by the Court of Chancery of Delaware
In City of Providence v. First Citizens Bancshares, Inc., the defendant, First Citizens Bancshares, a Delaware corporation (“FC North”), is a bank holding company headquartered in North Carolina that proposed to acquire by merger a bank holding company based in South Carolina, First Citizens Bancorporation, Inc., a South Carolina corporation (“FC South”). On the same day as the proposed merger was announced, the board of directors of FC North (the “Board”) made various revisions to the corporate bylaws, one of which was the addition of a forum selection bylaw (the “Forum Selection Bylaw”). In FC North’s corporate charter, the Board was given the power to make, adopt, or change the bylaws. After the revisions, the new bylaw designated as the forum for intra-corporate disputes “the United States District Court for the Eastern District of North Carolina, or, if that court lacks jurisdiction, any North Carolina state court with jurisdictionFalse” The Forum Selection Bylaw is identical to the one found facially valid in Boilermakers Local 154 Retirement Fund v. Chevron Corporation (“Chevron”), except that the Forum Selection Bylaw designates a court other than the state or federal courts of Delaware.