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An Introduction to the Law of Corporations: Cases and Materials, Fall 2017

Boilermakers Local 154 Retirement Fund And Key West Police & Fire Pension Fund, Plaintiffs, V. Chevron Corporation, Samuel H. Armacost, Linnet F. Deily, Robert E. Denham, Robert J. Eaton, Chuck Hagel, Enrique Hernandez, Jr., Franklyn G. Jenifer, George L. Kirkland, Sam Nunn, Donald B. Rice, Kevin W. Sharer, Charles R. Shoemate, John G. Stumpf, Ronald D. Sugar, Carl Ware, And John S. Watson, Defendants. Iclub Investment Partnership, Plaintiff, V. Fedex Corporation, James L. Barksdale, John A. Edw

In Boilermakers, the court answers the question whether directors can unilaterally adopt bylaws to restrict the rights of stockholders. The bylaw in question is an ‘exclusive forum provision' bylaw that purports to limit the rights of stockholders to bring certain kinds of litigation against the corporation and its board to courts in Delaware. Forum selection provisions are common in commercial contracts.

In this case, the board – and not the stockholders – adopted an exclusive forum bylaw. This case raises important questions about the ability of directors to act unilaterally in the context of corporate bylaws as well as the nature of the “corporate contract” that stockholders enter into when they purchase shares of any corporation.

This case also reviews the standards of review a court will apply to judicial challenges to bylaws as well as the typical subject matter appropriate for bylaws.