Remigius G. Shatas v. Andrew M. Snyder
73716-3
| Wash. Ct. App. | Oct 17, 2016Background
- Shatas, a Blucora shareholder, filed a verified derivative suit in King County Superior Court against Snyder and related entities for insider trading breach of fiduciary duty.
- Blucora's bylaws designate Delaware courts as the exclusive forum for intra-corporate matters unless the corporation consents in writing to another forum or Delaware lacks personal jurisdiction over indispensable defendants.
- Shatas argued King County was proper because Blucora consented in writing to that forum and because Delaware lacked jurisdiction over CIG, an indispensable party.
- The trial court dismissed for improper venue, conditioning dismissal on CIG consenting to Delaware jurisdiction, and Shatas appealed.
- Shatas challenged the trial court’s handling of consent and jurisdiction issues and asked the appellate court to remand for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Delaware is proper forum under the bylaws forum clause. | Shatas contends Blucora consented in writing to King County. | Blucora argues Delaware is the exclusive forum absent consent or lack of personal jurisdiction over indispensable parties. | Delaware forum applies unless consent or lack of jurisdiction. |
| Whether Blucora consented in writing to King County for this action. | Consent is shown by August 2011 agreements. | Consent must be tied to the fiduciary-duty action; the agreements do not govern this claim. | No written consent to King County for this action. |
| Whether Delaware has personal jurisdiction over indispensable party CIG at filing. | Delaware did not have jurisdiction over CIG at filing; postfiling consent is irrelevant. | Postfiling consent creates jurisdiction. | Postfiling consent cannot establish jurisdiction; remand needed for jurisdiction analysis. |
Key Cases Cited
- Parfi Holding AB v. Mirror Image Internet, Inc., 817 A.2d 149 (Del. 2002) (fiduciary-duty claims not barred by arbitration/forum clauses when not based on contract rights)
- Elf Atochem North America, Inc. v. Jaffari, 727 A.2d 286 (Del. 1998) (fiduciary claims tied to governance in an agreement fall within forum/arbitration clauses)
- OTK Assocs., LLC v. Friedman, 85 A.3d 696 (Del. 2014) (arises from fiduciary duties within an affiliated governance structure)
- Worden v. Smith, 178 Wn. App. 309 (Wash. Ct. App. 2013) (postfiling consent cannot alone defeat lack of jurisdiction)
- Parfi Holding AB v. Mirror Image Internet, Inc., 817 A.2d 149 (Del. 2002) (see above (repeat for emphasis))
- Central States, Se. and Sw. Areas Pension Fund v. Phencorp Reinsurance Co., Inc., 440 F.3d 870 (7th Cir. 2006) (normal jurisdiction date controls)