UNITED ATLANTIC VENTURES, LLC, v. TMTG SUB INC. f/k/a TRUMP MEDIA & TECHNOLOGY GROUP CORP., TRUMP MEDIA & TECHNOLOGY GROUP CORP f/k/a DIGITAL WORLD ACQUISITION CORP., DONALD J. TRUMP, DEVIN G. NUNES, DONALD J. TRUMP, JR., KASHYAP “KASH” PATEL, DANIEL SCAVINO, JR., ERIC SWIDER, FRANK J. ANDREWS, EDWARD J. PREBLE, and JEFFREY A. SMITH,
C.A. No. 2024-0184-LWW
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
September 2, 2025
WILL, Vice Chancellor
Date Submitted: May 15, 2025
Date Decided: September 2, 2025
Richard I. G. Jones, Jr., David B. Anthony & Harry W. Shenton IV, BERGER MCDERMOTT LLP, Wilmington, Delaware; Christopher Clark & Benjamin Dozier, CLARK SMITH VILLAZOR LLP, New York, New York; Counsel for Plaintiff United Atlantic Ventures, LLC
Theodore A. Kittila, M. Jane Brady, William E. Green, Jr. & John G. Harris, HALLORAN FARKAS + KITTILA LLP, Wilmington, Delaware; Counsel for Defendants TMTG Sub Inc. f/k/a Trump Media & Technology Group Corp., President Donald J. Trump, and Daniel Scavino, Jr.
WILL, Vice Chancellor
In February 2021, then-former President Donald J. Trump hired UAV to consult on TMTG‘s launch in exchange for an 8.6% stake in the company. UAV‘s primary task was to position TMTG to access public markets. To that end, UAV identified a special purpose acquisition company (SPAC), Digital World Acquisition Corp. (DWAC), as a merger partner. Under an October 2021 merger agreement, legacy TMTG stockholders like UAV would receive shares in the newly-public combined company as merger consideration.
The merger was mired by delays until mid-2023. In the interim, Trump and UAV had a falling out. Though UAV was no longer involved with TMTG‘s business, it retained TMTG shares. In early 2024, TMTG purportedly authorized the issuance of one billion additional shares. Believing that was an attempt to dilute it, UAV filed this lawsuit in February 2024. TMTG responded with its own lawsuit in Florida, seeking to have the services agreement declared void.
The same month, DWAC disclosed that amendments to its charter would impose a 180-day lock-up, restricting all legacy TMTG stockholders from selling their new public shares after the merger closed. The focus of this lawsuit then
The merger closed and UAV received restricted shares, prompting yet another amended pleading. The defendants moved to dismiss that third amended complaint. This decision resolves the defendants’ motions.
UAV‘s claims about the lock-up boil down to conspiracy theories unsupported by factual allegations. None are viable. DWAC‘s adoption of the lock-up by charter amendment before the combined company‘s shares were issued complied with Delaware statute. The restriction on target stockholders was neither unusual nor facially unreasonable in the de-SPAC merger context. And UAV pleads no facts suggesting that legacy TMTG‘s directors were involved in DWAC‘s adoption of the lock-up.
The two remaining claims about the services agreement are also dismissed, without prejudice. The services agreement has a Florida forum selection clause, and claims related to the agreement were first filed in Florida.
After briefing on the motions to dismiss was complete, the defendants moved for dismissal or a stay based on temporary presidential immunity following President Trump‘s reelection. Because UAV‘s complaint is dismissible on other grounds, I decline to reach the novel immunity question.
Unless otherwise noted, the following facts are drawn from the Third Amended Verified Complaint (the “Complaint“) and documents it incorporates by reference.1
A. The Services Agreement
Plaintiff United Atlantic Ventures, LLC (UAV) is a Delaware limited liability company with its principal place of business in Fort Lauderdale, Florida.2 In February 2021, then-former President Donald J. Trump and Trump Media LLC signed a Services Agreement with UAV, under which UAV would help establish Trump Media Group Corp. (“Legacy TMTG“).3 Trump signed on behalf of himself and Trump Media. Andy Litinsky, a UAV member, signed for UAV.4
UAV was to form Legacy TMTG as a Delaware corporation.5 UAV would provide consulting services on “targeted media and technology opportunities in social media, internet infrastructure, podcast, digital streaming, mobile apps, book
The Services Agreement confirmed that “[t]he parties’ primary goal [was] to position [Legacy TMTG] to access any of the private equity or public and private equity capital markets . . . [including through] a business combination with a [SPAC].”8 It granted UAV “a perpetual and exclusive right to plan, coordinate, and finalize a [de-SPAC] transaction.”9
The Services Agreement contemplated that Legacy TMTG would be formed with 100 million authorized shares of common stock.10 The shares were to be allocated among three stockholders: 90 million shares (90%) to Trump; 8.6 million shares (8.6%) to UAV; and 1.4 million shares (1.4%) to Bradford Cohen, an attorney who advised Trump on the Services Agreement.11 UAV‘s shares served as
UAV “set about forming [Legacy] TMTG and executing the business plan it had developed for [Legacy TMTG].”14
B. Legacy TMTG‘s Formation
On February 8, 2021, Legacy TMTG filed a certificate of incorporation in Delaware.15 It authorized the issuance of 11,000 shares of common stock, rather than the 100 million shares contemplated by the Services Agreement.16 It did not impose any restrictions on the shares.17
In June 2021, Legacy TMTG‘s three stockholders—Trump, UAV, and Cohen—passed several formative resolutions by unanimous written consent.18 They ratified and approved Legacy TMTG‘s certificate of incorporation, set the number of directors on Legacy TMTG‘s Board of Directors at three, and appointed Trump
The resolutions permitted the Authorized Officers to “sell and issue” 10,000 shares of Legacy TMTG common stock, with 9,000 shares (90%) to Trump, 860 shares (8.6%) to UAV, and 140 shares (1.4%) to Cohen.21
C. The October 2021 Resolutions
The next month, on July 30, 2021, The Trump Organization‘s Chief Legal Officer told Legacy TMTG‘s corporate counsel by email that the Services Agreement “was simply not what [Trump and Trump Media] understood they were agreeing to and that the actual terms of [the Services Agreement] had never been adequately explained to them prior to signing.”22 The email, and an attached letter from Eric Trump, purported to declare the Services Agreement and any related agreements “void ab initio.”23
D. The Merger Agreement
On October 20, 2021, Legacy TMTG entered an Agreement and Plan of Merger (the “Merger Agreement“) with Digital World Acquisition Corp. (DWAC), a SPAC.26 The parties agreed that DWAC would combine with Legacy TMTG, bringing Legacy TMTG‘s business public as Trump Media & Technology Group Corp. (“New TMTG“).27
The Merger Agreement stated that “[a]s consideration for the [m]erger,” DWAC would amend its certificate of incorporation “in a form to be mutually agreed between [DWAC] and [Legacy TMTG].”28 The amendment would occur “upon the Effective Time,” defined as the time “the Certificate of Merger [was filed] . . . with
The Merger Agreement also provided that all issued and outstanding shares of Legacy TMTG stock would be canceled at the Effective Time “in exchange for the right to receive the [s]tockholder [m]erger [c]onsideration,” meaning the total DWAC shares payable to Legacy TMTG stockholders.30 Legacy TMTG‘s stockholders—UAV, Trump, and Cohen—would be entitled to receive their pro rata merger consideration “upon delivery of the [t]ransmittal [d]ocuments” to the transfer agent.31 DWAC was obligated to deposit the merger consideration with the transfer agent “[a]t or prior to the Effective Time.”32
The Merger Agreement imposed a contractual lock-up on “Significant Company Holders“—those holding at least 10% of Legacy TMTG‘s issued and outstanding shares.33 Any Significant Company Holder would enter into a lock-up agreement with DWAC, the form of which was Exhibit B to the Merger
E. The Amended Merger Agreement
The merger was delayed by, among other things, a Securities and Exchange Commission (SEC) investigation.38 It was “placed back on track” in mid to late 2023.39
Meanwhile, in March 2022, Trump allegedly asked Litinsky to transfer a portion of UAV‘s Legacy TMTG stock to his spouse, Melania Trump.40 When Litinsky refused, Trump purportedly directed Devin Nunes—then Legacy TMTG‘s
At some point, Nunes, Kashyap “Kash” Patel, Daniel Scavino, Jr., and Donald J. Trump, Jr. served as directors of Legacy TMTG.43
On August 9, 2023, DWAC and Legacy TMTG amended the Merger Agreement.44 The amendment granted Trump high vote common stock representing 55% of New TMTG‘s voting power.45 The amendment did not contemplate additional lock-ups or restrictions on the sale or trading of New TMTG stock after closing.46
On January 18, 2024, UAV advised DWAC that its December 2023 Form S-4 Registration Statement omitted to mention UAV‘s rights under the Services Agreement.47 Four days later, on January 22, DWAC filed an amended Form S-4 stating that the Services Agreement had been “declared void nearly two and a half years previously” by The Trump Organization.48 Also on January 22, Legacy TMTG stockholder Cohen served a
On January 26—eight days after UAV‘s letter and four days after Cohen‘s
DWAC filed additional amendments to its Registration Statement with the SEC.52 In its fourth amended Registration Statement dated February 12, “DWAC disclosed that it would adopt post-[m]erger charter amendments to lock-up certain stock” (the “Lock-Up“).53 DWAC‘s charter would be amended to:
include Lock-Up Trading Restrictions, which shall apply to holders who received New Digital World common stock in exchange for their [Legacy] TMTG common stock, but excluding shares of New Digital World common stock issued to holders of [Legacy] TMTG common stock, which were issued by [Legacy] TMTG prior to the Closing in exchange for their TMTG Convertible Notes.54
DWAC‘s proposed amended charter was attached (the “Second Amended Charter“).55
H. The Delaware Litigation
On February 29, 2024, UAV filed this action against Legacy TMTG.57 It sought declarations that (a) it owned 8.6% of Legacy TMTG‘s issued and outstanding stock; (b) the authorization of the one billion shares in Legacy TMTG‘s third amended certificate of incorporation was invalid; and (c) UAV maintained an anti-dilution right under the Services Agreement.58 It also sought related injunctive relief.59
UAV amended its complaint a week later.60 It added individual defendants Trump, Nunes, Trump, Jr., Patel, and Scavino, Jr.—each in their capacities as Legacy TMTG directors.61 UAV claimed that those individuals breached their fiduciary duties regarding the purported “dilution scheme.”62
On March 22, 2024, DWAC‘s stockholders approved the business combination with Legacy TMTG.63 They also voted to adopt the Second Amended Charter, including the Lock-Up.64
The Second Amended Charter states that “the Locked-up Holders may not Transfer any Lock-up Shares until the end of the Lock-up Period.”65 “Lock-up Shares” are “the shares of capital stock [] of [New TMTG] received by the stockholders of [Legacy] TMTG, excluding[] shares of capital stock of [New TMTG] issued in exchange for [Legacy] TMTG shares that were issued by [Legacy] TMTG to holders of Company Convertible Notes.”66 “Locked-up Holders” are “the holders of Lock-up Shares.”67
J. UAV‘s Restricted Shares
UAV promptly sent its letter of transmittal to New TMTG‘s transfer agent, entitling it to merger consideration.70 On March 28, UAV learned that it owned 7,472,141 restricted shares of New TMTG stock.71 The shares were “subject to the limitations on transfer and lock-up restrictions described in section 4.8 of the [Second Amended Charter].”72
K. The Florida and Delaware Litigation
On March 24—the night before the merger with DWAC closed—New TMTG sued UAV, UAV members Litinsky and Moss, and DWAC‘s former director and officer Patrick Orlando in the Circuit Court for the Twelfth Judicial Circuit in and for Sarasota County, Florida Civil Division (the “Sarasota Action“).73 New TMTG sought “(1) a declaration that UAV has no contractual rights to appoint members of
The Sarasota Action promoted activity in the Delaware suit. On April 2, UAV moved for leave to file a second amended complaint in this court, which was granted.75 UAV‘s second amended complaint added claims about the Lock-Up imposed by New TMTG‘s Second Amended Charter.76 It also named five new defendants: New TMTG, Eric Swider (a former DWAC and current New TMTG director), and three other New TMTG Directors.77
The Sarasota Action was stayed on June 27 in deference to this action.78 New TMTG and Legacy TMTG then filed another lawsuit in Sarasota (the “Second Sarasota Action“) that was assigned to a different Florida judge.79 Their allegations
Back in Delaware, UAV sought leave to file a third amended complaint, which was unopposed.83 That operative Complaint was filed on July 9, 2024. UAV expanded its allegations about the Lock-Up and breaches of fiduciary duty, and added claims for aiding and abetting breaches of fiduciary duty and civil conspiracy. It also dropped certain New TMTG directors as defendants,84 replacing them with three former DWAC directors: Orlando (who was later dismissed from the suit), Frank J. Andrews, Edward J. Preble, and Jeffrey A. Smith.85
While briefing was underway, Trump was reelected to his second term as President of the United States, taking office on January 20, 2025.89 A few days later, the defendants moved for a stay on the basis of temporary presidential immunity.90 On May 15, after the immunity motion was fully briefed,91 oral argument was presented on both sets of motions.92 The motions were taken under advisement.
UAV‘s Complaint advances eight counts. The first five counts concern the Lock-Up, with theories ranging from violations of the Delaware General Corporation Law (DGCL) to breach of fiduciary duty and conspiracy. The sixth and seventh counts concern the validity and enforceability of the Services Agreement. And the eighth count seeks an anti-suit injunction of the Sarasota Action.
The defendants move for the dismissal of all counts on various grounds. They assert that UAV states no claim on which relief can be granted under
In the alternative, the defendants ask that I dismiss or stay this case while President Trump remains in office. “[I]mmunity questions should be decided at the earliest possible stage of the litigation.”93 Still, “[a] fundamental and longstanding principle of judicial restraint requires that courts avoid reaching constitutional questions in advance of the necessity of deciding them.”94 In keeping with that wise
As such, I first address the
None of UAV‘s claims survive. I therefore decline to address the issue of presidential immunity.97
A. Claims Regarding the Lock-Up
UAV brings six claims regarding the Lock-Up. Count I is a claim against New TMTG that the Lock-Up violates
The defendants have moved to dismiss these claims under
In Count I, UAV claims that the Lock-Up in the Second Amended Charter is invalid for failure to comply with Delaware law.105
A restriction on the transfer or registration of transfer of securities of a corporation, or on the amount of a corporation‘s securities that may be owned by any person or group of persons, may be imposed by the certificate of incorporation or by the bylaws or by an agreement among any number of security holders or among such holders and the corporation. No restrictions so imposed shall be binding with respect to securities issued prior to the adoption of the restriction unless the holders of the securities are parties to an agreement or voted in favor of the restriction.106
Restrictions on the transfer of stock must also be “reasonable to achieve a legitimate business purpose,” given the “traditional judicial policy favoring the free transfer of securities.”107
UAV maintains that the Lock-Up violates Delaware law in two ways. First, the Lock-Up allegedly contravenes “the strict statutory requirements of [Section] 202.”108 Second, even if
a. Section 202(b)‘s Requirements
UAV asserts that its New TMTG stock was issued before the Lock-Up was adopted.111 Its argument is as follows. Under the Merger Agreement, all shares of Legacy TMTG stock were canceled at the Effective Time and Legacy TMTG stockholders gained the right to a pro rata share of New TMTG stock worth $875 million.112 The Effective Time was when the Certificate of Merger was filed with the Delaware Secretary of State, at 8:19 a.m. on March 25, 2024.113 The Merger Agreement provides that at or before the Effective Time, New TMTG would deposit
The defendants argue that UAV‘s position is baseless for two reasons. First, it improperly conflates the effectiveness and adoption of the Second Amended Charter.115 And second, it is “based on a false distinction between when [UAV] thinks it was issued its shares” (at the Effective Time) and “when it was actually issued its shares” (after the Second Amended Charter was filed).116 I agree.
The defendants’ interpretation of
i. The Meaning of “Adoption”
“It is axiomatic that a statute or an ordinance is to be interpreted according to its plain and ordinary meaning.”118 “Where a statute contains unambiguous language that clearly reflects the intent of the legislature, then the language of the statute controls.”119 Undefined terms “must be given their ordinary, common meaning,” and should not be “constructed as surplusage if there is a reasonable construction which will give them meaning.”120
In
The words surrounding “adoption” in
UAV‘s argument therefore finds no support in the text of
ii. UAV‘s Misguided Focus on Effectiveness
UAV further submits that “under Delaware law, a charter amendment is not enforceable against a shareholder until it becomes effective, which occurs upon filing with the Secretary of State.”132 That point is uncontroversial.133 It is also irrelevant.
A charter amendment‘s adoption is distinct from its effectiveness upon filing.134 An amended certificate of incorporation must be adopted before it can be lawfully filed.135 Here, the Second Amended Charter became effective on March 25 when it was filed with the Secretary of State, which was three days after its adoption.
UAV‘s misdirection is not salvaged by the precedent it relies on. The cited cases concern a charter amendment‘s effectiveness or enforceability.136 None address the adoption of a charter amendment for purposes of
During the three days between its approval by stockholders (March 22) and its filing (March 25), the Second Amended Charter was ineffective. It became effective once it was filed with the Secretary of State. But it was necessarily adopted before then.140
In addition to compliance with
UAV submits that the Lock-Up should be struck down as “unreasonable, manifestly unjust, and serv[ing] no legitimate business purpose.”145 As the party with the burden of proving the Lock-Up‘s unreasonableness, it faces a formidable challenge.146 The reasonableness inquiry is one “broadly deferential” to the corporation, and the court must avoid “excessively scrutiniz[ing] the reasonableness of the restriction.”147
The allegations in the Complaint are insufficient to meet this standard. UAV does not assert that the Lock-Up was unreasonable as a general matter. Rather, it accepts that transfer restrictions were warranted for some Legacy TMTG stockholders, such as Trump and current Legacy TMTG insiders. UAV merely insists that the Lock-Up was a “bad faith” act of retaliation against it and Cohen.151
UAV suggests that the Lock-Up served no legitimate purpose because its “practical effect” was to restrict Legacy TMTG‘s minority stockholders.152 The
UAV‘s theory misapprehends the nature of the reasonableness inquiry. Under Delaware law, transfer restrictions “need not be the least restrictive alternative that the board could adopt. They need only be reasonable.”155 The court‘s inquiry is not whether a restriction is reasonable as applied to a specific stockholder, but whether it is facially reasonable to achieve a legitimate corporate purpose.156
When target stockholders receive the combined company‘s publicly traded shares at a low-cost basis, they may sell immediately after closing to realize a quick
The Lock-Up here bears an obvious relation to such purposes. It prevented “Locked-Up Holders“—all Legacy TMTG stockholders—from transferring the New TMTG shares they received as merger consideration for six months after closing.161 The fourth amended Registration Statement explained that locking up certain Legacy TMTG stockholders “would provide important stability to the
Even so, UAV asks that I look beneath the veneer of reasonableness to assess whether malintent prompted the Lock-Up. It cites no basis in our law to inject a good faith analysis into the review of a transfer restriction‘s facial reasonableness.163 Even if there were, UAV cannot avoid the reality that DWAC—not Legacy TMTG—is the entity that amended its charter to enact the Lock-Up. There is not a single fact pleaded to suggest that DWAC undertook the Lock-Up for an illicit motive.164 Nor are there any well-pleaded allegations that Legacy TMTG and its directors caused DWAC to adopt the Lock-Up.165
2. Section 151
In Count II, UAV avers that if I conclude the Lock-Up “was adopted prior to UAV[‘s] shares being issued, the [] Lock-Up as imposed on UAV‘s shares violates
Every corporation may issue 1 or more classes of stock or 1 or more series of stock within any class thereof, any or all of which classes may be of stock with par value or stock without par value and which classes or series may have such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the certificate of incorporation or of any amendment thereto, or in the resolution or resolutions providing for the issue of such stock adopted by the board of directors pursuant to authority expressly vested in it by the provisions of its certificate of incorporation.168
As with its Section 202 claim, UAV‘s reading of
“Issue” means to “emit,” “send out,” or put stock in “circulation.”171 To be deemed issued, stock must “not only pass[] from the custody and control of the
The transfer agent did not—and could not—issue shares to UAV in the three-minute window between the filing of the Certificate of Merger (i.e., the Effective Time) and of the Second Amended Complaint. The post-merger shares were issued after the Second Amended Charter, which “stated and expressed” the Lock-Up, was filed.174 And whatever the timing, UAV‘s shares were issued with a restrictive legend reflecting the Lock-Up.175
Because the Lock-Up was in the Second Amended Charter when UAV received its restricted stock, Count II is dismissed.
3. Breach of Fiduciary Duty
There are multiple problems with this claim, including the failure to plead its most basic elements: (1) a fiduciary relationship and (2) a breach of the fiduciary‘s duty.179 The DWAC Board owed no fiduciary duty to UAV when the Lock-Up was adopted. As for the Legacy TMTG Board that owed duties to UAV, the Complaint does not mention a single action taken in connection with the Lock-Up.
First, when the Lock-Up was disclosed in DWAC‘s Registration Statement and adopted, UAV was a stockholder of Legacy TMTG. The Legacy TMTG Board
UAV‘s duty of loyalty claim rests on an untenable leap. From a general Merger Agreement clause requiring the parties to “mutually agree[]” on an amended charter,182 UAV asks me to infer a multi-step scheme in which Legacy TMTG‘s Board proposed the Lock-Up to harm UAV and DWAC‘s Board agreed to it at Legacy TMTG‘s request. The Complaint is devoid of facts to support this narrative.183 UAV not only neglects to identify the directors who allegedly acted disloyally, but also cites no action by any director that could constitute a breach.184 It does not even allege that Legacy TMTG and DWAC agreed to the Second Amended Charter.
4. Aiding and Abetting
Count IV is an aiding and abetting claim against the members of DWAC‘s Board and New TMTG. To state a claim for aiding and abetting a breach of fiduciary duty, a plaintiff must allege “(1) the existence of a fiduciary relationship, (2) a breach of the fiduciary‘s duty, . . . (3) knowing participation in that breach by the defendants, and (4) damages proximately caused by the breach.”186
UAV alleges that “[w]ith knowledge of the fiduciary duties owed by the [Legacy] TMTG Board to UAV, New TMTG and [the DWAC directors] actively participated in and aided and abetted breaches of fiduciary duty by the [Legacy] TMTG Board by, among other things, agreeing with [Legacy] TMTG to impose the [] Lock-Up on UAV.”187 The claim fails for lack of an underlying breach. As discussed above, UAV has not demonstrated that the members of Legacy TMTG‘s
5. Civil Conspiracy
Count V is a civil conspiracy claim that, like the fiduciary duty and aiding and abetting claims, stems from the imposition of the Lock-Up. A civil conspiracy claim requires “(1) a confederation or combination of two or more persons; (2) an unlawful act done in furtherance of the conspiracy; and (3) actual damage.”188 “[I]n the absence of an actionable wrong, a civil conspiracy claim will fail.”189
UAV alleges that “[Legacy] TMTG, New TMTG, and their respective directors . . . entered into a confederation and conspired with one another to impose [the Lock-Up] in violation of Sections 202 and 151 of the DGCL and Delaware law.”190 In its brief, UAV explains that its civil conspiracy claim “relies on the same factual allegations underlying its aiding and abetting” claim.191 But I have rejected UAV‘s claims under the DGCL and for breach of fiduciary duty. Without an
B. Claims Regarding the Services Agreement
UAV‘s final claims are for declaratory judgments related to the Services Agreement. Count VI seeks a declaration that “Old TMTG approved and ratified the Services Agreement” such that “New TMTG is now estopped from claiming that the Services Agreement is void and unenforceable.”193 Count VII seeks a declaration that the Services Agreement remains valid and enforceable despite The Trump Organization‘s statement that it was void.194
I dismiss those claims without prejudice for two reasons. First, a forum selection clause in the Services Agreement requires that the claims be brought in Palm Beach County, Florida. Second, the claims are better addressed in the pending Sarasota Action.
1. Dismissal for Improper Venue
a. The Forum Selection Clause
“When a contract contains a forum selection clause, this court will interpret the forum selection clause in accordance with the law chosen to govern the contract.”199 “Delaware courts will generally honor a contractually-designated
The Services Agreement is governed by Florida law.202 Each of the signatories to the Services Agreement listed Florida addresses as their residences.203 The entity that the Services Agreement contemplated forming—TMTG—is headquartered in Sarasota, Florida.204 The Services Agreement therefore has a material relationship to Florida.
As in Delaware, “Florida courts recognize the right of contracting parties to select and agree on a forum in which to resolve future disputes.”205 Forum selection clauses are presumptively valid, unless the challenging party can show that
Enforcement often hinges on whether the forum selection clause‘s terms are mandatory or permissive. The forum selection provision clause at issue here states that “any” disputes about the Services Agreement “shall” be resolved in Florida:
Any dispute arising from or relating to this Agreement shall be resolved in the federal courts of the United States of America for the Southern District of Florida or the courts of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida and all parties hereby expressly and irrevocably consent to the personal jurisdiction and venue of such courts.208
“[F]orum selection clauses which state or clearly indicate that any litigation must or shall be initiated in a specified forum are mandatory.”209
b. Waiver
UAV does not assert that the forum selection clause resulted from fraud or deceit, would contravene a significant public policy of Florida (or Delaware), or would deprive it of its day in court if enforced.210 It instead maintains that the clause was waived when Legacy TMTG filed the Sarasota Action, claiming that UAV lacked enforceable rights under the Services Agreement. Sarasota, Florida is not in Palm Beach County—the venue selected by the forum selection clause. But Legacy TMTG, which filed the Sarasota Action, is not a party to the Services Agreement.
Even if Legacy TMTG could be viewed as so closely related to the Services Agreement that it foresaw being bound by the forum clause,211 Trump may enforce
UAV insists that Trump should be deemed to have waived the clause because he “controls” Legacy TMTG and must have consented to the filing of the Sarasota Action.213 It cites no authority for the notion that a company‘s actions bind its controlling stockholder for purposes of waiving a forum selection clause.214 Legacy TMTG is a distinct legal person from its owners.215
* * *
The Services Agreement, to which UAV and Trump are parties, contains a mandatory forum selection clause. Legacy TMTG‘s filing of the Sarasota Action
2. Dismissal in Deference to Florida
The defendants also request the dismissal or stay of this action in favor of the Sarasota Action, citing the McWane doctrine.216 Under McWane, this court may exercise its discretion to stay an action “when there is a prior action pending elsewhere, in a court capable of doing prompt and complete justice, involving the same parties and the same issues.”217 “If the foreign action is not ‘first-filed,’ the Court will pursue an inquiry ‘akin to a forum non conveniens analysis.‘”218
When this action was filed on February 29, 2024, UAV did not sue on the Services Agreement.219 Old TMTG then filed the Sarasota Action on March 24, 2024.220 Weeks later, on April 11, UAV filed its Second Amended Complaint, which raised the Services Agreement for the first time in Delaware.221
Under McWane, “Delaware courts should exercise discretion in favor of a stay where a prior action, involving the same parties and issues, is pending elsewhere in a court capable of doing prompt and complete justice.”225 The Sarasota Action is a prior action regarding the Services Agreement. It involves UAV‘s purported rights under the Services Agreement—the same issues raised in Counts VI and VII here.
UAV does not dispute that deference to the Sarasota Action is appropriate under McWane. It argues that it would be “disorderly, inefficient, and inconsistent with principles of comity, the underlying policy of McWane, to send this dispute back to Florida” when the Sarasota Action was stayed in deference to Delaware.227 Circumstances were different, though, when the Florida court stayed the Sarasota Action. This case was proceeding apace, with several claims expedited.228
The current situation is quite different. The gravamen of this case is about the Lock-Up. Each of UAV‘s claims about the Lock-Up are dismissed for failure to state a claim. Only two claims about the Services Agreement remain to be resolved.229 In the Sarasota Action, there are multiple causes of action focused on the validity of the Services Agreement.
There is no compelling reason for UAV‘s claims about the Services Agreement to proceed here rather than in Florida. The Florida court has a strong
The outcome is the same under the Cryo-Maid test.230 The relative ease of access to proof and compulsory process for witnesses favor Florida, where most of the relevant parties are located. Practical matters also favor Florida since most of the evidence and persons with knowledge are likely located there. The applicable law likewise favors Florida, since Florida law governs the Services Agreement. And the Sarasota Action is already pending; it is merely stayed.
Accordingly, Counts VI and VII are appropriately dismissed without prejudice in deference to the Sarasota Action.
III. CONCLUSION
Counts I through V are dismissed with prejudice under Rule 12(b)(6) for failure to state a claim. Counts VI and VII are dismissed without prejudice under Rule 12(b)(3) due to the forum selection clause in the Services Agreement and,
The Complaint is therefore dismissed in its entirety.