At the end of last year, a plaintiff filed a verified class action in the Delaware Court of Chancery seeking a judgment declaring invalid provisions included in the certificates of incorporation of three different companies "purporting to require any claim under the Securities Act of 1933 to be brought in federal court". Sciabacucchi v. Salzberg et al. Del. Ch. Case No. 2018-0931 (filed Dec. 29, 2017). The three companies are Blue Apron Holdings, Inc.; Stitch Fix, Inc.; and Roku, Inc. The plaintiff claims that these provisions "flaunt" the "careful compromises" effected by the General Assembly in Section 115 of the Delaware General Corporation Law. Interestingly, the plaintiff blames former Securities and Exchange Commissioner Joseph Grundfust for proposing a bylaw or charter provision limiting Securities Act claims to the federal district courts. Allegedly Professor Grundfest made this proposal in 2016 at a presentation at the Rock Center for Corporate Governance ("In the months that followed, a number of Delaware corporation leapt at the [Professor Grundfest's] suggestion . . .").
The plaintiff asserts "The Federal Forum Provisions are invalid under Delaware law because they purport to regulate a plaintiff's choice of venue in actions that do not assert internal corporate claims governed by Delaware law." This assertion is plainly wrong. The provisions quoted in the complaint purport to regulate a plaintiff's choice of forum, not venue. When parties choose a forum, they are choosing a tribunal (e.g., California Superior Court); when parties choose a venue, they are choosing the geographic location (e.g., Orange County, California). For a discussion of the validity of venue selection provisions in California, see Can Parties Choose Venue in California? and Court of Appeal Validates Contractual Choice of Venue.
"Forum" and "venue" are both derived from the Latin. "Forum" originally had the sense of a door, but came to refer to the public meeting spaces, such as the Forum in Rome (pictured below). "Venue" is derived from the Latin word meaning "to come" as in the Latin version of the Christmas carol, "Come, All Ye Faithful": "Adeste, fideles, Laeti triumphantes, Venite, venite in Bethlehem . . .".
