Drulias

Drulias v. 1ST Century Bancshares, Inc.

Good Law
241 Cal. Rptr. 3d 843·30 Cal. App. 5th 696
Court of Appeal of CaliforniaDecember 21, 2018H045049California6,014 words

Opinion

Lead Opinion

Elia, J.

*699 This appeal raises the issue of whether a forum selection bylaw adopted by a Delaware corporation without stockholder consent is enforceable in California. The trial court concluded the bylaw was enforceable and, accordingly, stayed this putative shareholder class action under Code of Civil Procedure section 410.30. 1 On appeal, plaintiff and appellant Dean Drulias contends the trial court erred in enforcing the forum selection bylaw, which designates Delaware as the exclusive litigation forum for intra-corporate disputes. He maintains the bylaw conflicts with California law and, alternatively, that its enforcement is unreasonable given the manner and timing of its adoption and defendants' litigation conduct below. Finding those contentions unpersuasive, we affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

1st Century Bancshares, Inc. (1st Century) was a Delaware corporation headquartered in Los Angeles, California, whose shares were publicly traded *700 on the NASDAQ. On March 10, 2016, 1st Century and Midland Financial Co. (Midland) announced plans to merge. The merger agreement called for Midland to acquire 1st Century for $11.22 in cash per share, a 36.3 percent premium over…

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