Seafarer Pension Plan v. Bradway

Dist. Ct. erred in granting defendants’ motion to dismiss plaintiff-shareholder’s derivative lawsuit on behalf of Boeing under section 14(a) of Securities Exchange Act, alleging that defendants-Boeing officers and board members made materially false and misleading public statements about development and operation of 737 Max airplane, where said airplane was involved in two major crashes that concerned airplane’s flight control system. Defendants based dismissal motion on doctrine of forum non conveniens, where Boeing bylaw required that any derivative lawsuit be filed in Court of Chancery of State of Delaware. Defendants could not invoke instant Bylaw, where: (1) enforcement of Bylaw would violate section 115 of Delaware General Corporation Law; (2) section 29(a) of Exchange Act provided for exclusive federal jurisdiction for plaintiff’s derivative action; and (3) U.S. Supreme Court in Mitsubishi, 473 U.S. 614, cautioned against using choice of forum and choice of law clauses to attempt prospective waivers of federal statutory remedies. Ct. rejected defendants’ contention that Delaware law offered sufficient substitute remedy that would allow plaintiff to vindicate any rights under Exchange Act. (Dissent filed.)