## Facts

- Three Delaware corporations (Blue Apron Holdings, Inc.; Stitch Fix, Inc.; and Roku, Inc.) adopted certificate provisions before their 2017 IPOs requiring Securities Act of 1933 claims to be filed exclusively in federal court (“federal-forum provisions” or “FFPs”).
- A stock purchaser who bought shares in or traceable to the IPOs filed a Delaware Court of Chancery action seeking a declaration that the FFPs were invalid under Delaware law.
- The plaintiff argued Delaware charters may regulate only internal corporate matters, while Securities Act claims are external, federal statutory claims by purchasers.
- The Court of Chancery held the FFPs facially invalid, reasoning corporate constitutive documents cannot bind a plaintiff to a forum for claims not based on rights or relationships created by Delaware corporate law.
- The corporations and directors appealed to the Delaware Supreme Court, which considered whether the FFPs could survive a facial challenge under Delaware law.

## Issues

1. Whether DGCL § 102(b)(1) permits a Delaware certificate of incorporation to require Securities Act of 1933 claims to be brought exclusively in federal court.
2. Whether Securities Act claims connected to IPO disclosures fall within a charter-regulable category tied to the corporation–stockholder (or investor) relationship rather than being purely external claims.
3. Whether, under the facial-challenge standard, FFPs are invalid in all or virtually all applications.

## Decision

- The Delaware Supreme Court (en banc) reversed the Court of Chancery.
- The Court held FFPs in certificates of incorporation are facially valid under DGCL § 102(b)(1).
- The Court concluded Securities Act IPO disclosure claims occupy a middle category: not classic internal-affairs claims, but sufficiently connected to intra-corporate conduct and the corporation–investor relationship to fall within § 102(b)(1).
- The Court emphasized the ruling addressed only facial validity; as-applied challenges remained available.
- The Court did not decide enforceability under federal law or in other jurisdictions.

## Legal Principles

- DGCL § 102(b)(1) authorizes charter provisions that, if not contrary to Delaware law, regulate stockholder powers and the forum for stockholder claims tied to the corporate enterprise.
- Delaware law does not require a strict internal-versus-external dichotomy; some claims governed by non-Delaware law may still be sufficiently intra-corporate to be regulated in the charter.
- Securities Act claims based on IPO disclosures and the issuance of shares are connected to internal corporate conduct and the corporation–investor relationship, supporting charter-based forum selection.
- A certificate of incorporation functions as a contract among the corporation and stockholders; purchasers are deemed to assent to charter terms upon acquiring shares, subject to limits imposed by law.
- Facial validity does not foreclose as-applied challenges alleging unreasonableness or an insufficient connection between the regulated claim and the corporation–stockholder relationship.

## Conclusion

The Delaware Supreme Court held that federal-forum provisions in Delaware corporate charters, directing Securities Act of 1933 claims to federal court, fall within DGCL § 102(b)(1) and are facially valid, while leaving enforceability and as-applied objections for future disputes.


Salzberg v. Sciabacucchi, 227 A.3d 102 (Del. 2020)