New decision out from a California appellate court enforcing Rivian’s charter provision requiring that federal Securities Act cases be brought in federal, rather than state, court.

I realize the ship has pretty much sailed on this issue, but I wrote a whole paper about why this trend is problematic both from a doctrinal and a policy perspective.

My issue doctrinally, of course, is that I do not think charters are contracts, and I also believe the question of contract formation is not part of the internal affairs doctrine, and therefore is not dependent on the law of the chartering state. On that latter point, at least, Delaware agrees with me; in Salzberg v. Sciabacucchi, the Delaware Supreme Court conceded that forum provisions governing federal law claims are not, strictly, governed by the internal affairs doctrine, although the court argued that other states should respect them nonetheless.

These doctrinal points, however, tend to be lost when the issue reaches non-Delaware courts, and Bullock v. Rivian is no exception. There, the California court not only situated the dispute squarely within the internal affairs doctrine, but also assumed that charter-based forum provisions are in fact contractual agreements, without even attempting to ask whether the basic elements of contract formation (offer, acceptance, consideration) were met.

And to bring everything back to DExit, of course, I believe at least some of this kind of unconsidered deference is at least partly the product of a baseline assumptions regarding Delaware’s fairness and expertise in corporate matters. What happens when that baseline assumption is challenged, or when large, public corporations seek refuge in states with different reputations? I suppose we may find out.

And another thing. On this week’s Shareholder Primacy podcast, Mike Levin has a conversation with Matt Moscardi of Free Float Media about the proxy season so far.  Here at Apple, here at Spotify, and here at YouTube.