Much has been written lately about mandatory forum selection for the adjudication of fiduciary duty claims and other intracorporate disputes. While recent attention has been given to the propriety of enacting forum selection bylaws in U.S. jurisdictions, the Ninth U.S. Circuit Court of Appeals recently considered the effects of a statutory forum selection provision permitting only a Canadian court to grant relief for a breach of fiduciary duty claim arising under Canadian law.
In Paulsson v. Dorosz, No. 13-55413 (9th Cir. Apr. 27, 2015), the Ninth Circuit in a first-of-its-kind opinion dismissed a breach of fiduciary duty claim under Federal Rule of Civil Procedure 12(b)(6), holding that shareholders of an Alberta, Canada-incorporated business cannot obtain relief in an American court for a breach of fiduciary duty claim arising under Section 242 of the Alberta Business Corporations Act. Rather, under Alberta law, a remedy for such a claim may be obtained only in the Court of the Queen’s Bench of Alberta. Because the laws of most Canadian provinces provide for only a Canadian court to grant relief with respect to claims challenging acts of fiduciaries of a Canadian corporation, the Ninth Circuit’s decision in Paulsson is a potent tool for the quick disposal of such claims if they are brought in an American court.
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