Ubhi v. Leverton

Background

Maghar Ubhi brought a shareholder derivative action on behalf of nominal defendant Hut 8 Corp. The complaint alleges that the defendants made or participated in materially false and misleading statements about Hut 8’s business, operations, and prospects.

On June 13, 2024, the court ordered Ubhi to show cause—meaning to explain—why the action should not be transferred to the U.S. District Court for the Southern District of Florida, where Hut 8’s principal place of business is located. Ubhi responded by requesting transfer to the U.S. District Court for the District of Delaware. The response relied on a forum-selection clause in Hut 8’s certificate of incorporation and bylaws. That clause requires certain corporate disputes to be brought in the Delaware Chancery Court or, if that court lacks jurisdiction, in a state or federal court located in Delaware. Ubhi also argued that Hut 8 is organized in Delaware and that the action involves Delaware law. The defendants took no position on the transfer.

Court’s Analysis

The court applied 28 U.S.C. § 1404(a), which permits a federal district court to transfer a civil action for the convenience of the parties and witnesses and in the interest of justice, including to a district to which all parties have consented. The court cited the rule that a valid forum-selection clause ordinarily supports transfer to the specified forum.

The court noted that the clause identified the Delaware Chancery Court as the primary forum, but a federal court may transfer a case only to another federal court. The court therefore ordered transfer to the U.S. District Court for the District of Delaware.

Disposition

The court ordered that the action be transferred to the District of Delaware. It directed the clerk to transfer the case and close the Southern District of New York case. The opinion does not decide the merits of Ubhi’s allegations.