Joseph v. Leverton
- Analisa Torres
- 1:24-cv-03081
- U.S. District Court · Southern District of New York
- 2
In Joseph v. Leverton, Judge Torres transferred the shareholder derivative action to Delaware under Hut 8’s forum-selection clause.
Andrew Joseph, Hut 8 Corp., and the defendants in the shareholder derivative action. The action was transferred from the Southern District of New York to the District of Delaware, and the Southern District of New York case was closed.
What happened
In Joseph v. Leverton, Andrew Joseph brought a shareholder derivative action on behalf of Hut 8 Corp., alleging that the defendants made or helped make materially false or misleading statements about Hut 8’s business and prospects.
The court had ordered Joseph to explain why the case should not be transferred to Florida, where Hut 8’s principal place of business is located. Joseph instead requested transfer to the District of Delaware, relying on a forum-selection clause in Hut 8’s corporate documents. The defendants took no position on the transfer.
Judge Analisa Torres ordered the action transferred to the U.S. District Court for the District of Delaware and directed the Clerk to close the case in the Southern District of New York. The order did not decide the truth of Joseph’s allegations or the underlying claims.
The detailed version
- Joseph v. Leverton · No. 1:24-cv-03081
- Analisa Torres
- June 25, 2024
Background
Andrew Joseph brought a shareholder derivative action on behalf of Hut 8 Corp. He alleged that the defendants made or participated in making materially false and misleading statements about Hut 8’s business, operations, and prospects.
On June 13, 2024, the court ordered Joseph to show why the action should not be transferred to the Southern District of Florida, where Hut 8’s principal place of business is located. Joseph responded by requesting transfer to the District of Delaware. He relied on a forum-selection clause in Hut 8’s Certificate of Incorporation and Bylaws. The 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. Joseph also pointed out that Hut 8 is organized in Delaware and argued that the action involves Delaware law. The defendants took no position on transfer.
Court’s Reasoning
The court applied 28 U.S.C. § 1404(a), which allows a federal district court to transfer a civil action for the convenience of the parties and witnesses, in the interest of justice, or to a district to which all parties have consented. The court cited the rule that a case ordinarily should be transferred to the forum specified in a valid forum-selection clause.
Because the clause identified Delaware as the alternative forum when the Delaware Chancery Court could not hear the dispute, the court ordered transfer to the District of Delaware. The court noted that federal courts can transfer an action only to another federal court, so it transferred the case to the federal district court rather than to the Delaware Chancery Court.
Disposition and Effect
The court ordered that the action be transferred to the U.S. District Court for the District of Delaware. It directed the Clerk of Court to transfer the case and close the Southern District of New York case. The order resolved where the case would be heard; it did not resolve the allegations or the merits of the shareholder derivative claims.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.