A Bitter Pill for MetroPCS Shareholders
January 9, 2013In this shareholder challenge to the pending merger of MetroPCS, Deutsche Telekom and T-Mobile, the plaintiffs sought a TRO enjoining the defendants’ use of several “deal protection devices,” including “Poison-Pill Lock-Up” and “Force-the-Vote” provisions. The trial court granted the TRO, agreeing with the plaintiffs that these deal protection devices irreparably harmed shareholders by, among other things, warding off other potential acquirers. Defendants petitioned for a writ of mandamus to vacate the TRO because the trial court failed to address their motion to dismiss or stay the action based on the forum-selection clause in MetroPCS’s bylaws, which mandated Delaware as the proper forum. The Court of Appeals found that because the motion to dismiss or stay was filed before the request for a TRO, the trial court abused its discretion by granting injunctive relief without first ruling on the forum-selection clause issue. Citing the Texas Supreme Court’s holding in In re AutoNation, the Court of Appeals found that “subjecting a party to trial in a forum other than that agreed upon and requiring an appeal to vindicate the rights granted in a forum-selection clause” warrants mandamus. Accordingly, the Court vacated the TRO and stayed the case until the motion to dismiss could be decided.
