In Jana Master Fund, Ltd. v. CNET Networks, Inc., 2008 WL 660556 (Del.Ch., Mar 13, 2008), read opinion here, the Delaware Chancery Court addressed issues relating to the application of SEC Rule 14a-8 and its relevance, or not, to notice and proxy provisions in CNET’s bylaws. The court also discussed the rules of interpretation for deciding disputes involving provisions of bylaws, as well as the strong public policy in Delaware for defending the unimpeded shareholder franchise which in most cases means the right to vote for board members at annual meetings and includes the option of proposing directors if so desired. Many footnotes provide a scholarly underpinning to the court’s analysis. The court’s own introduction and conclusion to the opinion allow for much more eloquent summaries that I could provide. The court’s following introduction essentially suggests a non-issue:

The storm of words in this case, which ranged in rhetorical heft from allusions to Lewis Carroll’s Through the Looking Glass FN1 to incantations of “the bloody shirt of Blasius,” FN2 has proven to be a tempest in a teapot. For reasons I explain below, I have determined that the unambiguous language of the bylaw at the heart of this case renders the bylaw inapplicable to nominations and proposals plaintiff JANA Master Fund seeks to put forth at the annual meeting of defendant CNET Networks. Consequently, I need not and do not address the hypothetical validity of the bylaw were it to operate as CNET contended it would.

The court summarized its conclusions and reasoning thusly:

CNET’s Notice Bylaw unambiguously applies only to proposals and nominations a shareholder wishes to have included in the corporate proxy materials. The language of the provision-construed as required by law-mandates this conclusion. First, the bylaw notes that a shareholder “may seek” to have an issue brought to a vote. The precatory nature of the bylaw recalls the inherently precatory nature of Rule 14a-8. Second, a shareholder who seeks to make a proposal under the bylaw must submit notice to the company in time to have the company include the proposal on its own form of proxy. This timing requirement only makes sense in the context of Rule 14a-8 and does not mirror any of the generally applicable advance notice bylaws that this Court has previously found valid. Finally, the last sentence of the bylaw purportedly grafts onto the bylaw all of the requirements of Rule 14a-8. Those requirements far exceed the default rules under Delaware law and were designed by the SEC only to apply in the context of Rule 14a-8. Under this Court’s rules of construction favoring the free exercise of shareholders’ electoral rights, I must read that final sentence to set the scope of the bylaw narrowly and, therefore, conclude that the bylaw does not apply outside the context of Rule 14a-8.

Postscript: Though it is not clear if one of the parties brought it to the court’s attention or the court took judicial notice of public information on its own, it is noteworthy that the court cited to a New York Times blog called the Dealbook in a footnote that refers to a recent increase in the ownership position of the plaintiff–and its affiliates. Although the Chancery Court has cited in the past to blogs of corporate law professors, for example, this is the first citation that I can recall to a "business-focused blog". The specific cite from the court’s footnote is:

Postscript II: Here is a prior post with a link that may bring more focus to the court’s cite to the Dealbook blog. The foregoing link highlights Law Professor Steven Davidoff,  who, on the above-referenced Dealbook blog, provided an extensive background discussion of the factual and legal issues in this case when it was filed .  Also, fyi, here is a link to prior recent decisions of the Chancery Court involving CNET.