Podcast Release: SpaceX’s Novel Shareholder Dispute-Resolution Bylaws Could Have Far-Reaching Implications

The SpaceX IPO generated enormous attention for obvious reasons. It was the largest IPO in history, and the company’s stock price initially surged after trading began. But an important legal development associated with the IPO has received considerably less attention: SpaceX adopted an unusually comprehensive shareholder dispute-resolution regime (the “Regime”) in its bylaws.

In our Consumer Finance Monitor podcast released today, our host, Alan Kaplinsky (founder, former leader for 25 years, and now Senior Counsel of our Consumer Financial Services Group) spoke with Professor Mohsen Manesh of the University of Oregon School of Law about the Regime and the significant legal questions it raised. Manesh is an authority on corporate, contract, and LLC law and has written extensively about arbitration provisions in corporate charters and bylaws. This was his second appearance on our podcast to discuss shareholder arbitration and the SEC’s changing position on the subject. You can find a blog post about his first appearance which links to the podcast show released on January 8, 2026, entitled “The Future of Shareholder Arbitration in Light of SEC’s New Policy Statement”. You can find more on this topic in a blog posted on June 15, 2026, entitled “SpaceX Becomes the First Major Issued to implement the SEC’s New Shareholder Arbitration Policy”.

The SpaceX provisions are notable because they go considerably beyond a conventional arbitration clause. They establish a multilayered system that determines where shareholder disputes must be brought, when arbitration will be required, and whether shareholders may proceed on a class basis.

How the SpaceX dispute-resolution regime works

Article 10 of SpaceX’s bylaws provides that shareholder “internal disputes” generally must be brought exclusively in the Texas Business Court. The provision covers a broad range of disputes, including derivative actions, fiduciary-duty and corporate-governance claims, and certain federal securities-law claims.

Arbitration is essentially a fallback mechanism. If a claim is brought in the Texas Business Court and that court determines, in a final and unappealable judgment, that it lacks jurisdiction over the claim, the claim becomes an “other dispute” that is subject to binding arbitration under the Texas Arbitration Act and the expedited rules of the International Chamber of Commerce. The bylaws specify Houston, Texas as the place of arbitration.

The distinction is particularly important under the federal securities laws. The Securities Act of 1933 permits concurrent jurisdiction in state and federal courts, while the Exchange Act of 1934 gives federal courts exclusive jurisdiction over Exchange Act claims. Thus, a Securities Act Section 11 claim would ordinarily be subject to the Texas Business Court forum provision, while an Exchange Act claim, such as a Rule 10b-5 claim, would ultimately be routed to arbitration.

But perhaps the most consequential feature of the regime is not arbitration at all. It is the class action waiver. The bylaws contain two class action waivers. One applies to claims brought in the Texas Business Court, while the other applies to arbitrations. In either forum, shareholders are required to pursue their claims individually rather than on behalf of a class. SpaceX, however, retains the ability to consolidate shareholder claims into a collective proceeding.

The distinction between the two waivers could prove critical.

Class action waivers contained in arbitration agreements have substantial support under Supreme Court precedent interpreting the Federal Arbitration Act (FAA). The FAA generally preempts state-law rules that would prohibit enforcement of an otherwise valid arbitration agreement, including rules that would prevent parties from agreeing to individual rather than class arbitration.

SpaceX’s standalone class action waiver presents a different question. The waiver applies to shareholder litigation in court and therefore cannot rely on the FAA’s preemptive force in the same way as a class waiver contained within an arbitration agreement. As Professor Manesh explained, a shareholder challenging the standalone waiver could invoke traditional state-law contract doctrines such as unconscionability or public policy. The shareholder also could argue that the anti-waiver provisions of the federal securities laws prohibit the waiver.

That could make the standalone class action waiver the most consequential—and potentially most closely watched—aspect of SpaceX’s approach.

What about shareholder consent? Another significant issue is whether shareholders are bound by bylaws containing dispute-resolution provisions when they never expressly agreed to them.

Corporate law generally treats a corporation’s charter and bylaws as part of the contractual relationship between the corporation and its shareholders. Under the doctrine of implied shareholder consent, the purchase of shares is generally treated as assent to the corporation’s governing documents. That principle does not depend on the shareholder having actually read the bylaws.

This potentially makes it difficult for a SpaceX shareholder to argue simply that the shareholder never signed an arbitration agreement. The issue also is not limited to investors who purchased SpaceX shares in the IPO. According to Professor Manesh, the same corporate-law principles generally would apply to shareholders who acquired their shares on the secondary market.

SpaceX’s dispute-resolution provisions also need to be viewed against the broader competition between Delaware and Texas for corporate charters.

SpaceX reincorporated in Texas in 2024 after previously being incorporated in Delaware. Texas subsequently adopted corporate-law provisions designed, among other things, to make Texas more attractive to companies considering incorporation or reincorporation there.

Delaware, by contrast, has statutes restricting provisions in corporate charters and bylaws that would prevent shareholders from bringing certain claims in Delaware courts. One statute addresses state corporate-law claims, while another, enacted in 2025, addresses other shareholder claims, including federal securities-law claims. Although the statutes do not expressly use the word “arbitration,” their legislative history indicates that they were intended to prevent provisions requiring shareholder claims to be arbitrated rather than heard in Delaware courts.

That creates an important unresolved question concerning the interaction between Delaware corporate law and the FAA. If Delaware prohibits a corporation from adopting an arbitration provision in its charter or bylaws, can the FAA nevertheless preempt that prohibition?

Professor Manesh has advanced a novel theory for why the FAA may not preempt Delaware’s restrictions. His argument rests on the proposition that the state of incorporation is itself a party to the corporate contract embodied in the corporation’s charter and bylaws. If Delaware has withheld its assent to arbitration, he argues, there is no agreement to arbitrate to which the FAA could apply.

Whether courts ultimately accept that theory remains to be seen. The first major test may come from a securities class action

The SpaceX provisions have not yet been subjected to a significant judicial test. That could change as the company’s stock price has declined from its initial post-IPO high.

As Professor Manesh noted during our discussion, a Section 11 claim could provide a particularly interesting test. Section 11 claims generally do not require proof of scienter or reliance and can be brought based on material misstatements or omissions in a registration statement. If such a claim were filed against SpaceX, the company’s forum-selection provision would direct the claim to the Texas Business Court rather than arbitration. That, in turn, could squarely present the question whether the standalone class action waiver is enforceable.

The outcome could have significance well beyond SpaceX. Will other public companies follow?

The SEC’s September 2025 policy reversal removed an important regulatory obstacle to shareholder arbitration provisions. Professor Manesh explained that, before the reversal, the SEC had historically opposed such provisions. The agency’s change in position meant that public companies no longer faced the same regulatory risk merely because they adopted shareholder arbitration provisions in their charters or bylaws.

Nevertheless, SpaceX has not yet triggered a broad movement toward similar provisions. Professor Manesh identified Zion Oil & Gas as another public company that adopted an arbitration bylaw after reincorporating in Texas, but said he was not aware of other public companies that had adopted comparable arbitration provisions following the SEC’s policy reversal.

One reason may be that the legality of SpaceX’s approach remains unsettled. Another may be the reaction of institutional investors. Professor Manesh noted that institutional investor groups, including CalPERS, have expressed opposition to the SpaceX dispute-resolution regime.

For companies considering similar provisions, therefore, the question is not simply whether the provisions can be drafted. It is whether they will withstand judicial scrutiny and how shareholders and institutional investors will react.

The SpaceX bylaws bring together several areas of law that ordinarily are considered separately: corporate governance, forum-selection provisions, arbitration, the FAA, federal securities-law anti-waiver provisions, class action waivers, and shareholder consent.

The most interesting issue may ultimately be whether a public company can accomplish through a standalone class action waiver what the FAA permits it to accomplish through an arbitration agreement. If courts enforce the SpaceX provision, corporate boards may have a powerful new mechanism for limiting shareholder class litigation. If courts invalidate it, the decision could establish important boundaries on the ability of corporations to use their governing documents to restrict shareholder remedies.

Either way, the first judicial decisions interpreting SpaceX’s bylaws are likely to be closely watched by public companies, corporate counsel, securities lawyers, institutional investors, and arbitration practitioners.

As Professor Manesh and I discussed, SpaceX’s Regime is about much more than arbitration. It presents a novel test of the intersection between corporate law, federal arbitration policy, federal securities law, forum selection, and class action practice. The litigation that eventually tests these provisions could shape the development of shareholder dispute resolution for years to come.