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ANDERSON & KARRENBERGJon V. Harper (#1378)50 West Broadway, Suite 700Salt Lake City, UT 84101Telephone: (801) 534-1700Facsimile: (801) 364-7697

jharper@aklawfirm.com

Attorneys for Plaintiff

[Additional counsel appear on signature page]

ROBBINS GELLER RUDMAN& DOWD LLP

Randall J. Baron (admitted pro hac vice )David T. Wissbroecker (admitted pro hac vice )Edward M. Gergosian655 West Broadway, Suite 1900San Diego, CA 92101

IN THE THIRD JUDICIAL DISTRICT COURT

IN AND FOR SALT LAKE COUNTY, STATE OF UTAH

DONALD HAWORTH and JOHN CAPELA,on Behalf of Themselves and All OthersSimilarly Situated,

Plaintiff,

vs.

FX ENERGY, INC., ORLEN UPSTREAM Sp.z o.o., KIWI ACQUISITION CORP., DAVID

N. PIERCE, JERZY MACIOLEK, DENNIS B.GOLDSTEIN, ARNOLD S. GRUNDVIG, JR.and H. ALLEN TURNER,

Defendants.

PLAINTIFFS OPPOSITION TODEFENDANTS MOTION TO STAYPROCEEDINGS

CLASS ACTION

TIER 3

Case No. 150907699

Judge Todd M. Shaughnessy

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The whole point of adopting the Forum Selection Bylaw was to solve the issue ofmulti-forum litigation such that this Court (and courts in other jurisdictions)

would not need to divine the appropriate forum.

Delaware Chancellor Andre G. Bouchard in rejecting a challenge to the validity of an

outbound forum selection provision that designated North Carolina as the sole forum for

shareholder litigation involving a Delaware corporation in City of Providence v. First Citizens

Bancshares, Inc. , 99 A.3d 229, 239 (Del. 2014).

I. INTRODUCTION

Through their motion, Defendants1 are asking this Court to sanction an unprecedented

attempt at a reverse auction, a litigation tactic wherein the defendant[s] in a series of cl ass

actions pick the most ineffectual class lawyers to negotiate a settlement with in the hope that the

district court will approve a weak settlement that will preclude other claims against the

defendant[s]. See Blyden v. Mancusi , 186 F.3d 252, 270 n.9 (2d Cir. 1999).

On March 12, 2014, FX Energy amended its bylaws to adopt a forum selection provision

(the Venue Provision) in connection with claims for breach of fiduciary duty, or any other

actions governed by the internal affairs doctrine or oth erwise controlled by Nevada law,

brought against the members of the Companys Board of Directors (the Board). As FX Energy

maintains its corporate headquarters in Salt Lake City, Utah, the Venue Provision requires such

actions to be brought in a state or federal court located within the state of Utah, unless the

Company consents in writing to the selection of an alternate forum. Following the public

announcement of the proposed sale of FX Energy (the Proposed Transaction), plaintiffs

1 Defendants collectively refer to FX Energy, Inc. ("FX Energy" or the "Company"), David N.Pierce, Jerzy Maciolek, Dennis B. Goldstein, Arnold S. Grundvig, Jr., and H. Allen Turner.

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Donald Haworth and John Capela (together, the Utah Plaintiffs) brought their action before

this Court (the Utah Action) in accordance with the Venue Provision and are actively litigating

their claims.

Following the announcement of the Proposed Transaction and without the Company

waiving the requirements of its Venue Provision, four shareholders of FX Energy filed similar

actions in the District Court of Clark County, Nevada (the Nevada Actions). Rather than

seeking to enforce the Venue Provision, which would eliminate any concerns over parallel

litigation, Defendants are asking this Court to stand down and allow the litigation to proceed in

Nevada.

Defendants motivation for this nonsensical approach becomes clear when considering

the law firms representing the shareholders in the Utah Action and the Nevada Actions. Under

every available metric, there are two tiers of plaintiffs firms that regularly file claims

challenging merger transactions on behalf of shareholders of public companies one tier that

aggressively litigate these actions and pursue claims for monetary damages, and another tier that

often settle these cases quickly and give away shareholders claims as part of a global release

while providing no material benefits to the class. Although counsel for the Utah Plaintiffs are

among the former tier, having secured a majority of the largest monetary recoveries on record in

this type of action, counsel in the Nevada actions are among the latter tier and do not have the

same track record or approach to litigation. See Joel Edan Friendlander, How Rural/Metro

Exposes the Systemic Problem of Disclosure Settlements , Social Science Research Network,

Nov. 12, 2015 (attached hereto as Exhibit A).

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For these reasons and those stated herein, the Court should deny Defendants motion,

reject their attempt at a reverse action, and act to protect the interests of all shareholders of FX

Energy by ensuring that their claims are litigated by a top tier plaintiffs firm.

II. ARGUMENT

A. The Court Does Not Have the Discretion to Stay the Utah Action

While the decision to stay an action in favor of related litigation taking place in another

forum is normally within the discretion of the trial court, that is not the case here. As the Utah

Supreme Court has explained, it is w ell established precedent that the bylaws of a corporation,

together with the articles of incorporation, the statute under which it was incorporated, and the

[shareholders] application, constitute a contract between the [shareholder] and the corporation,

and that a covenant of good faith and fair dealing exists between [a corporation] and [its

shareholders]. See Ute Indian Tribe of the Uintah & Ouray Reservation v Ute Distrib. Corp. ,

2012 U.S. App. LEXIS 245, at *41 (10th Cir. 5 Jan. 2012); see also Boilermakers Local 154 Ret.

Fund v. Chevron Corp. , 73 A.3d 934, 939 (Del. Ch. 2013) (finding that the bylaws of a

corporation constitute a binding broader contract among the directors, officers, and

stockholders of the corporation). Although the terms of that contract may be amended, even

unilaterally under certain circumstances, the parties to the contract must abide by its terms. See

First Citizens , 99 A.3d at 231 (upholding a forum selection clause of a Delaware corporation that

designated the state and federal courts of North Carolina as the sole venues in which the

companys shareholders could bring claims for breach of fiduciary duty against corporate

officers and directors).

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Here, all actions brought by FX Energy shareholders concerning the Proposed

Transaction, both in Utah and Nevada, were filed without the Company providing a written

waiver of the requirement of the Venue Provision to bring such claims only in the courts of Utah.

Consequently, only the Utah Action was properly filed, and the Nevada Actions are a violation

of the Venue Provision and a breach of the contractual bylaws existing between FX Energy

shareholders and the Company. Under these circumstances, granting of Defendants motion will

equate to a sanctioning of a breach of contract and punish those shareholders who respected their

contractual obligations.

B. Even If a Stay Is Discretionary, Defendants Sole Argument Ring Hollow

In instances where the trial court has the discretion to stay an action in favor of parallel

litigation pending in another forum, the Supreme Court of Utah has identified five factors to be

considered in determining whether a stay should be granted: (1) The relative ease of access to

proof; (2) the availability of compulsory process for witnesses; (3) the possibility of the view of

the premises, if appropriate; (4) all other practical problems that would make the trial of the case

easy, expeditious and inexpensive; (5) whether the controversy is dependent upon the application

of the law of this State which the courts herein more properly should decide than those of

another jurisdiction. See Power Train v. Stuver , 550 P.2d 1293, 1295 (1976) (refusing to stay

an action pending in Utah in favor of litigation in California).

Here, while conceding that the remaining factors do not support a stay, Defendants

contend that Nevada is the appropriate forum for the actions concerning the Proposed

Transaction because Nevada law will be applied to the underlying claims. See Defendants

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Motion to Consolidate a nd Stay Proceedings (Defs. Motion) at 7 -9. This argument rings

hollow for two primary reasons.

First , at the time that the Venue Provision was adopted, Nevada law applied to any

claims by FX Energy shareholders to claims for breach of fiduciary duty brought against the

members of the Board, as they do now. Nonetheless, Defendants designated Utah as the

appropriate forum in which to litigate claims for breach of fiduciary duty, as well as all other

actions arising under Nevada law. Defendants have not identified any emerging issues of

Nevada law that arise in these actions that would undermine their earlier decision to designate

Utah as the appropriate venue. To the contrary, Defendants acknowledge in their motion that

[t]he courts in both Utah and Nevada are well- equipped to hear and determine this dispute. Id.

at 7. In fact, courts throughout the country will routinely apply the law of other jurisdictions

when adjudicating claims of breach of fiduciary duty in the context of a merger dispute. See,

e.g. , Matter of Topps Co. Sholder Litig ., 859 N.Y.S.2d 907, 2007 N.Y. Misc. LEXIS 8973, at

*19 (2007) (denying motion to stay proceedings in favor of a parallel action pending in the

Delaware Court of Chancery); State Farm Mut. Auto. Ins. Co v. Super Ct. , 114 Cal. App. 4th

434, 455 (Cal. App. 2003) (There is no rule of law which requires dismissal of a suitor from

the forum on a mere showing that the trial will involve issues which relate to the internal affairs

of a foreign corporation.) .

Second , the issue of assessing the best forum to apply the substantive law becomes moot

when the company has adopted a forum selection provision. In rejecting the same argument in

First Citizens that Defendants make now, the Delaware Court of Chancery found that the issue of

whether the state of incorporation is better positioned to apply the underlying substantive law is

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not a relevant consideration where there is a designated forum for resolving intra-corporate

disputes by virtue of a forum selection clause. 99 A.3d at 239. Accordingly, Defendants

contention that Nevada is a more appropriate forum because the claims will require the

application of Nevada law lacks merit. 2

C. Any Concerns over Parallel Litigation Will Be Eliminated by theEnforcement of the Venue Provision

As a basis for bringing their motion, Defendants assert that they should not be burdened

by parallel litigation, claiming [t]here is no justification for burdening multiple courts and the

parties with identical challenges to a merger, pressed by identical putative classes of plaintiffs

against identical defendants. Id. at 5. However, the forum selection clauses within corporate

bylaws, like the Venue Provision, are intended to eliminate these exact concerns. As Chancellor

Bouchard explained in rejecting a challenge to the validity of an outbound forum selection

provision that designated North Carolina as the sole forum for litigation concerning a Delaware

corporation, [t]he whole point of adopting the Forum Selection Bylaw was to solve the issue of

multi-forum litigation such that this Court (and courts in other jurisdictions) would not need to

divine the appropriate forum. First Citizens , 99 A.3d at 239; Boilermakers , 73 A.3d at 952

([F]orum selection bylaws are designed to bring or der to what boards ... say they perceive to

be a chaotic filing of duplicative and inefficient derivative and corporate suits against the

directors and the corporations.). Indeed, if boards of directors and stockholders believe that a

2 Although it is not a factor identified in Power Train , Defendants imply that this Court shouldyield to the actions pending in Nevada because those actions were filed first. See Defs. Motionat 5. However, this ignores that all actions were filed at the same procedural stage, and [theSupreme Court of Utah] is wary of embracing statutory interpretations that confer legal rights

based on victories in races to the courthouse. CCD, L.C. v. Millsap , 116 P.3d 366, 372 (2005).

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particular forum would provide an efficient and value-promoting locus for dispute resolution,

then corporations are free to respond with charter provisions selecting an exclusive forum for

intra- entity disputes. In re Revlon, Inc. Sholders Litig. , 990 A.2d 940, 960 (Del. Ch. 2010).

Here, Defendants adopted the very tool intended to eliminate their precise concerns

regarding a multi-forum litigation a forum selection provision that requires shareholders

claims to be litigated in a particular forum. In order to eliminate any potential problems

regarding inefficiency or inconsistency, Defendants need only enforce the Venue Provision that

they adopted over a year ago. As recent research shows, more than 300 public companies have

adopted forum selection provisions in their charter or bylaws. Robert M. Daires & Olga

Koumrian, Shareholder Litigation Involving Acquisitions of Public Companies , Cornerstone

Research, 2014 (attached hereto as Exhibit B), at 3. However, to the knowledge of counsel for

the Utah Plaintiffs, this is the first instance in which a company has ever sought to repudiate its

own form selection provision and seek a stay of an action filed in the companys chosen forum,

and no court has ever rejected such a bylaw through an as-applied challenge when adopted this

far in advance of the approval of the disputed merger transaction.

III. CONCLUSION

For the reasons stated herein, the Utah Plaintiffs respectfully respect that Defendants

motion to stay proceedings be denied.

DATED: November 16, 2015 ANDERSON & KARRENBERG

/s/ Jon V. HarperJon V. Harper50 West Broadway, Suite 700Salt Lake City, Utah 84101Telephone: 801/534-1700Fax: 801/364-7697

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ROBBINS GELLER RUDMAN& DOWD LLP

RANDALL J. BARONDAVID T. WISSBROECKEREDWARD M. GERGOSIAN655 West Broadway, Suite 1900San Diego, CA 92101Telephone: 619/231-1058619/231-7423 (fax)

THE BRISCOE LAW FIRM, PLLCWILLIE C. BRISCOE8150 N. Central Expressway, Suite 1575Dallas, TX 75206Telephone: 214/239-4568281/254-7789 (fax)

POWERS TAYLOR LLPPATRICK W. POWERSCampbell Centre II8150 North Central Expressway, Suite 1575Dallas, TX 75206Telephone: 214/239-8900214/239-8901 (fax)

ROBBINS ARROYO LLPBRIAN J. ROBBINSSTEPHEN J. ODDO600 B Street, Suite 1900San Diego, CA 92101Telephone: 619/525-3990619-525/3991 (fax)

Attorneys for Plaintiffs

1066494

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CERTIFICATE OF SERVICE

I hereby certify that on the 16 th day of November 2015, I caused a true and correct copy of

the foregoing OPPOSITION TO DEFENDANTS MOTION TO STAY PROCEEDINGS to be

served upon the following via Electronic Mail:

Bradley J. BenoitBRACEWELL & GIULIANI LLP

711 Louisiana Street, Suite 2300Houston, TX 77002-2770Telephone: 713-221-1224

Bradley.Benoit@bgllp.com

ANDERSON & KARRENBERG

/s/ Jon V. Harper______________JON V. HARPER

mailto:Bradley.Benoit@bgllp.commailto:Bradley.Benoit@bgllp.commailto:Bradley.Benoit@bgllp.com

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EXHIBIT A

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EXHIBIT B

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