The Market for Preclusion in Merger Litigation

Delaware dominates the corporate law market.' More than half of all public companies and over sixty percent of the Fortune 500 are incorporated in Delaware. These companies are subject to Delaware's corporate law regardless of where their businesses are physically located. Although academics continue to debate whether it is good or bad, they have long agreed that Delaware's dominance is a result of its law and its judiciary. As a corollary, it was widely understood that Delaware courts decided most cases involving Delaware corporations.

The discovery that litigation involving these corporations very often takes place outside of Delaware therefore came as something of a shock. Recent research shows that more cases are filed against Delaware corporations in other states than in Delaware itself. As practitioners have long lamented, not only are companies sued in connection with every major merger or acquisition transaction, it now appears that they are sued multiple times in multiple places; increasingly, these cases are resolved outside of Delaware., As a forum for corporate litigation, Delaware no longer dominates.