Securities Regulation Law Journal
Mark J. Loewenstein, Pushing the Envelope: Salzberg v. Sciabacucchi and Delaware's Evolving View of the Internal Affairs Doctrine, 48 Sec. Regul. L.J. 182 (2020), available at https://scholar.law.colorado.edu/faculty-articles/1324.
In January, 2020, the Delaware Supreme Court handed down its decision in Salzberg v. Sciabacucchi, upholding a provision in a certificate of incorporation that designated the federal courts as the exclusive jurisdiction for the litigation of claims under the federal Securities Act of 1933. The inclusion of these provisions in Delaware charters and bylaws – often referred to as “Federal Forum Provisions” or FFPs – raised important questions as to the reach of the internal affairs doctrine. This doctrine provides that the jurisdiction of incorporation regulates the internal affairs of its corporations: the relationship among and between the corporate officers, directors and shareholders. Although, strictly speaking, the Court left this definition of internal affairs untouched, the practical effect of the decision was, perhaps, to expand the reach of state corporate law by expanding the kinds of provisions that a corporation may include in its charter and bylaws. This article explores the effect of Salzberg on that doctrine.
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