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Preemption as Micromanagement

11 Pages Posted: 18 Jun 2010 Last revised: 1 Oct 2010

Larry E. Ribstein

University of Illinois College of Law (deceased); PERC - Property and Environment Research Center

Date Written: June 17, 2010

Abstract

Guhan Subramanian, Steven Herscovici & Brian Barbetta, Is Delaware’s Antitakeover Statute Unconstitutional? Evidence from 1988-2008, 65 BUS. LAW. 685 (2010) (“SHB”), argues that the constitutionality of the Delaware takeover statute is “up for grabs” because it denies bidders the “meaningful opportunity for success” three Delaware district court opinions require to avoid preemption by the Williams Act. However, this comment on SHB argues that, even assuming the applicable federal cases might be construed to support SHB’s conclusion, courts almost certainly would not follow this approach once they saw, with the aid of SHB’s analysis, the extent to which it requires courts to micromanage state corporate law. Moreover, from a policy standpoint, this micromanagement could have a significant negative effect on the development of state law. In short, rather than providing an argument for preempting the Delaware statute, SHB’s analysis demonstrates why it is important to avoid this result.

JEL Classification: K22

Suggested Citation

Ribstein, Larry E., Preemption as Micromanagement (June 17, 2010). Business Lawyer, Vol. 65, p. 789, 2010; University of Illinois Law & Economics Research Paper No. LE10-011; Illinois Public Law Research Paper No. 10-04. Available at SSRN: https://ssrn.com/abstract=1626325

Larry Edward Ribstein (Contact Author)

University of Illinois College of Law (deceased)

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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