How Delaware's Corporate Law Monopoly Was Nearly Destroyed

55 Pages Posted: 24 Apr 2015 Last revised: 23 Feb 2016

Date Written: September 23, 2015


Delaware’s preeminence in corporate law was almost ended by the rise of the minimum contacts test and the expansion of constitutional rights for consumers. This article is the culmination of my work on corporate law and civil procedure. It reveals the intellectual, theoretical, and doctrinal forces behind the attack on Delaware’s corporate law monopoly.

Delaware’s success depends upon its ability to assert personal jurisdiction over corporate directors. Delaware used a quasi-in-rem process called sequestration until the Supreme Court declared it to be unconstitutional in Shaffer v. Heitner. Sequestration rested on bedrock constitutional theory until radical developments in two unrelated areas of constitutional law came together. First, a handful of academics reconceived International Shoe, transforming minimum contacts into the basis for nearly all personal jurisdiction. Then, the Supreme Court revolutionized the consumer credit world by giving individual debtors radical new constitutional rights.

Neither the modern view of International Shoe nor the debtors’ rights revolution was concerned with corporate law. Nor were these radical changes in constitutional theory related to one another. Yet together, they fomented the intellectual attack that destroyed sequestration and almost caused Delaware to lose its chokehold on corporate law.

Keywords: Delaware, corporate, civil procedure, constitutional

JEL Classification: K22, K39

Suggested Citation

Chiappinelli, Eric A., How Delaware's Corporate Law Monopoly Was Nearly Destroyed (September 23, 2015). DePaul Law Review, Vol. 65, No. 1, 2015, Available at SSRN:

Eric A. Chiappinelli (Contact Author)

Texas Tech University School of Law ( email )

1802 Hartford
Lubbock, TX 79409
United States

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