First Principles for Forum Provisions

16 Pages Posted: 12 Aug 2019 Last revised: 30 Aug 2019

Date Written: July 26, 2019

Abstract

In the closely-watched case of Sciabacucchi v. Salzberg, Vice Chancellor Laster struck down as invalid provisions in three Delaware-chartered companies’ bylaws that required the Securities Act of 1933 complaints be brought in federal district court — and not state court. Although a cutting-edge issue of law, Laster resolved the issue by appealing to ancient “first principles,” namely the notion that each state’s sovereignty is territorially limited.

In this Essay, we argue that the Salzberg opinion’s appeal to territoriality as a decisive “first principle” is deeply misguided. The notion that each state’s legislative jurisdiction is bounded by its territorial limits is a formalist and arbitrary notion that has been broadly rejected by various jurisdiction, including Delaware. Moreover, an opinion truly grounded in “first principles” would take comity — the basic framework for choice of law at the time of the early Republic — as its lodestar, necessitating a functionally and strategically sensitive approach to determining the validity of the federal forum provisions. In this case, comity would recommend not invalidating the forum provisions, as Laster did, but rather dismissing the suit for lack of ripeness.

Keywords: legal history, forum provisions, jurisdiction, choice of law, conflicts, forum selection, Sciabacucchi v. Salzberg, Delaware, corporate law, civil procedure

Suggested Citation

Listwa, Daniel and Polivka, Bradley, First Principles for Forum Provisions (July 26, 2019). Cardozo Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3427352

Daniel Listwa (Contact Author)

Yale Law School ( email )

127 Wall Street
New Haven, CT 06511
United States

Bradley Polivka

Independent ( email )

No Address Available

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