Most readers are likely familiar with the recent trend of Delaware corporations adopting forum-selection bylaws dictating that all shareholder litigation filed against an entity involving the internal affairs of the corporation must be filed in a state court in Delaware. In late 2013, however, United Technologies Corp. attempted to condition a stockholder’s inspection of documents pursuant to Section 220 of the Delaware General Corporation Law on his entry into a confidentiality stipulation containing a clause requiring any litigation that was the fruit of the inspection to be prosecuted in Delaware. In a transcript ruling in Treppel v. United Technologies, C.A. No. 8624 (Del. Ch. Jan. 13, 2014), Vice Chancellor Sam Glasscock III rejected such a condition to a statutory inspection. The facts, arguments of the parties and the rulings of the court, as transcribed, are highlighted below.

In 2010, Vice Chancellor J. Travis Laster expressed in his opinion in In re Revlon Shareholders Litigation, No. 4578-VCL (Del. Ch. March 16, 2010), that charter provisions dictating Delaware as the sole forum for shareholder suits might be one way to stem the tide of multijurisdictional litigation. Advisers of Delaware corporations took that suggestion and ran with it. Indeed, by 2013, more than 250 publicly traded companies had adopted either charter amendments (in some cases) or director-adopted bylaw amendments (in most cases) along these lines.

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