Delaware has long held a position of primacy as the preferred U.S. jurisdiction for incorporating publicly traded companies. Statistics reported by the Delaware Division of Corporations in recent years indicate that more than half of the nation’s public companies are incorporated in Delaware. Not surprisingly, the Delaware courts have developed a robust and extensive body of case law governing shareholder derivative lawsuits involving Delaware companies.
In a different sense, New York enjoys its own degree of jurisdictional primacy. Many of the largest U.S. public companies, including many that are incorporated in Delaware, are either headquartered or have a substantial presence in New York—and therefore may be subject to personal jurisdiction there. Thus, although the Delaware courts may exercise jurisdiction over any derivative suit involving a company incorporated under Delaware law, New York’s state and federal courts have in recent years served as fora for a substantial volume of derivative suits involving Delaware companies. As several recent cases demonstrate, those courts have largely shown deference to Delaware law, and faithfully applied its principles, when called upon to adjudicate shareholder suits involving Delaware companies.
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