Even in the worst of times, there are always a few winners. 

One of them right now is meal kit delivery service Blue Apron, which has seen its stock soar seven-fold in the past week. (Investors apparently concluded that since we're all stuck at home, Blue Apron's business concept—"We'll provide you with all the ingredients that you need to make a delicious meal"—is genius.)

The cherry on top? The company—along with Roku Inc. and Stitch Fix Inc.—on Wednesday won a major victory before the Delaware Supreme Court. 

At issue: a corporation's ability to adopt charter provisions that require certain securities claims to be brought in federal rather than state courts. 

The ruling—which reversed the lower court's holding—is a big deal for pre-IPO companies. It gives them a way to avoid litigating potentially duplicative suits brought under Section 11 of the Securities Act of 1933 in state courts, where results tend to be more inconsistent—and less favorable to the companies. Such suits target false or misleading information in a company's registration statement—litigation that has caused D&O insurance premiums to skyrocket in recent years.

Credit for the win goes to a team from Wilson Sonsini Goodrich & Rosati led by William B. Chandler III, a former chancellor of Delaware's Court of Chancery, who argued the appeal and represents Roku and Stich Fix. Sharing the limelight, Wilmer Cutler Pickering Hale and Dorr and Richards Layton & Fingers represent Blue Apron.

"We are pleased with the result and anticipate this decision will have important implications for Delaware law going forward," Chandler said. 

Wilmer partner Timothy Perla added, "We are very pleased with the Supreme Court's decision, which confirms that Delaware law allows corporations to adopt innovative corporate governance provisions."

Plaintiff Matthew Sciabacucchi, who was represented by Block & Leviton and Heyman Enerio Gattuso, bought stock in all three companies—each one a Delaware corporation that launched a 2017 IPO and included a federal forum selection provision in its certificate of incorporation.

In late 2017, Sciabacucchi filed a putative class action complaint in the Delaware Court of Chancery against the individual company directors, naming the companies as nominal defendants. He asked the court for a declaratory judgment that the federal-forum provisions are invalid under Delaware law.

In December of 2018, Vice Chancellor J. Travis Laster granted his motion for summary judgment, finding that the federal forum provisions are "ineffective and invalid." 

A flurry of client alerts ensued, and legal luminaries such as Stanford Law professor Joseph Grundfest blasted Laster's decision. "Sciabacucchi's logic and conclusion are fragile. The opinion conflicts with controlling U.S. and Delaware Supreme Court precedent and relies critically on assumptions of fact that are demonstrably incorrect," Grundfest wrote. 

Some key context: In 2018, the U.S. Supreme Court in its Cyan decision "held that federal and state courts have concurrent jurisdiction over class actions based on claims brought under the 1933 Act, and that such claims are not removable to federal court," the Delaware Supreme Court noted. As a result, securities class action filings sharply increased in state courts. Moreover, the Delaware court noted, almost half of these state court cases last year included a parallel action in federal court.

"When parallel state and federal actions are filed, no procedural mechanism is available to consolidate or coordinate multiple suits in state and federal court. The costs and inefficiencies of multiple cases being litigated simultaneously in both state and federal courts are obvious," wrote Justice Karen Valihura for the unanimous court. "The possibility of inconsistent judgments and rulings on other matters, such as stays of discovery, also exists."

It's easy to see why companies would want to avoid such scenarios. Including a federal forum section clause in response "classically" fits the definition of provisions allowed under Section 102 Delaware General Corporation Law, the Delaware justices held.

The law says that certificates of incorporation may contain "Any provision for the management of the business and for the conduct of the affairs of the corporation." Moreover, the law also allows provisions "defining, limiting and regulating the powers of the corporation, the directors and the stockholders." A federal forum selection clause falls under that umbrella too, the court held, since it prescribes "where current and former stockholders can bring Section 11 claims against the corporation and its directors and officers."

The state supreme court also rejected suggestions that federal forum selection clauses violate Delaware public policy. Delaware's general corporation law "allows immense freedom for businesses to adopt the most appropriate terms for the organization, finance, and governance of their enterprise," Valihura wrote. 

But what about other states? How will they feel about the ruling? And will they enforce it?

Valihura acknowledged concerns that they "might react negatively to what could be viewed as an out-of-our-lane power grab. … Delaware historically has, and should continue to be, vigilant about not stepping on the toes of our sister states or the federal government."

Optimistically, the Delaware court concluded that "there are persuasive arguments that could be made to our sister states that a provision in a Delaware corporation's certificate of incorporation requiring Section 11 claims to be brought in a federal court does not offend principles of horizontal sovereignty—just as it does not offend federal policy."