2014 • Volume 37 • Number 1

Multi-jurisdictional Litigation: Who Caused This Problem, and How Can It Be Fixed?

Edward B. Micheletti & Jenness E. Parker 

This Article examines the origins of multi-jurisdictional deal litigation——the growing phenomenon of stockholder claims relating to the same proposed transaction being filed not only in the target company’s state of incorporation (oftentimes, Delaware), but also in other locations, such as where the company’s principal place of business is located (usually, a non- Delaware forum). The Article examines the many costs, risks and problems associated with multi-jurisdictional litigation, as well as the methods being used by defendants to manage a plaintiff-driven problem that has no easy solution. The Article also explores how the Delaware Court of Chancery——regarded by many as the most renowned business court in the world——has approached the multi-jurisdictional litigation issue, and identifies potential solutions for parties, counsel and the courts to consider. The authors ultimately advocate that though there is no perfect solution, the best approach would be one in which the common law acknowledges claims involving the internal affairs of a corporation, including those arising out of a proposed transaction, be raised solely in, and addressed by, courts in the state of incorporation. 

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