Forum Shopping Case Closes with a Whimper

Scully v. Nighthawk is a recent Delaware Court of Chancery case involving multi-state class action litigation, highlighted on these pages here, in which the issue was raised about forum shopping and settlements of suits in multi-state corporate cases that could be potentially collusive.

Professor Brian J.M. Quinn writes here about a short letter dated April 12, 2011 from the Court to counsel in the case, available here, in which the Court offers a mea culpa and accepts the report of the Special Counsel appointed by the Court, which concluded that there was no wrongdoing by any of the lawyers involved and the several issues raised by multi-state class actions, such as what some may describe as forum shopping, are relatively unchartered areas of the law in terms of the absence of bright-line standards in many instances.

The good professor also links to a paper he authored about the increasing trend of merger-related litigation being filed in states other than Delaware as well as the related topic of exclusive forum selection clauses. Some wags refer to the ancillary phenomenon of cases being filed outside of Delaware as "ABC" (anywhere but Chancery).

Read more Delaware business litigation case summaries and commentary on Delaware Corporate and Commercial Litigation Blog, a blog hosted by Francis G.X. Pileggi, of Fox Rothschild LLP.

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