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In a recent decision, the Delaware Supreme Court affirmed a ruling of the Delaware Superior Court that Delaware has a more significant relationship than California to a directors’ and officers’ liability insurance policy (D&O policy), at least when the dispute involves a Delaware corporation and its directors and officers. This case is part of a continuing trend in the case law showing a growing tension between Delaware courts and other state courts regarding important and consequential choice of law issues. See Christopher B. Chuff, et al., “Delaware Court of Chancery Tells California To Get Off Its Lawn,” Troutman Pepper Insights, (last updated Aug. 17, 2020); Joanna J. Cline, et al., “Court of Chancery Speaks on an Increasingly Common Choice of Law Issue,” Delaware Business Court Insider, (last updated Nov. 25, 2020).

Specifically, in RSUI Indemnity v. Murdock, (Del. Mar. 3, 2021), the Supreme Court considered whether the D&O policy at issue, which insured the directors and officers of a Delaware corporation but was negotiated and issued in California, should be interpreted under Delaware or California law. Justice Gary Traynor, writing for the court, concluded that Delaware has the most significant relationship to D&O policy disputes involving Delaware companies and, therefore, the court interpreted the policy in question under Delaware law.

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