On March 18, 2020, in a landmark ruling in Salzberg v. Sciabacucchi, No. 346, 2019 (Del. March 18, 2020), the Delaware Supreme Court upheld the validity of provisions included in a Delaware corporation’s certificate of incorporation that require shareholders of that corporation to sue in federal court, rather than state court, over alleged violations of the Securities Act of 1933 (the Securities Act). (For more details on the Salzberg decision, see Michael G. Bongiorno, et al., Delaware Supreme Court Upholds Validity of Federal Forum Provisions in Landmark Ruling, March 19, 2020).

This much-anticipated decision provides Delaware corporations with a new tool—a federal-forum provision—to exercise control over the venue for Securities Act litigation, thereby avoiding duplicative litigation filings and steering cases to federal courts more accustomed to hearing federal securities claims. But, now that the dust has had a chance to settle, many corporations and practitioners are asking themselves, what are the limitations to this ruling? This article explores what the Salzberg decision resolved and what still remains an open question.

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