Bloomberg Law recently covered the volume of records litigation going on in Delaware’s Chancery Court. These paragraphs frame the rise:

Records suits, which require only preliminary suspicions, are designed to resolve narrow disagreements over how to enforce a core shareholder right. But Delaware’s judges are spending significant chunks of time policing the process, as in recent fights over Amazon.com Inc’s antitrust woes, Boeing Co.’s safety scandals, and the $8 billion Paramount Global-Skydance Media merger.

“Nobody’s happy with the state of affairs,” said Widener University law professor Lawrence Hamermesh. “It’s a mess.”

Everyone involved would rather be doing something more substantive, but they’re responding rationally to structural incentives, Chancellor Kathaleen St. J. McCormick, the court’s chief judge, said at George Washington University. Although getting inside information offers clear advantages, “complaints just get longer and longer,” she said Oct. 25. “I’m not sure I need all that at the pleading stage, but it’s not hard to see why they’re doing it, and I can’t advise against it.”

Shareholder attorneys blame the logjam on board stonewalling, while companies say the ballooning cost is affecting settlement leverage. “Shareholders aren’t in the engine room every day, so there was wisdom in making sure they get this information,” said GWU law professor Omari Scott Simmons. “But there were unintended consequences.”

When I think about this issue, I suspect that the litigation volume may be a bit like the tip of an iceberg for companies responding to these requests. We can easily see and observe the litigation, but we don’t see the total time and expense associated with record requests.

Consider the issue from the perspective of a harried in-house lawyer with a full workload already. A records request shows up. The letter probably cites case law that the in-house attorney may not be closely familiar with. The next call will probably be to hire outside counsel for advice. That’s not cheap.

What I don’t know or know how to observe is what percentage of the time the company will simply pull together and send over records. That process will involve some expense, but it’s probably not too bad to do it once. But what about companies that get more requests? The costs pile up.

Nevada takes a different approach and doesn’t allow random shareholders to bring these actions for public companies. By avoiding the need to comply with requests, Nevada corporations can entirely avoid the expense. This approach comes with a tradeoff. It makes it harder for shareholder plaintiffs to obtain information that might allow them to win claims.

What’s the right solution here? It could be somewhere in the middle. It might make sense for a state define a range of easily collectible documents that should be maintained and made available upon request. Allowing shareholders to get ahold of more documents might be gated or balanced with some fee-shifting provision. I don’t know the right answer here, but it’s worth thinking about and finding some ways to study.