Two years ago, I published a paper challenging the internal affairs doctrine and arguing that it should be relaxed in various ways. I didn’t exactly intend that to play out as it has with respect to Texas – as I blogged here and here – and now there’s a new lawsuit against United Airlines to add to the mix.

United Airlines is incorporated in Delaware, but it is headquartered in Illinois.  The National Center for Public Policy Research, as the owner of 123 United Airlines shares, has sued the company in Illinois, alleging that under Illinois’s inspection statute, it is entitled to internal records regarding United’s decision to limit flights to Tel Aviv. The NCPPR is explicitly choosing not to seek inspection under Delaware law, on the ground that the changes to Delaware’s inspection statute wrought by SB 21 would make such a demand futile.  Instead, NCPPR argues that inspection rights are outside the scope of the internal affairs doctrine, and therefore United is subject to Illinois’s inspection statute.

It seems that almost immediately after the lawsuit was filed, United reversed course and resumed Tel Aviv flights, but as far as I know, the lawsuit is…

First up, we have a couple of cases out of the New York Court of Appeals, Eccles v Shamrock Capital Advisors, LLC, 245 N.E.3d 1110 (N.Y. 2024), and Ezrasons Inc v. Rudd, 2025 WL 1436000 (N.Y. May 20, 2025).  So, there’s a backstory here.  New York, like California, has what’s known as an “outreach” statute.  Passed in 1961, New York Business Corporation Law § 1319 says that various provisions of New York’s corporate code “shall apply to a foreign corporation doing business in this state, its directors, officers and shareholders.”

Now, on its face, this statute would suggest that New York does not strictly adhere to the internal affairs doctrine, and would in fact apply New York corporate governance law for companies doing business in the state.  But, in fact, lower New York courts have previously held that the statute does not mean what it says, and have gone on to apply the internal affairs doctrine anyway.  See, e.g., Potter v. Arrington, 810 N.Y.S.2d 312 (Sup. Ct. 2006).

Matters recently came to a head.  In Eccles, the New York Court of Appeals held that the internal affairs doctrine would apply unless “(1) the…

The Association of American Law Schools Section on Leadership, for which I serve as Chair this year, is hosting the program described below tomorrow on scholarship in the area of lawyer leadership. Business law and leadership are a natural fit, and each time we argue for change through our scholarship, we are assuming a role of leadership in law. Yet, many of us never expressly acknowledge that connection in our research and writing.

Moreover, many of us may not talk about lawyer leadership in our classrooms or assign law leadership scholarship to our students. Yet, our students begin to lead in the law and otherwise develop their professional identities while we are teaching them in law school. Encouraging and guiding that part of our students’ journey into lawyering is, in my view, one of the great joys of being a law faculty member.

The section is excited to offer this program featuring national experts on law leadership who engage in research and writing relating to that field. Come and listen in to learn how the scholarship of lawyer leadership may matter to you and your work. Links to further information and registration are included below.

Advancing Lawyer Leadership: Why Scholarship

Seitz noted the Nevada news in his remarks, but noted that

As the BLPB’s ostensible Monday blogger, I have written in many years past on and about Memorial Day and other Monday holidays. I try to take a business-related approach, when possible. Last year, for example, I posted used an artificial intelligence approach to comment. In 2023, I took a more personal angle, reflecting on a family member–a civilian–who lost his life working in enemy territory in World War II. The holiday is so important! Yet, each year, I struggle a bit to find a new connection that may be of interest to readers. Of course, the main message is that it is important to remember those who have sacrificed their lives for our country . . . .

I should be asking my co-blogger Marcia to author today’s post. On LinkedIn, she wrote about her father, who died earlier this year. She noted that while he did not die on the battle field, he did suffer and die as a result of his military service. This type of sacrifice is among the many we should and do remember on Memorial Day.

Although not all businesses close on Memorial Day, those that do offer all of us the…

Earlier tonight, the Nevada Senate voted unanimously to pass AB239, introduced by Nevada Assemblymember Joe Dalia. The legislation was put forward by the Nevada State Bar’s Business Law Section. The State Bar’s explanatory memorandum summarizes the changes. Although it has not yet been signed by Governor Lombardo, I expect that it’s legislation he’ll be happy to sign.

I’ll cover three changes here: (1) jury-trial waivers; (2) controlling stockholder duties; and (3) merger approvals.

Bench Trial Elections

This is how the Nevada Business Law Section explained the change:

The proposed amendments to NRS 78.046 are designed to address the ability of a corporation to waive jury trials with respect to “internal actions” (as defined by NRS 78.046(4)(c)). In other words, the corporation can essentially require that such actions be heard only before a judge rather than before a jury. This amendment is aimed at providing additional predictability with respect to the resolution of internal actions, and will also give some comfort to companies considering a move to Nevada, since jury trials are unavailable for cases heard in the Delaware Court of Chancery.

One of Delaware’s advantages has been that Chancery only has bench trials. The possibility…

It’s frequently been observed that (perhaps until recently) Delaware’s real competition was not horizontal, but vertical – if Delaware did not at least appear to be meting out appropriate corporate discipline, the federal government would step in to preempt its law.  Right now, however, we’re seeing a full on horizontal race to the bottom, as Texas, Delaware, and Nevada compete to absolve corporate managers of any fiduciary liability.  All three states could, of course, just say that – explicitly provide that shareholders have no cause of action for fiduciary breach – but all three (especially Texas and Delaware) feel the need to create a maze of procedural limitations on shareholder action that collectively add up to eliminating litigation rights without saying as much in so many words.  All of which provides support for the argument I made in my paper, The Legitimation of Shareholder Primacy, that the rules are intended as a display to the general public in order to create the illusion that limits are being placed on managerial power. 

One possibility I raise in the paper (which was actually drafted before SB 21, though I’ll update it eventually) is that we are in a moment when…