Federal Courts Take The Wheel: The Delaware Supreme Court Validates Federal Forum Provisions for '33 Act Litigation in Salzberg v. Sciabacucchi

This Note examines the Delaware Supreme Court’s decision in Salzberg v. Sciabacucchi and argues that the court correctly upheld federal forum provisions (FFPs) requiring claims under the Securities Act of 1933 to be filed exclusively in federal court. The decision arose in response to the increased use of state courts for Securities Act litigation following Cyan, Inc. v. Beaver County Employees Retirement Fund, which confirmed concurrent state and federal jurisdiction over such claims. Through an analysis of the Delaware General Corporation Law, the internal affairs doctrine, federal securities regulation, and recent Delaware corporate law developments, this Note contends that FFPs fall within the permissible scope of corporate charter provisions because Securities Act claims occupy an intermediate category of “intra-corporate” matters that are neither purely internal affairs nor wholly external claims. The Note rejects criticisms that the decision improperly expands Delaware corporate law or undermines congressional intent, arguing instead that it is consistent with both federal precedent and Delaware’s longstanding commitment to private ordering. The Note further concludes that validating FFPs promotes judicial efficiency, reduces duplicative state and federal litigation, lowers litigation costs borne by corporations and shareholders, and provides greater predictability in securities litigation while preserving shareholders’ ability to pursue meritorious federal securities claims. [This abstract was written by Microsoft Copilot, a generative artificial intelligence.]