Manufacturing Mystery: A Response to Professors Carney and Shepherd's "The Mystery of Delaware Law's Continuing Success" (with Hon. William B. Chandler III)
In this Article, Chandler and Rickey respond to Professors Carney and Shepherd’s The Mystery of Delaware Law’s Continuing Success. While Carney and Shepherd argue that the indeterminacy and instability of Delaware corporate law compares unfavorably with the Model Business Corporation Act, Chandler and Rickey show that the comparison made by Carney and Shepherd is an unfair one. Instead of comparing Delaware law with the Model Act as it is practiced in other jurisdictions, Carney and Shepherd compare Delaware law with the bare text of the Model Act.
Chandler and Rickey examine the data provided by Carney and Shepherd and conclude that Delaware’s success is not such a mystery. First, they compare appeal and reversal rates of other jurisdictions with those of Delaware. Their findings do not support Carney and Shepherd’s conclusion that Delaware’s reversal rate is “relatively” high. Next, they consider several of Carney and Shepherd’s qualitative claims of the Model Act’s doctrinal superiority and demonstrate that the Model Act becomes much less certain when applied in real-world cases. Finally, they address Carney and Shepherd’s assertion that Delaware law leads to unnecessary cost and delay in litigation and show that this conclusion is based upon unreliable and incomplete data.
Based on their analysis, Chandler and Rickey are able to explore several weaknesses in Carney and Shepherd’s conclusions. Although Chandler and Rickey do not claim that Delaware law is superior to that of other states, this Article provides a sound basis for understanding Delaware law’s continuing success.