Delaware Supreme Court Upholds Constitutionality of SB21 Safe Harbor Amendment
On February 27, 2026, the Delaware Supreme Court issued its decision in a major case concerning a constitutional challenge to a recent amendment to the state’s corporation law. In Thomas Drew Rutledge v. Clearway Energy Group LLC and Christopher Sotos and Clearway Energy Inc., Del. Ch., C.A. No. 25-0499 (Del. No. 248,2025), the Court, sitting en banc and ruling unanimously, upheld Senate Bill 21, which created corporate dealmaking safe harbor protections. The case has been closely watched in elite corporate circles, as the outcome could impact national mergers and boardroom battles.
Morris Nichols attorneys represented two groups of amicus curiae and prepared amicus briefs in support of SB21’s constitutionality.
Partner John DiTomo prepared the amicus brief in support of SB21’s constitutionality filed in the case on behalf of seven corporate law scholars. “Amici submit this brief because they share two core beliefs: first, that Delaware’s corporation law is important to the orderly functioning of capital markets and, second, it is critical to ensure that the General Assembly be permitted to exercise its constitutional authority to continue to refine Delaware’s corporation law in the manner it determines is appropriate, ensuring that Delaware’s corporation law remains optimal for those market participants who choose to charter their corporations in this state.”
Partners Bill Lafferty and Lauren Neal submitted the amicus brief on behalf the Society for Corporate Governance, which advocated for the constitutionality of the safe harbor provisions. “In the Society’s view, SB 21’s safe harbor provisions fall squarely within the General Assembly’s authority to shape corporate law, including the scope of directors’ fiduciary obligations. The General Assembly has long played an integral role in articulating and refining the contours of corporate governance standards. SB 21’s safe harbor provisions reflect a measured continuation of that tradition, offering needed clarity to directors and the companies they serve, and thereby reinforcing stability in the corporate governance system.”