American corporate law scholars have long focused on state-to-state
jurisdictional competition as a powerful engine in the making of American
corporate law. Yet much corporate law is made in Washington, D.C. Federal
authorities regularly make law governing the American corporation, typically via
the securities law—from shareholder voting rules, to boardroom composition, to
dual class stock, to Sarbanes-Oxley—and they could do even more. Properly
conceived, the United States has two primary corporate lawmaking centers—the
states (primarily Delaware) and Washington. We are beginning to better
understand how they interact, as complements and substitutes, but the
foundational fact of American corporate lawmaking during the past century is
that whenever there has been a big issue—the kind of thing that could strongly
affect capital costs—Washington acted or considered acting. Here I review the
concepts of the vertical interaction, indicate what still needs to be examined, and
examine one Washington-Delaware interaction in detail over time. Overall, we
cannot understand the governmental structure of American corporate lawmaking
well just by examining the nature, strength, and weaknesses of state-to-state
jurisdictional competition.