The Future of Corporate Federalism: State Competition and the New Trend toward De Facto Federal Minimum Standards

What sensible compromise can be struck between Bill Cary\u27s and Ralph Winter\u27s views of the competition among states for corporate charters? This is the relevant question to ask in response to Professor Romano\u27s stimulating paper, because if one ends in an intermediate position between Cary and Winter (as she does and as I do), then one needs to focus on the protections shareholders should be accorded both to protect them from exploitation at the hands of a state pursuing tax revenues and from excessive regulation by a state whose regulatory efforts are intended in fact to realize ulterior objectives unrelated to shareholder wealth maximization. In this response, I will suggest one approach that attempts to update a reform proposed by Bill Cary in his famous article on Federalism and Corporate Law, but does so in order to accommodate the rival insights offered by Ralph Winter. While I would not defend everything Bill Cary said in his influential article, I find it ironic that in a quiet, low-visibility way we are today witnessing the promulgation of new types of federal minimum standards that significantly regulate public corporations and constrain state law. Although no political program is less likely to be attained than federal chartering, Bill Cary\u27s alternative-federal minimum standards-appears to be succeeding even as it is being ignored