Mesa had been founded in 1956 by legendary oilman T. Boone Pickens; and by the 1980s, Pickens had become a well-known corporate raider in the oil and gas industry, i.e. someone who acquires struggling companies at a discount, and then sells off their assets for a profit.

Pickens' reputation was so ominous that whenever he set his sights on an acquisition target, that company's board would usually pay him 'greenmail' to leave them alone.

But Unocal's Board of Directors wasn't having any of that.

So once Pickens announced his takeover offer, Unocal's Board launched what has become known as a "poison pill".

Poison pills are corporate tactics that a company employs in order to make a hostile takeover as difficult as possible; they can take a variety of different forms, but in general they are legal remedies designed to deliberately injure the hostile bidder.

Pickens sued Unocal immediately in Delaware's Court of Chancery—a specialty court in Delaware that exclusively hears corporate cases.

Pickens initially won the case; the court ruled that Unocal's Board has the responsibility to treat all shareholders equally, and therefore it was illegal to launch a plan that would specifically injure Mesa/Pickens.