Delaware Court of Chancery

The U.S. Supreme Court has rejected a petition of certiorari from the Delaware Court of Chancery to consider reinstating secret arbitrations in corporate litigation exceeding $1 million, The Legal Intelligencer's Jeff Mordock reports. Lower courts said the law violated the right of the public to access court proceedings.

Yale Law Professor Judith Resnik opined in the New York Times against Delaware's effort to fight against the growing market in private dispute resolution by allowing litigants to use Delaware's chancery judges for secret arbitrations if the businesses had at least $1 million at stake, paid $12,000 in filing fees and paid $6,000 per day: "The Delaware legislation is a dramatic example of rich litigants using their resources to close court systems that taxpayers support and constitutions require. But the problem goes beyond Delaware. To honor constitutional commitments that 'all courts shall be open,' the court should refuse the Delaware judges’ request, and Congress should restore rights to public courts for consumer and employment disputes." A split Third Circuit ruled against the constitutionality of the program, and the Delaware Court of Chancery is seeking certiorari with the U.S. Supreme Court.

The Delaware Coalition for Open Government is arguing to the U.S. Supreme Court that it should not take up a case in which the Delaware Court of Chancery is trying to reinstate its secret, confidential arbitration program, my former colleague, Delaware Business Court Insider's Jeff Mordock, reports. "'Judicial arbitrators are deciding the substantive legal rights of the parties,'" the coalition's attorney argued, DBCI reports. "'That is a core basis for the First Amendment right of public access.'" The chances of the petiton being granted are 3.8 percent, DBCI concludes.
 

Delaware Business Court Insider's Jeff Mordock reported this week on Leo E. Strine Jr.'s confirmation as the chief justice of the Delaware Supreme Court. While Delaware is a preferred forum for America's corporations, one thing that struck me about Jeff's coverage is that Strine said he plans to focus on family court, which is an often overlooked area of law: "'One of the things I never forget is how important Family Court is. The Justice of the Peace Court comes into contact with more Delaware residents than any other court. The challenge of delivering the high-quality justice our court has done with limited resources is a daunting one and I'm committed to giving my all to do that. My background has positioned me well to understand the challenges of my colleagues in the other courts."'

Strine also defended the Court of Chancery's confidential arbitration program against the argument that it violates the First Amendment. Delaware is appealing to the U.S. Supreme Court in a last-ditch attempt to reinstate the program after the Third Circuit struck it down.

Leo Strine, current chancellor of the Delaware Court of Chancery, has been nominated to lead the Delaware Supreme Court, Delaware Law Weekly's Jeff Mordock writes in a more indepth report on this week's development: "'Strine heads the most important business court in the world,' said Thomas J. Reed, a professor at Widener University School of Law, after the chancellor had submitted his application. 'He's been there for a long time and the Delaware Supreme Court's docket is driven by filings and decisions from the Chancery Court. He knows business law inside and out and that gives him a tremendous edge,'" Mordock reports.

The epicenter of corporate law has a new leader. The Wall Street Journal reports that Leo Strine, the colorful and outspoken head of the Court of Chancery, is going to be nominated to lead the Delaware Supreme Court.

The Third Circuit has ruled that the Delaware Court of Chancery's private arbitration program violates the public's First Amendment right to access court proceedings, The Legal Intelligencer reports. The panel was divided 2-1.

"Allowing public access to state-sponsored arbitrations would give stockholders and the public a better understanding of how Delaware resolves major business disputes," according to The Legal's account of the majority opinion. "Opening the proceedings would also allay the public's concern about a process only accessible to litigants in business disputes who are able to afford the expense of litigation. In addition, public access would expose litigants, lawyers and the Chancery Court judge alike to scrutiny from peers and the press."