Friday, October 19, 2012

Delaware Chancery Arbitration Scheme Declared Unconstitutional

I’ve taken a bit of a vacation from blogging. I’m back now. This blog is about the Delaware Chancery Court statute authorizing the Chancery court judges to sit as arbitrators. Authorizing sitting judges to serve as arbitrators and issue private decisions. Remarkable.

This was a statute so off the wall that I blogged aboutit last November
The system was designed to allow large corporate litigants to use the Delaware Chancery court system to litigate in secret – cases were not even docketed – and still get a decision by a judge from the Chancery court.  And to allow the judges to receive large fees as arbitrators. 

As I wrote then, the Delaware Coalition for Open Government saw the statute as unconstitutional and sued the five Chancery judges in Federal District Court challenging the scheme. The complaint argued that the statute unconstitutionally violates the First Amendment’s qualified right of access to civil and criminal trials. 
Thankfully, U.S. District Court Judge Mary McLaughlin agreed that this scheme is unconstitutional, and held on the pleadings that:

Under the Delaware law and Chancery Court rules, a sitting judge of the Chancery Court, acting pursuant to state authority, hears evidence, finds facts, and issues an enforceable order dictating the obligations of the parties. The Court concludes that the Delaware proceeding functions essentially as a non-jury trial before a Chancery Court judge. Because it is a civil trial, there is a qualified right of access and this proceeding must be open to the public. (DELAWARE COALITION FOR OPEN GOVERNMENT v. HONORABLE LEO E. STRINE, JR., et al.CA No. 1-11-1015)

While it is likely that this case will be appealed, what do you think the odds are that the Third Circuit will reverse the decision? 

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