The Delaware Court of Chancery's confidential and
expedited arbitration procedure, in which selected disputes are heard before a
member of the Court at a final hearing within 90 days of a complaint being
filed, as described in a prior post here,
have been challenged
in a federal lawsuit that was filed in October to contest the constitutionality
of the procedure. The Court of Chancery sits in Wilmington in the New
Castle County Courthouse pictured below at the left.
The Court of Chancery Courthouse in Georgetown is
featured in the photo below at the right. The Court of Chancery also sits in
Dover. Due to the recusal of all the members of the U.S. District Court
for the District of Delaware, the case is being heard be federal judge Mary
McLaughlin of the U.S. District Court for the Eastern District of Pennsylvania,
sitting in Philadelphia. Prof.
Brian J.M. Quinn wrote about an oral argument in the case before Judge
McLaughlin recently in which she expressed some skepticism about the alleged
secrecy of the arbitration conducted by members of the Court of Chancery.
Marcus of The Deal wrote about the hearing as well. Sean
O'Sullivan of the Wilmington News Journal also discussed the arguments
that both sides made to the federal court. Reportedly, only about 6 cases
have taken advantage of this procedure in the more than two years since it has
The actual rules allowing for confidential
arbitration by one of the five members of Delaware's court of equity, are
Key points about the relatively new procedure and rules include the
(Parenthetically, the fact that a decision on the
validity of a procedure used in a Delaware state court, is being made by a
judge in Philadelphia may be indicative of the overlapping business and
cultural ties between Wilmington and the birthplace of U.S. independence about
30 miles north of Wilmington. Though the customs, standards and "unwritten
rules" of practicing law differ greatly in Wilmington compared to Philadelphia,
there is a substantial amount of "cross-pollination" that occurs from lawyers
and firms-and businesses-that operate in both cities.)
Read more Delaware business
litigation case summaries and commentary on Delaware
Corporate and Commercial Litigation Blog, a blog hosted by Francis G.X.
Pileggi, of Eckert Seamans.
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