Two federal courts have held that the confidential arbitration procedures provided in the rules of the Court of Chancery are constitutionally infirm. We have previously written on these pages about the decision of the District Court, Delaware Coalition for Open Government v. Hon. Leo E. Strine, Jr., et al., D. Del. C.A. No. 1:11-1015 (Aug. 30, 2012), which was affirmed by a divided panel of the U.S. Court of Appeals for the Third Circuit, 733 F.3d 510 (3rd Cir. 2013). Now a Petition for Writ of Certiorari to the U.S. Supreme Court has been filed in an attempt to convince the nation’s highest court that Chancery should be permitted to provide the dispute resolution option that two lower federal courts found problematic. The rules are primarily designed for business disputes involving more than $1 million at stake. The proceedings are heard by sitting members of the court. The filings and the hearings are closed to the public. The federal courts found First Amendment violations with some of the aspects of the court’s procedures.
Details of the arbitration procedure have been highlighted on these pages at this link. Hat tip to Liz Hoffman of The Wall Street Journal and also to The Chancery Daily.
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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