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Judy Greenwald

Supreme Court won't hear Del. chancery court's public arbitration dispute

March 25, 2014 - 3:27pm


The U.S. Supreme Court has refused to consider an appellate court ruling that would permit public arbitration proceedings in Delaware.

In 2009, Delaware amended its statutory code to grant the state's Court of Chancery the power to arbitrate business disputes, according to a May 2013 ruling by the 3rd U.S. Circuit Court of Appeals in Philadelphia in Delaware Coalition for Open Government v. Strine.

The litigation had been filed in U.S. District Court in Wilmington, Del., by the Montchanin, Del.-based open government watchdog group which is opposed by a group of Delaware judges.

Both the statute and regulations governing Delaware's proceedings bar public access, and arbitration proceedings are considered confidential, according to the ruling.

The District Court, however, held that the confidentiality of Delaware's government sponsored arbitration proceedings violated the First Amendment of the U.S. Constitution, and a three-judge panel of the 3rd Circuit agreed in a 2-1 ruling.

“We have recognized that public access to judicial proceedings provides many benefits, including … promotion of informed discussion of governmental affairs by providing the public with the more complete understanding” of the proceeding, said the majority opinion.

“The benefits of openness weigh strongly favor of granting access to Delaware's arbitration proceedings. In comparison the drawbacks of openness that appellants cite are relatively slight,” the appellate ruling said.

The U.S. Supreme Court on Monday rejected the Delaware judges group's effort to seek consideration of the case without comment.

More than half of all publicly traded companies are domiciled in Delaware, including 64% of Fortune 500 companies, according to the sates' division of corporations.

 



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