| Delaware Court of Chancery | |
|---|---|
 | |
| Established | 1792 |
| Authorized by | Delaware Constitution art. IV |
| Appeals to | Delaware Supreme Court |
| Judge term length | 12 years |
| Number of positions | 7 |
| Website | Official website |
The Delaware Court of Chancery is a court of equity in the U.S. state of Delaware. It is one of Delaware's three constitutional courts, along with the Supreme Court and Superior Court. Since 2018, the court consists of seven judges. The court is known for being a hub for corporate governance litigation in the United States, as two-thirds of Fortune 500 companies are incorporated in Delaware.
Connection to corporate law
Many companies prefer to incorporate in Delaware because of the state's corporate-friendly tax system and the Court's historical expertise in business litigation. The Court's judges tend to be longtime members of the Delaware State Bar Association who have spent their careers doing corporate litigation.[1]
Because of the extensive experience of the Delaware courts, Delaware has a more well-developed body of case law than other states, which serves to give corporations and their counsel greater guidance on matters of corporate governance and transaction liability issues. More than two thirds of Fortune 500 companies are incorporated in the state.[2] Delaware is the home to more than 1.8 million corporations, more than the number of residents in the state.
The Court of Chancery handle corporate internal affairs litigation (such as shareholder disputes and merger disputes) according the Delaware General Corporation Law, the statute governing corporations in Delaware. As a result, it is a hub for corporate litigation in the United States.
Judges
The chief judge is called the Chancellor, and the remaining judges are called Vice Chancellors. The chancellor and vice chancellors are nominated by the governor and confirmed by the state senate for 12-year terms. The Court is subject to the "major-party" rule in the Delaware constitution. Also known as the political balance requirement, this requires that the bare majority of the court "shall be of one major political party", and the other judges "shall be of the other major political party".[3] As a result, any person not affiliated with either the Republican or Democratic Party is not able to serve on the court.[4]
Jurisdiction
The Court's jurisdiction is a hybrid of constitutional provisions, statutes, and case law.
According to the Delaware Judicial Information Center:
The Court of Chancery has jurisdiction to hear and determine all matters and causes in equity. The general equity jurisdiction of the Court is measured in terms of the general equity jurisdiction of the High Court of Chancery of Great Britain as it existed prior to the separation of the American colonies. The General Assembly may confer upon the Court of Chancery additional statutory jurisdiction. In today's practice, the litigation in the Court of Chancery consists largely of corporate matters, trusts, estates, and other fiduciary matters, disputes involving the purchase and sale of land, questions of title to real estate, and commercial and contractual matters in general. When issues of fact to be tried by a jury arise, the Court of Chancery may order such facts to trial by issues at the Bar of the Superior Court of Delaware. (10 Del. C., 369).[5]
Article IV, Section 10 of the Delaware Constitution establishes the Court and provides that it "shall have all the jurisdiction and powers vested by the laws of this State in the Court of Chancery."[6] The Court has one Chancellor, who is the chief judicial officer of the Court, and four Vice Chancellors. It also has two Masters in Chancery, who are assigned by the Chancellor and Vice Chancellors to assist in matters as needed.
Equitable jurisdiction
Title 10, Section 341 of the Delaware Code states that the Court "shall have jurisdiction to hear and determine all matters and causes in equity."[7] Subsequent decisions have held that the Court's equitable jurisdiction is the same as that held by the English High Court of Chancery at the time of American independence in 1776.
The Court's most significant power is its ability to issue preliminary and permanent injunctions and temporary restraining orders. This is frequently exercised in the context of disputes involving mergers and acquisitions or sales of corporations, wherein a corporate suitor or a shareholder will attempt to enjoin—that is, prevent—the sale or merger of a corporation, claiming that their stock value has been diluted or that they have superior rights to purchase the corporation. In a typical sale or merger dispute, a plaintiff will seek a temporary restraining order, sometimes on an ex parte basis, to prevent the transaction from taking place and preserve the status quo. If the Court grants that relief, the plaintiff will then seek a preliminary injunction to maintain the current state of affairs until a trial can take place.
Title 10, Section 342 of the Delaware Code provides that the Court shall not hear any matters for which an adequate remedy exists at law or which can be heard by any other Delaware court.[7] As a practical matter, this means that the Court cannot grant relief in the form of money damages to compensate a party for a loss or where another court has coterminous jurisdiction. However, under the rules of equity, the court can grant monetary relief in the form of restitution by ruling that another party has unjustly gained money that belongs to the plaintiff.
Apart from its general equitable jurisdiction, the Court has jurisdiction over a number of other matters. First, the Court has sole power to appoint guardians of the property and person for mentally or physically disabled Delaware residents. Similarly, the Court may also appoint guardians for minors, although the Family Court has coterminous jurisdiction over such matters. Will contests and disputes over interpretations of trusts are also heard by the Court.
In 1952, the Court of Chancery held in Gebhart v. Belton that the operation of segregated school systems in Delaware was unlawful, two full years before the U.S. Supreme Court would do so in Brown v. Board of Education.
Procedure
The Chancellor is responsible for appointing a judge on the court to preside over a case.
The Court sits without a jury. All issues of fact are determined by the presiding Chancellor or Vice Chancellor. The Court has the discretion to appoint an advisory jury if it so desires, but this power is practically never exercised.
The Court of Chancery's decision can be appealed to the Delaware Supreme Court, whose decision is final unless appealed to the Supreme Court of the United States.
History
The history of the Court of Chancery stems back to the English common law system, in which separate courts were established to hear law and equity matters. English law courts included the Court of King's Bench (or Queen's Bench when the monarch was female), the Court of Common Pleas, and the Court of the Exchequer. The sole English court of equity was the Court of Chancery.
Along with the remainder of the original Thirteen Colonies, Delaware imported the English concept of common law. This included establishing a separate Court of Chancery. As the legal system evolved in England, the English Court of Chancery was eventually abolished by the Judicature Act 1873-75 and its powers merged into what was then called 'The Supreme Court of Judicature' (comprising the High Court and the Court of Appeal) which exercised jurisdiction in both common law and equity. This was prompted in part by similar reforms which had taken place elsewhere, notably the abolition of the New York Court of Chancery in 1847. Most American jurisdictions followed the reforms in New York and England.
In its first Constitution, the Delaware Constitution of 1776, there was no special provision for a court of equity. However, when the constitution was revised in the Delaware Constitution of 1792 a separate Court of Chancery was established. This constitution was heavily influenced by thinking of John Dickinson and George Read. William T. Quillen and Michael Hanrahan in their Short History of the Delaware Court of Chancery repeat the "folklore of the Delaware bench and bar, saying that the impetus for creating a Court of Chancery was to provide a new judicial seat for Delaware's first Chancellor, William Killen." Killen was the elderly and highly respected incumbent Chief Justice of Delaware, and when George Read was considered to be the new Chief Justice of Delaware, he refused unless adequate provisions were made for Killen. A separate Court of Chancery under Killen was the solution.[5]
Constitution of 1792
There was one chancellor, appointed by the governor for life.
| Name | Took office | Left office | Residence | Party |
|---|---|---|---|---|
| William Killen | October 6, 1793 | December 6, 1801 | Kent County | Democratic-Republican |
| Nicholas Ridgely | December 6, 1801 | April 1, 1830 | Kent County | Democratic-Republican |
| Kensey Johns Sr. | June 21, 1830 | January 18, 1832 | New Castle County | Whig |
Constitution of 1831
There was one chancellor, appointed by the governor for life.
| Name | Took office | Left office | Residence | Party |
|---|---|---|---|---|
| Kensey Johns Jr. | January 18, 1832 | March 28, 1857 | New Castle County | Whig |
| Samuel M. Harrington | May 4, 1857 | November 28, 1865 | Kent County | Democratic |
| Daniel M. Bates | December 12, 1865 | October 1873 | New Castle County | Democratic |
| Willard Saulsbury Sr. | November 14, 1873 | April 6, 1892 | Sussex County | Democratic |
| James L. Wolcott | May 5, 1892 | September 5, 1895 | Kent County | Democratic |
| John R. Nicholson | September 5, 1895 | June 10, 1897 | Kent County | Democratic |
Constitution of 1897
There is one chancellor, appointed by the governor for a 12-year term. There were also created over the years, additional vice chancellors, the first in 1939, a second in 1961, a third in 1984, and a fourth in 1989. Since 2018, there are six vice chancellors.[8] They are also appointed by the governor for a 12-year term. They are required to be equally divided between the major political parties, so that among all the chancellors no party has a majority of more than one person.
| Name | Took office | Left office | Residence | Party |
|---|---|---|---|---|
| John R. Nicholson | June 10, 1897 | June 10, 1909 | Kent County | Democratic |
| Charles M. Curtis | June 10, 1909 | July 2, 1921 | Republican | |
| Josiah O. Wolcott | July 2, 1921 | November 11, 1938 | Kent County | Democratic |
| William W. Harrington | December 7, 1938 | 1950 | ||
| Daniel F. Wolcott | 1950 | 1951 | Democratic | |
| Collins J. Seitz | 1951 | July 17, 1966 | ||
| William Duffy | July 17, 1966 | 1973 | ||
| William T. Quillen | 1973 | 1976 | ||
| William Marvel | September 1976 | May 1, 1982 | ||
| Grover C. Brown | 1982 | 1985 | ||
| William T. Allen | 1985 | 1997 | ||
| William B. Chandler, III | 1997 | 2011 | Sussex County | Republican |
| Leo E. Strine Jr. | 2011 | 2014 | New Castle County | Democratic |
| Andre Bouchard[9] | 2014 | 2021 | Democratic | |
| Kathaleen McCormick | May 6, 2021 | present | ||
| Name | Took office | Left office | Residence | Party | Seat |
|---|---|---|---|---|---|
| George B. Pearson Jr. | 1939 | 1946 | 1st | ||
| Collins J. Seitz | 1946 | 1951 | |||
| Howard W. Bramhall | 1951 | 1954 | |||
| William Marvel | 1954 | 1976 | |||
| Maurice A. Hartnett | 1976 | 1994 | |||
| Myron T. Steele | 1994 | 2000 | |||
| John W. Noble | November 2000 | February 2016 | Kent County | Democratic | |
| Joseph R. Slights III | March 28, 2016 | 2022 | Kent County | Democratic | |
| Nathan A. Cook | July 21, 2022 | present | |||
| Isaac D. Short | 1961 | 1973 | 2nd | ||
| Grover C. Brown | 1973 | 1982 | |||
| Joseph J. Longobardi | 1982 | 1984 | |||
| Joseph T. Walsh | 1984 | 1985 | |||
| Jack B. Jacobs | 1985 | 2003 | |||
| Donald F. Parsons | 2003 | 2015 | Democratic | ||
| Tamika Montgomery-Reeves | November 2015 | November 2019 | New Castle County | Democratic | |
| Paul Fioravanti Jr. | January 15, 2020 | present | |||
| Carolyn Berger | 1984 | 1994 | 3rd | ||
| Bernard S. Balick | 1994 | 1998 | |||
| Leo E. Strine Jr. | 1998 | 2011 | New Castle County | Democratic | |
| Sam Glasscock III | 2011 | present | Sussex County | Republican | |
| William B. Chandler III | 1989 | 1997 | Sussex County | Republican | 4th |
| Stephen P. Lamb | 1997 | 2009 | New Castle County | ||
| J. Travis Laster | October 9, 2009 | present | New Castle County | Republican | |
| Morgan Zurn | October 4, 2018 | present | New Castle County | Republican | 5th |
| Kathaleen McCormick | November 1, 2018 | May 6, 2021 | New Castle County | Democratic | 6th |
| Lori W. Will | May 26, 2021 | present |
The Court also employs three full-time Magistrates in Chancery, appointed by the Chancellor under Court of Chancery Rule 144. The Magistrates adjudicate cases assigned to them by the Court, with a particular focus on "the people's concerns in equity," such as guardianships, property disputes, and trust and estate matters.[10] The current Magistrates in Chancery are Selena E. Molina, Loren Mitchell, and Bonnie W. David.[11]
See also
Notes
- ↑ Gura, David (2022-07-13). "A centuries-old court in Delaware will decide if Elon Musk has to buy Twitter". NPR.
- ↑ Semuels, Alana (2016-10-03). "The Tiny State Whose Laws Affect Workers Everywhere". The Atlantic. Retrieved 2023-06-17.
- ↑ Epps, Garrett (2020-03-28). "Delaware's Weird—and Constitutionally Suspect—Approach to Judicial Independence". The Atlantic. Retrieved 2023-06-17.
- ↑ "Judge won't toss suit over Delaware court political balance". AP NEWS. 2022-09-25. Retrieved 2023-06-17.
- 1 2 "Welcome to the Delaware Court of Chancery". Delaware State Courts. Retrieved 2011-11-30.
- ↑ "§ 10. Composition and jurisdiction of Court of Chancery; initiation and decisions in causes and proceedings". State of Delaware Constitution: Article IV Judiciary. Online Delaware Code. Retrieved 2011-11-30.
- 1 2 "CHAPTER 3. COURT OF CHANCERY Subchapter III. General Jurisdiction and Powers". Title 10 Courts and Judicial Procedure. Online Delaware Code. Retrieved 2011-09-19.
- ↑ Hals, Tom (September 20, 2018). "Delaware governor nominates two for state's corporate court". Reuters.
- ↑ Melson, Brett (22 April 2014). "Andre Bouchard: Delaware Court of Chancery Chief". Retrieved 27 April 2016.
- ↑ "THE DELAWARE JUDICIARY ANNOUNCES A NEW MASTER IN CHANCERY". May 19, 2017. Archived from the original on 2017-05-28.
- ↑ "Judicial Officers - Court of Chancery - Delaware Courts - State of Delaware". courts.delaware.gov. Retrieved 2018-06-14.
References
- Munroe, John A (1993). History of Delaware. Newark, Delaware: University of Delaware Press. ISBN 0-87413-493-5.
- Conrad, Henry C (1908). History of the State of Delaware, 3 vols. Lancaster, Pennsylvania: Wickersham Company.