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Thursday, January 23, 2014

Courts - "U.S. Supreme Court asked to review Delaware's 'secret trials' case" [Updated]

Tom Hals's Jan. 21st Reuters story begins:

Delaware asked the U.S. Supreme Court on Tuesday to review a lower court decision that stopped the state's nationally important business court from overseeing private arbitrations, a process critics compared to secret trials.

The U.S. Court of Appeals in Philadelphia upheld in October a ruling that found the five judges on Delaware's Court of Chancery had violated the U.S. Constitution by overseeing private arbitrations in their courtrooms.

All court filings and even the existence of the cases was secret.

Later in the story:
Fees associated with incorporating businesses accounts for as much as 40 percent of Delaware's general budget.
Here is a story, also by Tom Haps, from Oct. 23, 2013, that begins:
(Reuters) - Delaware's legal industry suffered a blow when a federal court found on Wednesday the state violated the U.S. Constitution with its novel system of allowing judges to arbitrate private business disputes, which critics called secret trials.

The U.S. Court of Appeals for the Third Circuit found private arbitrations taking place in Delaware's highly respected Court of Chancery violated the First Amendment of the U.S. Constitution.

"Allowing public access to state-sponsored arbitrations would give stockholders and the public a better understanding of how Delaware resolves major business disputes," wrote Judge Dolores Sloviter in a 2-1 ruling.

The 37-page ruling contained three opinions. Judge Julio Fuentes wrote a concurring opinion, but took a narrower view that secrecy was a problem but involving judges in arbitration was not. Judge Jane Roth dissented and called Delaware's system a "perfect model for commercial arbitration."

[Updated at 1:45 PM] Liz Hoffman has this post at the WSJ Law Blog, including links to the documents.

Posted by Marcia Oddi on January 23, 2014 09:20 AM
Posted to Courts in general