Not here, Chancellor

Written by  //  November 24, 2012  //  Corporate Law and Business  //  1 Comment

 [ A guest post by Jeet H. Shroff, LL.M. Candidate, Harvard Law School]

Last week, the Delaware Supreme Court issued, what the New York Times termed as an “unusual rebuke” to Chancellor Strine of the Delaware Court of Chancery, arguably one of the most influential corporate courts anywhere in the world. For decades now, corporate jurisprudence emerging from Delaware has shaped corporate law in the United States and influenced corporate policy and commercial courts across the globe. Last week though, Chancellor Leo Strine, Jr., the first amongst equals on the Chancery Court bench came under heavy fire from the Delaware Supreme Court for using one of his opinions as “a platform from which to propagate individual world views on issues not presented.” In a no-holds-barred attack, the Delaware Supreme Court criticised the Chancellor for abusing the purpose of a judicial opinion by using it to express his ruminations on the proper direction of Delaware law, an act better reserved for “law review articles, the classroom, continuing legal education presentations, and keynote speeches”. While at least one news network attributed the hectoring stricture to the personal differences of opinion between Chief Justice Steele of the Delaware Supreme Court and Chancellor Strine, the move, apart from spotlighting Chancellor Strine’s colorful courtroom persona, raises important issues on the extent to which judges may use judicial dicta to comment on legal policy.

Of the many illustrious judges to have served on Delaware’s famous court, Chancellor Strine justifiably lays claim to being amongst the most visible and recognised chief judge in recent memory. Having started his career as a corporate litigator at Skadden, Arps, Slate, Meagher & Flom, he became Counsel to Delaware Governor Thomas R. Carper, who appointed him to the Chancery Court where he eventually rose to become Vice-Chancellor before rising to the top spot. Known for his sharp wit and sharper analyses, Chancellor Strine lays claim to authoring more than one landmark decision in a relatively short span of time, including the decision IBP v Tyson Foods where he crafted a holistic (read deal-friendly) review standard for determining when undisclosed adverse financial information qualifies as having a deal-breaking material adverse effect. But apart from his meteoric rise, this isn’t the first time Chancellor Strine has expressed his world views in a judicial opinion.  In Cox Communications, another outstanding decision, he attempted to make sense of the two divergent standards frequently invoked for reviewing transactions involving takeovers by controlling shareholders. That digression, in a case which was actually concerned with the appropriate quantum of legal fees to be paid in such deals, now forms the basis for most contemporary discussion on the issue and is regarded as an outstanding contribution to legal doctrine. Notwithstanding the strategic implications of the Supreme Court’s unmitigated diatribe therefore, Chancellor Strine’s reputation as one of America’s foremost corporate minds is firmly secure and deservedly entrenched. And as someone who attends his marquee Mergers and Acquisition class at Harvard, I can attest, that his incisive legal analysis combined with a quirky sense of humour make for an outstanding classroom experience.

But behind the more interesting story of Chancellor Strine lies a less snazzy legal issue of comparative importance. In publicly hauling up the Chancellor of the country’s most celebrated corporate court, the Delaware Supreme Court has sent out a clear message – dicta, even when judicial, is not appreciated. The Supreme Court would much rather have Delaware judges express their personal views in law review pages and classroom presentations, than in their written opinions. As a relative outsider to the American legal world, three thoughts immediately come to mind.

First, the Supreme Court’s advice is testament to the extent to which the law review culture is entrenched in American legal thought and training. As a rule, the best American legal minds appear to write extensively. Academic writing in general and writing by judges in particular, far from being frowned upon, is welcomed as being the apposite place for discussions on legal standards as against judicial opinions, which must express clear, actionable legal rules.

Second, a statement by the Delaware Governor’s official spokesman reiterating his faith in Chancellor Strine was immediately after the Supreme Court’s rebuke. That the Governor should comment on what is essentially an issue of judicial discipline, is an indication of how closely the political class appears to follow the judicial process even in the case of tenured appointees.

Third, the robust and incisive news reporting that followed, indicates an informed and a fearless media, which apart from being accurate, is not hemmed in by fears of being in contempt of arguably two very powerful courts. The day when knowledge of individual judicial predilections, will inform non-legal news analysis, seems a disconcerting distance away in India. But there are important lessons of institutional checks and balances, for our legal system in each of these trends. Lessons, on what a well functioning polity should look like, even when the real issue at hand perhaps stems from little more than a principled difference in opinion.

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About the Author

Arghya is currently doing the doctorate in law at the University of Oxford. Dithering between academia and litigation for a future career but sanguine in Oxford with his current researcher status.

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One Comment on "Not here, Chancellor"

  1. Heena March 31, 2015 at 12:45 pm ·

    Good news what the “New York times”

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