Saturday, July 19, 2014

Drama on the Delaware Supreme Court

As Haskell Murray previously noted, after Justice Jack Jacobs of the Delaware Supreme Court announced his retirement, Governor Jack Markell quickly nominated a replacement – Karen Valihura – who would be only the second woman justice in the Court’s history.  Valihura was confirmed on June 25.

But shortly after Justice Valihura’s nomination was announced, Justice Carolyn Berger – Delaware’s first woman justice – announced her own retirement.  Subsequently, Justice Berger stated that she was retiring because Governor Markell had not taken her seriously as an applicant for the Chief Justice slot, which was eventually filled by Leo Strine.  She further stated that women face an uneven playing field in judicial nominations in Delaware.

I won’t even begin to speculate about the truth behind Justice Berger’s comments, but I will say that these issues highlight, for me, the extremely problematic nature of Delaware’s dominance in shaping the nation’s corporate law.  Most public companies are incorporated in Delaware; companies reincorporate in Delaware when they expect to undergo large transactions likely to be challenged by shareholders, and other states tend to follow Delaware’s lead when interpreting their own law.  (In response to a claim that Delaware is only one state, Stephen Bainbridge rejoined with "Which, in context, is sort of like saying Delaware is only one 800-pound gorilla.")

It’s an old issue, and scholars have extensively debated the substantive merits of Delaware’s law.  But my concern is a democratic one:  I am deeply troubled by the suggestion that sexism may play a role in who gets nominated to such an important court (which I take to be Justice Berger's implication), but I don’t get a vote in Delaware.  I have no voice.  Even though Delaware’s law has national implications, and its judiciary is incredibly important in shaping national policy, I cannot express my views at the ballot box.

The importance of Delaware’s corporate law is even more apparent in light of decisions like Citizens United and Hobby Lobby.  As Elizabeth Pollman observed, the Supreme Court seems to be placing a lot of weight on the mechanisms of state corporate law, and shareholder democracy, to decide complex political and moral issues.

For example, shareholder voting mechanisms, the Court is confident, will control corporate speech, including campaign donations.  State corporate law may decide whether a director does – or does not – violate fiduciary duties to the corporation when he places religious concerns among profit motive (assuming, of course, that the First Amendment does not mandate a particular outcome).  State corporate law may decide required disclosures regarding the religious attitudes and intentions of controlling shareholders.  

The Supreme Court has delegated these decisions to the states – and in no small part, that means to Delaware, which houses about 3% 0.3% of the nation’s population.*

If Delaware is going to have that kind of power, I want a vote.

 

*that'll teach me to do math on Saturdays

http://lawprofessors.typepad.com/business_law/2014/07/drama-on-the-delaware-supreme-court.html

Ann Lipton | Permalink

Comments

You will have a hard time convincing anyone familiar with Delaware corporate law opinions that Berger is even in the same league as Strine. If that is the case, and I think it clearly is, then Berger's complaints sound like sour grapes from someone who was not as qualified as the person chosen. On the other hand, there were a fair number of male candidates for Valihura's position, who were at least as qualified, if not more qualified, than Valihura, and got passed over. Some in Delaware think that Valihura would not have received the position, and may not have even been considered, had she been male. Personally, I think Valihura was well-qualified for the position, though I am not certain that she would have received the nomination if she had been male. Not sure whether you are suggesting a national election for Delaware judges, but I am not sure if that would result in more women on the bench with the available candidates.

Posted by: MikeH | Jul 20, 2014 1:23:23 PM

Well, as I said, my point isn't really to comment on the truth of her allegations, let alone Valihura's qualifications. My point is that the selection of judges in Delaware is of enormous importance, and most of the country has no influence - even if we perceive there to be a problem. I'm not suggesting national election of Delaware judges (or any other judges, for that matter) - but if, say, i wanted to write to the governor of Delaware and express a preference that he nominate a woman to replace Justice Berger, I would essentially have no voice - I'm not a constituent, and he has no reason to listen to me.

Posted by: Ann Lipton | Jul 20, 2014 1:29:56 PM

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