Wednesday, October 23, 2013

Access to the Courts Includes Arbitration Proceedings, Divided Third Circuit Panel Holds

 The First Amendment includes a right of public (and press) access to trials.  But what is a "trial"?  Or, as the Third Circuit considered in its opinion in Delaware Coalition for Open Government v. Strine, is there a right of public access to a state sponsored arbitration program.  By a divided panel - - - with a separate opinion from each of  the three judges - - - the majority held that the First Amendment requires public access to state arbitration proceedings.

800px-Ferdinand_Brütt_Vor_den_RichternWhile the majority affirmed the district judge, the appellate panel disagreed with the standard the district judge applied.  The correct standard, according to the apellate panel, is the "experience and logic" test.  The test derives from cases applying the open access to a trial principle that the United States Supreme Court enunicated in Richmond Newspapers v. Virginia in 1980, including Press Enterprise v. Superior Court (II), in 1986, considering whether preliminary criminal hearings must be open to the public.  Thus, quoting from Press Enterprise II,  as the majority opinion by Judge Dolores Sloviter phrased it:

A proceeding qualifies for the First Amendment right of public access when “there has been a tradition of accessibility” to that kind of proceeding, and when “access plays a significant positive role in the functioning of the particular process in question.”

The history prong - - - asking whether there is a tradition of accessibility - - - rests upon a determination of the "kind" of proceeding in question.  Here, the parties disagreed whether the focus should be on "civil trials" or "arbitrations": the court provided an in-depth discussion of both.  The civil trial discussion traversed familiar ground, with the easy conclusion that civil trials and courtrooms are generally open to the public.  The arbitration discussion began with a mention of English arbitrations in the twelfth century, concluding with a finding that the "history of arbitrations reveals a mixed record of openness."  But, the court continued, the history shows that "arbitrations with non-state action in private venues tends to be closed."  This is distinct from the Delaware scheme at issue, "a binding arbitration before a [state] judge that takes place in a courtroom," which is more like a usual civil trial. 

On the logic prong, not surprisingly given the majority's discussion of history, public access was deemed to play a significant positive role.  Judge Sloviter's opinion revealed a pointed disagreement with Judge Jane Roth's dissent:

I agree with Judge Roth on the virtues of arbitration. I cannot help but question why the Delaware scheme limits those virtues to litigants whose disputes involve an amount in controversy of at least a million dollars, and neither of whom is a consumer. One wonders why the numerous advantages set forth in Judge Roth’s dissenting opinion (which apparently motivated the Delaware legislature) should not also be available to businesspersons with less than a million dollars in dispute. I see no explanation in Judge Roth’s dissent for the limitation to rich businesspersons.

In her dissent, Judge Roth states that she believes that I do not appreciate the difference between adjudication and arbitration, i.e., “that a judge in a judicial proceeding derives her authority from the coercive power of the state, while a judge serving as an arbitrator derives her authority from the consent of the parties.” Indeed I do.

Delaware’s proceedings are conducted by Chancery Court judges, in Chancery Court during ordinary court hours, and yield judgments that are enforceable in the same way as judgments resulting from ordinary Chancery Court proceedings. Delaware’s proceedings derive a great deal of legitimacy and authority from the state. They would be far less attractive without their association with the state. Therefore, the interests of the state and the public in openness must be given weight, not just the interests of rich businesspersons in confidentiality.

In his concurring opinion, Judge Julio Fuentes seeks to clarify that it is not the entire arbitration scheme that violates the First Amendment, but only the provision requiring the proceedings to be "confidential" and "not of public record" until they are appealed.

Thus, these high stakes commercial arbitrations allowed by Delaware law and performed by Delaware judges can continue - - - but they are no longer confidential.  This certainly seems the correct outcome if the First Amendment access to "trials" has substantive meaning.

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