Private Judges and Secret Rulings

A recent NY Times op-ed Renting Judges for Secret Rulings by Prof. Judith Resnick of Yale Law School raises the question whether wealthy litigants should be able to rent state judges and courthouses to decide cases in private and keep the results secret. While the use of alternate dispute resolution in the form of arbitration and mediation is nothing new dating back to the Federal Arbitration Act of 1925, it is the attempt by the Delaware courts to legitimize in-court secrecy that makes the article and the case that it follows one of interest to the legal community.

The article follows the case of Delaware Coalition for Open Government, Inc. v. Strine, 733 F.3d 510 (3d Cir. 2013) that the US Supreme Court may decide. In 2009, Delaware amended its code to grant the Court of Chancery “the power to arbitrate business disputes” permitting companies to resolve disputes through closed-door arbitration presided over by a sitting judge. The Third Circuit found the amendment unconstitutional, even though such proceedings are not identical to civil trials, and even though arbitration has historically been private, since Delaware’s government-sponsored arbitration differs fundamentally from other arbitration, in that they are in front of judges in courthouses, result in binding orders of Chancery Court, and allow only limited right of appeal. Finding that court proceedings have historically been open to the public and the judiciary as part of a democratic society, the District Court and the Third Circuit sought to ensure accountability and allow the public to maintain faith in Delaware judicial system. The ruling stated that the drawbacks of openness are slight as court rules provide for confidential filing of documents, and there are remedies to protect trade secrets or other proprietary information. Confidentiality is not the sole advantage of Delaware’s arbitration proceeding over regular Chancery Court proceedings.

The case is pending before the US Supreme Court as Strine v. Delaware Coalition For Open Government, Inc., Docket No. 13-869. Briefs are available at SCOTUSblog which states the issue before the Court as:  Whether Press-Enterprise Corp. v. Superior Court of California‘s “experience and logic” test requires invalidation on First Amendment grounds of a Delaware statute authorizing state judges to act as arbitrators in business disputes — when the parties voluntarily select arbitration — because the arbitration proceedings are not open to the public.

The issue is not a new one and was the subject of a 2006 law review article. See Laurie Kratsky Dore, Public Courts Versus Private Justice: It’s Time To Let Some Sun Shine in on Alternative Dispute Resolution, 81 Chicago-Kent Law Review 463 (Spring 2006) available to the Brooklyn Law School community through the BLS Library subscription to HeinOnline.