Delaware Court of Chancery: Difference between revisions

|authority = [[Constitution of Delaware|Delaware Constitution]] art. IV

|appealsto = [[Delaware Supreme Court of Delaware]]

The '''Delaware Court of Chancery''' is a [[court of equity]] in the [[UnitedU.S. States|Americanstate]] state of [[Delaware]]. It is one of Delaware's three constitutional courts, along with the [[Delaware Supreme Court|Supreme Court]] and [[Delaware Superior Court|Superior Court]]. Since 2018, the court consists of seven judges. The court is known for being a hub for [[Corporate law|corporate governance litigation]] in the United States, as two-thirds of [[Fortune 500]] companies are incorporated in Delaware. It is among the preeminent [[business courts]] in the world.<ref>{{Cite web |last1=Bach |first1=Mitchell L. |last2=Applebaum |first2=Lee |title=A History of the Creation and Jurisdiction of Business Courts in the Last Decade, 60 Bus. Law. 147 (2004) |url=https://www.businesscourtsblog.com/wp-content/uploads/2023/02/00321795.pdf}}</ref>

== Connection to Corporatecorporate Lawlaw ==

The chief judge is called the Chancellor, and the remainingother six judges are called Vice Chancellors. The chancellor and vice chancellors are nominated by the [[GovernorList of governors of Delaware|governor]] and confirmed by the [[Delaware Senate|state senate]] for 12-year terms. The Court is subject to the "major-party" rule in the Delaware constitution. Also known as the political balance requirement, this requires that the bare majority of the court "shall be of one major political party", and the other judges "shall be of the other major political party".<ref>{{Cite web |last=Epps |first=Garrett |date=2020-03-28 |title=Delaware’sDelaware's Weird—and Constitutionally Suspect—Approach to Judicial Independence |url=https://www.theatlantic.com/ideas/archive/2020/03/delawares-weirdand-constitutionally-suspectapproach-to-judicial-independence/608971/ |access-date=2023-06-17 |website=The Atlantic |language=en}}</ref> As a result, any person not affiliated with either the Republican or Democratic Party is not able to serve on the court.<ref>{{Cite web |date=2022-09-25 |title=Judge won't toss suit over Delaware court political balance |url=https://apnews.com/article/us-supreme-court-delaware-lawsuits-dover-john-carney-809e279fe98ebf47be185158a5a60e78 |access-date=2023-06-17 |website=AP NEWS |language=en}}</ref>

<blockquote>The Court of Chancery has jurisdiction to hear and determine all matters and causes in equity. The general equity jurisdiction of the Court is measured in terms of the general equity jurisdiction of the [[Court of Chancery|High Court of Chancery]] of Great Britain as it existed prior to the separation of the [[United States|American]] colonies. The [[Delaware General Assembly|General Assembly]] may confer upon the Court of Chancery additional statutory jurisdiction. In today's practice, the litigation in the Court of Chancery consists largely of corporate matters, trusts, estates, and other fiduciary matters, disputes involving the purchase and sale of land, questions of title to real estate, and commercial and contractual matters in general. When issues of fact to be tried by a jury arise, the Court of Chancery may order such facts to trial by issues at the Bar of the [[Delaware Superior Court|Superior Court of Delaware]]. (10 Del. C., 369).<ref name=welcome>{{cite web |url=http://courts.delaware.gov/Chancery/ |title=Welcome to the Delaware Court of Chancery |publisher=Delaware State Courts |access-date=2011-11-30}}</ref></blockquote>

Article IV, Section 10 of the Delaware Constitution establishes the Court and provides that it "shall have all the jurisdiction and powers vested by the laws of this State in the Court of Chancery."<ref>{{cite web |url=http://delcode.delaware.gov/constitution/constitution-05.shtml#P504_73243 |title=§ 10. Composition and jurisdiction of Court of Chancery; initiation and decisions in causes and proceedings. |work=State of Delaware Constitution: Article IV Judiciary |publisher=Online Delaware Code |access-date=2011-11-30}}</ref> The Court has one Chancellor, who is the chief judicial officer of the Court, and four Vice Chancellors. It also has two Masters in Chancery, who are assigned by the Chancellor and Vice Chancellors to assist in matters as needed.

Title 10, Section 341 of the Delaware Code states that the Court "shall have jurisdiction to hear and determine all matters and causes in equity."<ref name="Delaware Code Title 10">{{cite web |url=http://delcode.delaware.gov/title10/c003/sc03/index.shtml |title=CHAPTER 3. COURT OF CHANCERY Subchapter III. General Jurisdiction and Powers |work=Title 10 Courts and Judicial Procedure |publisher=Online Delaware Code |access-date=2011-09-19}}</ref> Subsequent decisions have held that the Court's equitable jurisdiction is the same as that held by the English High Court of Chancery at the time of American independence in 1776.{{citation needed|date=October 2010}}

The Court's most significant power is its ability to issue preliminary and permanent [[injunction]]s and [[Injunction|temporary restraining orderorders]]s. This is frequently exercised in the context of disputes involving [[mergers and acquisitions]] or sales of corporations, wherein a corporate suitor or a shareholder will attempt to enjoin—that is, prevent—the sale or merger of a corporation, claiming that their stock value has been diluted or that they have superior rights to purchase the corporation. In a typical sale or merger dispute, a plaintiff will seek a temporary restraining order, sometimes on an ''[[ex parte]]'' basis, to prevent the transaction from taking place and preserve the ''status quo''. If the Court grants that relief, the plaintiff will then seek a preliminary injunction to maintain the current state of affairs until a trial can take place.

Title 10, Section 342 of the Delaware Code provides that the Court shall not hear any matters for which an adequate remedy exists at law or which can be heard by any other Delaware court.<ref name="Delaware Code Title 10" /> As a practical matter, this means that the Court cannot grant relief in the form of money damages to compensate a party for a loss or where another court has coterminous jurisdiction. However, under the rules of equity, the court can grant monetary relief in the form of [[restitution]] by ruling that another party has unjustly gained money that belongs to the plaintiff.

Apart from its general equitable jurisdiction, the Court has jurisdiction over a number of other matters. First, the Court has sole power to appoint guardians of the property and person for mentally or physically disabled Delaware residents. Similarly, the Court may also appoint guardians for minors, although the Family Court has coterminous jurisdiction over such matters. [[Will contest]]s and disputes over interpretations of [[Trust law|trust]]s are also heard by the Court.

The Court sits without a jury. All issues of fact are determined by the presiding Chancellor or Vice Chancellor. The Court has the discretion to appoint an advisory jury if it so desires, but this power is practically never exercised.

The Court of Chancery's decision can be appealed to the [[Delaware Supreme Court]], whose decision is final unless appealed to the [[Supreme Court of the United States]].

The history of the Court of Chancery stems back to the English [[common law]] system, in which separate courts were established to hear [[law]] and [[Equity (law)|equity]] matters. English law courts included the [[Court of King's Bench (England)|Court of King's Bench]] (or Queen's Bench when the monarch was female), the [[Court of Common Pleas (England)|Court of Common Pleas]], and the [[Exchequer of Pleas|Court of the Exchequer]]. The sole English court of equity was the [[Court of Chancery]].

Along with the remainder of the original [[Thirteen Colonies]], [[Delaware]] imported the English concept of [[common law]]. This included establishing a separate Court of Chancery. As the legal system evolved in England, the English Court of Chancery was eventually abolished by the Judicature Act 1873-75 and its powers merged into what was then called '[[Courts of England and Wales|The Supreme Court of Judicature]]' (comprising the [[High Court of Justice|High Court]] and the [[Court of Appeal of (England and Wales)|Court of Appeal]]) which exercised jurisdiction in both common law and equity. This was prompted in part by similar reforms which had taken place elsewhere, notably the abolition of the [[New York Court of Chancery]] in 1847. Most American jurisdictions followed the reforms in New York and England.

In its first Constitution, the [[Delaware Constitution of 1776]], there was no special provision for a court of equity. However, when the constitution was revised in the [[Delaware Constitution of 1792]] a separate Court of Chancery was established. This constitution was heavily influenced by thinking of [[John Dickinson (delegate)|John Dickinson]] and [[George Read (signerAmerican politician, born 1733)|George Read]]. [[William T. Quillen]] and Michael Hanrahan in their ''Short History of the Delaware Court of Chancery'' repeat the "folklore of the Delaware bench and bar, saying that the impetus for creating a Court of Chancery was to provide a new judicial seat for Delaware's first Chancellor, William Killen." Killen was the elderly and highly respected incumbent Chief Justice of Delaware, and when [[George Read (signerAmerican politician, born 1733)|George Read]] was considered to be the new Chief Justice of Delaware, he refused unless adequate provisions were made for Killen. A separate Court of Chancery under Killen was the solution.<ref name=welcome/>

{| class="wikitable" style="text-align:center; width:94%; margin:auto;"

|[[Democratic-Republican Party (United States)|Democratic-Republican]]

|[[Democratic-Republican Party (United States)|Democratic-Republican]]

{| class="wikitable" style="text-align:center; width:94%; margin:auto;"

There is one chancellor, appointed by the governor for a 12-year term. There were also created over the years, additional vice chancellors, the first in 1939, a second in 1961, a third in 1984, and a fourth in 1989. Since 2018, there are six vice chancellors.<ref>{{Cite web |url=https://www.reuters.com/article/delaware-court-idUSL2N1W61QK |title=Delaware governor nominates two for state's corporate court |last=Hals |first=Tom |date=September 20, 2018 |website=Reuters}}</ref> They are also appointed by the [[Governor of Delaware|governor]] for a 12-year term. They are required to be equally divided between the major political parties, so that among all the chancellors no party has a majority of more than one person.

{| class="wikitable" style="text-align:center; width:94%; margin:auto;"

|[[William T. Quillen]]

|[[William B. Chandler III|William B. Chandler, III]]

|[[André Bouchard (Judge)|Andre Bouchard]]<ref>{{cite web |first=Brett |last=Melson |url=http://blog.delawareinc.com/andre-bouchard-delaware-court-of-chancery/ |title=Andre Bouchard: Delaware Court of Chancery Chief |date=22 April 22, 2014 |access-date=27 April 27, 2016}}</ref>

{| class="wikitable" style="text-align:center; width:94%; margin:auto;"

|'''[[Lori W. Will]]'''

The Court also employs three full-time Magistrates in Chancery (formerly known as Masters in Chancery), appointed by the Chancellor under Court of Chancery Rule 144. The Magistrates adjudicate cases assigned to them by the Court, with a particular focus on "the people's concerns in equity," such as guardianships, property disputes, and trust and estate matters.<ref>{{Cite web |date=May 19, 2017 |title=THE DELAWARE JUDICIARY ANNOUNCES A NEW MASTER IN CHANCERY |url=https://courts.delaware.gov/Forms/Download.aspx?id=95558 |url-status=live|archive-url=https://web.archive.org/web/20170528142236/http://courts.delaware.gov/forms/download.aspx?id=95558 |archive-date=2017-05-28 }}</ref> The current Magistrates in Chancery are Selena E. Molina, Loren Mitchell, and Bonnie W. David.<ref>{{Cite web |url=https://courts.delaware.gov/chancery/judges.aspx |title=Judicial Officers - Court of Chancery - Delaware Courts - State of Delaware |website=courts.delaware.gov |language=en |access-date=2018-06-14}}</ref>

* [[Courts of Delaware]]

* {{cite book |title=History of Delaware |last=Munroe |first=John A. |publisher=University of Delaware Press |location=Newark, Delaware |year=1993 |isbn=0-87413-493-5}}

* {{cite book |title=History of the State of Delaware, 3 vols |last=Conrad |first=Henry C. |publisher=Wickersham Company |location=Lancaster, Pennsylvania |year=1908}}