Delaware Court of Chancery

Delaware Court of Chancery
Established	1792
Authorised by	Delaware Constitution art. IV
Appeals to	Delaware Supreme Court
Judge term length	12 years
Number of positions	7
Website	Official website

Courthouse in Georgetown, Delaware, one of the court's three locations

The Delaware Court of Chancery is a court of equity in the American state of Delaware. It is one of Delaware's three constitutional courts, along with the Supreme Court and Superior Court. Since 2018, the court consists of seven judges. The court is known for being a hub for corporate governance litigation in the United States, as two-thirds of Fortune 500 companies are incorporated in Delaware.

Connection to corporate law

Many companies prefer to incorporate in Delaware because of the state's corporate-friendly tax system and the Court's historical expertise in business litigation. The Court's judges tend to be longtime members of the Delaware State Bar Association who have spent their careers doing corporate litigation.

Because of the extensive experience of the Delaware courts, Delaware has a more well-developed body of case law than other states, which serves to give corporations and their counsel greater guidance on matters of corporate governance and transaction liability issues. More than two thirds of Fortune 500 companies are incorporated in the state. Delaware is the home to more than 1.8 million corporations, more than the number of residents in the state.

The Court of Chancery handle corporate internal affairs litigation (such as shareholder disputes and merger disputes) according the Delaware General Corporation Law, the statute governing corporations in Delaware. As a result, it is a hub for corporate litigation in the United States.

Judges

The chief judge is called the Chancellor, and the remaining judges are called Vice Chancellors. The chancellor and vice chancellors are nominated by the governor and confirmed by the 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". As a result, any person not affiliated with either the Republican or Democratic Party is not able to serve on the court.

Jurisdiction

The Court's jurisdiction is a hybrid of constitutional provisions, statutes, and case law.

According to the Delaware Judicial Information Center:

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 High Court of Chancery of Great Britain as it existed prior to the separation of the American colonies. The 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 Superior Court of Delaware. (10 Del. C., 369).

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." 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.

Equitable jurisdiction

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." 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.

The Court's most significant power is its ability to issue preliminary and permanent injunctions and temporary restraining orders. 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. 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 contests and disputes over interpretations of trusts are also heard by the Court.

In 1952, the Court of Chancery held in Gebhart v. Belton that the operation of segregated school systems in Delaware was unlawful, two full years before the U.S. Supreme Court would do so in Brown v. Board of Education.

Procedure

The Chancellor is responsible for appointing a judge on the court to preside over a case.

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.

History

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 matters. English law courts included the Court of King's Bench (or Queen's Bench when the monarch was female), the Court of Common Pleas, and the 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 'The Supreme Court of Judicature' (comprising the High Court and the 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 and 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 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.

Constitution of 1792

There was one chancellor, appointed by the governor for life.

Chancellors of Delaware

Name	Took office	Left office	Residence	Party
William Killen	October 6, 1793	December 6, 1801	Kent County	Democratic-Republican
Nicholas Ridgely	December 6, 1801	April 1, 1830	Kent County	Democratic-Republican
Kensey Johns Sr.	June 21, 1830	January 18, 1832	New Castle County	Whig

Constitution of 1831

There was one chancellor, appointed by the governor for life.

Chancellors of Delaware

Name	Took office	Left office	Residence	Party
Kensey Johns Jr.	January 18, 1832	March 28, 1857	New Castle County	Whig
Samuel M. Harrington	May 4, 1857	November 28, 1865	Kent County	Democratic
Daniel M. Bates	December 12, 1865	October 1873	New Castle County	Democratic
Willard Saulsbury Sr.	November 14, 1873	April 6, 1892	Sussex County	Democratic
James L. Wolcott	May 5, 1892	September 5, 1895	Kent County	Democratic
John R. Nicholson	September 5, 1895	June 10, 1897	Kent County	Democratic

Constitution of 1897

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. They are also appointed by the 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.

Chancellors of Delaware

Name	Took office	Left office	Residence	Party
John R. Nicholson	June 10, 1897	June 10, 1909	Kent County	Democratic
Charles M. Curtis	June 10, 1909	July 2, 1921		Republican
Josiah O. Wolcott	July 2, 1921	November 11, 1938	Kent County	Democratic
William W. Harrington	December 7, 1938	1950
Daniel F. Wolcott	1950	1951		Democratic
Collins J. Seitz	1951	July 17, 1966
William Duffy	July 17, 1966	1973
William T. Quillen	1973	1976
William Marvel	September 1976	May 1, 1982
Grover C. Brown	1982	1985
William T. Allen	1985	1997
William B. Chandler, III	1997	2011	Sussex County	Republican
Leo E. Strine Jr.	2011	2014	New Castle County	Democratic
Andre Bouchard	2014	2021		Democratic
Kathaleen McCormick	May 6, 2021	present

Vice chancellors of Delaware

Name	Took office	Left office	Residence	Party	Seat
George B. Pearson Jr.	1939	1946			1st
Collins J. Seitz	1946	1951
Howard W. Bramhall	1951	1954
William Marvel	1954	1976
Maurice A. Hartnett	1976	1994
Myron T. Steele	1994	2000
John W. Noble	November 2000	February 2016	Kent County	Democratic
Joseph R. Slights III	March 28, 2016	2022	Kent County	Democratic
Nathan A. Cook	July 21, 2022	present
Isaac D. Short	1961	1973			2nd
Grover C. Brown	1973	1982
Joseph J. Longobardi	1982	1984
Joseph T. Walsh	1984	1985
Jack B. Jacobs	1985	2003
Donald F. Parsons	2003	2015		Democratic
Tamika Montgomery-Reeves	November 2015	November 2019	New Castle County	Democratic
Paul Fioravanti Jr.	January 15, 2020	present
Carolyn Berger	1984	1994			3rd
Bernard S. Balick	1994	1998
Leo E. Strine Jr.	1998	2011	New Castle County	Democratic
Sam Glasscock III	2011	present	Sussex County	Republican
William B. Chandler III	1989	1997	Sussex County	Republican	4th
Stephen P. Lamb	1997	2009	New Castle County
J. Travis Laster	October 9, 2009	present	New Castle County	Republican
Morgan Zurn	October 4, 2018	present	New Castle County	Republican	5th
Kathaleen McCormick	November 1, 2018	May 6, 2021	New Castle County	Democratic	6th
Lori W. Will	May 26, 2021	present

The Court also employs three full-time Magistrates 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. The current Magistrates in Chancery are Selena E. Molina, Loren Mitchell, and Bonnie W. David.

See also

• Court of equity
• Courts of Delaware
• Delaware corporation
• The Delaware Journal of Corporate Law
• Delaware Corporate and Commercial Litigation Blog

References

• Munroe, John A (1993). History of Delaware. Newark, Delaware: University of Delaware Press. ISBN 0-87413-493-5.
• Conrad, Henry C (1908). History of the State of Delaware, 3 vols. Lancaster, Pennsylvania: Wickersham Company.

External links

• Delaware Court of Chancery homepage