WILMINGTON, Del. (CN) – A coalition for open government claims Delaware is illegally allowing its Chancery Court – the state’s premier business court – to arbitrate disputes confidentially, which “amounts to a secret judicial proceeding.”
The Delaware Coalition for Open Government sued Delaware, its Chancery Court and its five judges in Federal Court.
The Coalition challenges a 2009 state law – 10 Del. C. §349 – which gave the Chancery Court the power to arbitrate business disputes between consenting parties. Nine months later, the Chancery Court adopted rules for the arbitration proceedings.
But the “Register in Chancery will not include the [arbitration] petition as part of the public docketing system,” and the “petition and any supporting documents are considered confidential and not public record,” according to the complaint.
Under the rules, “arbitration hearings are private proceedings such that only parties and their representatives may attend,” the Coalition says.
The law and the rules call the procedure “arbitration,” but the “parties still examine witnesses before and present evidence to the arbitrator (a sitting judge), who makes findings of fact, interprets the applicable law and applies the law to the facts, and then awards relief which may be enforced as any other court judgment.”
The only real difference between the court’s regular proceedings and “arbitration” is that “now these procedures and rulings occur behind closed doors instead of in open court,” which violates the Constitution’s First and 14th amendments, the Coalition says.
The first so-called “secret judicial proceeding” was initiated in September by Advanced Analogic Technologies against Skyworks Solutions.
The Coalition seeks a declaration that 10 Del. C. §349 and Chancery Rules 96, 97 and 98 are unconstitutional, and wants the defendants enjoined from conducting any nonpublic proceedings under the challenged statute and rules.
The Coalition is represented by David L. Finger with Finger & Slanina.