The Supreme Court of Delaware is the sole appellate court in the United States' state of Delaware. Because Delaware is a popular haven for corporations, the Court has developed a worldwide reputation as a respected source of corporate law decisions, particularly in the area of mergers and acquisitions.
Motions are normally handled in chambers by a motions justice. Arguments on motions are uncommon.
Oral argument
While the Court's appellate jurisdiction is mandatory, it is not required to hear oral argument. Approximately 60-75% of its decisions are rendered on briefs. If a case involves a novel question of law or the justices desire clarification, oral argument is called. Each attorney in oral argument is given 20 minutes to present its side, except for capital cases, in which each side is given 30 minutes. Most cases are heard by a panel of three justices. In certain cases set forth in Rule 1 of the Court's Rules, the Court will sit en banc. These cases include cases where a criminal defendant has been sentenced to death, where the three justice panel cannot reach a unanimous decision, or where the Court has been asked to modify or overrule existing precedent. In cases being heard by a three justice panel, the lawyers presenting argument do not know the identity of the justices hearing the argument until the justices enter the courtroom. Arguments are normally held each Wednesday beginning at 10:00 a.m. in Dover, the state capital. Occasionally, the Court will hear arguments in special locations, such as the Widener University School of Law. The Court has a courtroom in Wilmington, but it is rarely used.
History
The Court in its current form was established by means of a constitutional amendment in 1951. Before that, the Court had operated under the Delaware Constitution of 1897 as a unique "leftover-judge" system, wherein appeals were heard by a panel of three judges who were not involved in the matter on appeal from either the Superior Court or the Court of Chancery. In 1978, the Court's size was expanded from three to five. Prior to 1897, Delaware's highest court was the Court of Errors & Appeals, which operated under a similar "leftover-judge" system.
Notable cases
Cheff v. Mathes : The first time the Delaware Supreme Court addressed problems of board of directorsconflict of interest in a takeover setting. In this case, the court applied intermediate scrutiny to the board of directors' decision to pay a bidder greenmail, stating that directors must have "reasonable grounds to believe a danger to corporate policy and effectiveness existed by stock ownership. irectors satisfy their burden by showing good faith and reasonable investigation"
Smith v. Van Gorkom : Expanded the modern doctrine of the business judgment rule to include the duty of care, often called negligence. Under the general business judgment rule, a Delaware court will not second-guess the decisions of a board of directors absent a breach of one of three fiduciary duties: good faith, due care, or loyalty. A plaintiff may overcome the business judgment ruleand receive a more favorable level of scrutiny under the "entire fairness" standardif the plaintiff can show that the directors' decision lacked any rational basis.
Unocal v. Mesa Petroleum : A board of directors may only try to prevent a take-over where it can be shown that there was a threat to corporate policy and the defensive measure adopted was proportional and reasonable given the nature of the threat.
Revlon v. McAndrews & Forbes Holdings, Inc. : If a company is up for sale, the board of directors has a duty to maximize the value of that sale for the shareholders' benefit.
Mills Acquisition Co. v. Macmillan, Inc. : A board of directors may refuse a takeover attempt without submitting the matter to a vote of shareholders.
Paramount v. QVC : If a board of directors is about to consider selling, dissolving, or transferring control of a corporation, they are prohibited from considering non-shareholder interests and have a duty to maximize shareholder value.
