By: Austin Robert Niggebrugge

Delaware remains the corporate capital of the world. It follows that maintaining the partnership between the Court of Chancery (“Chancery”) and the Superior Court’s Complex Commercial Litigation Division (“CCLD”) is salient. Courts across the country are overwhelmed with cases because of the COVID-19 pandemic; however, the difference between Delaware and the rest of the nation is that:

Delaware’s corporate franchise remained open for business like no other. We saw a year of unprecedented growth in 2020, adding 249,427 new business entities throughout the franchise. Total business entities topped 1.6 million at year end with over 8.72% growth in LLCs and 13.97% in the number of corporations. Consistent with past years, we continue to be the domicile of choice for members of the Fortune 500 at nearly 68%. Approximately 93% of all U.S. initial public offerings are entities registered with Delaware.[1]

It follows that jurisdiction is even more relevant after the Supreme Court’s decision in Daimler AG v. Bauman[2] which clarified that Delaware companies were considered “at home” in fewer places.[3] Therefore, this partnership is essential so that Delaware’s historic split between law and equity does not seek to disadvantage Delaware’s corporate and other busines entities.[4]

Jurisdiction

A. Court of Chancery

Chancery is a court of equity that handles equitable claims in which equitable remedies are sought.[5] It does not hold trials with juries; rather, a Chancellor[6] or Vice Chancellor sees the case through to its conclusion.[7]Section 111 of Delaware’s General Corporation Law allows Chancery

“’to interpret, apply, enforce or determine the validity of ’various corporate instruments, including certificates of incorporation, by laws, stock purchase agreements, proxies, and merger agreements[].”[8]

Chancery has exclusive jurisdiction when indemnification is sought against a Delaware corporation, guardianship, trust, and/or estate matter.[9] Chancery cannot grant declaratory relief because that requires a claim for equitable relief.[10] Chancery can, however, grant injunctive relief; whereas the Superior Court cannot.[11]

B. Superior Court’s CCLD

The Superior Court launched the CCLD in 2010.[12] The CCLD attracts business litigants involving disputes such as commercial agreements, insurance coverage, asset purchase agreements, and trade secrets.[13] The CCLD holds trials with juries.[14] CCLD exists to resolve “claims for personal, physical or mental injury, mortgage foreclosure actions, mechanics’ lien actions, and condemnation proceedings are ineligible.”[15]

Procedural Considerations

A. Court of Chancery[16]

Chancery will likely move at the pace of the litigants, who retain great control over the litigation schedule.[17] However, if there is a likelihood of irreparable harm, expedited litigation is preferred.[18] In addition, masters are available should a dispute arise as to discovery.[19]

B. Superior Court’s CCLD

Three types of cases may be filed in the CCLD:

  1. If the case involves $1 million or more;
  2. If an exclusive choice of court agreement exists; and
  3. If the President Judge[20] of the Superior Court designated it for CCLD.[21]

The CCLD consists of a panel of five judges.[22] For case management, the CCLD requires:

“(1) assignment of cases to the same judge for all purposes through final disposition, (2) early scheduling conferences after all pleadings have been filed, and (3) firm pretrial and prompt trial dates that will not be continued to scheduling conflicts with other civil cases.”[23]

The parties have flexibility in deciding and agreeing upon the case management, including discovery.[24]

The Importance of the Partnership

Vice Chancellor Laster said in Massachusetts Mutual Life Insurance Company v. Certain Underwriters at Lloyd’s of London[25] that:

The availability of the of the Superior Court’s Complex Commercial Litigation Division further ensures that a remedy in that court will “as practical to the ends of justice and to its prompt administration as the remedy in equity[]” … In noting the availability of the Division … [t]he point is simply that complexity is no bar to the adequacy of a legal remedy in the Superior Court … and the Complex Commercial Litigation Division is certainly up to the task.[26]

Conclusion

There are many similarities between the two courts, but the main differences revolve around jury trials and relief sought. The complimentary nature between them continues to evolve and maintaining the already established partnership is salient for future complex business litigation here in Delaware.

About the Author*

Austin Robert Niggebrugge is a second-year law student at Widener University Delaware Law School. Austin is a first-generation law student and a native Delawarean. He attended Caravel Academy and then the University of Delaware where he was also a five-year member of the NCAA Division 1 Men’s Baseball Team. He is also a member of the Moot Court Honor Society and Transactional Law Honor Society. This summer, Austin will work as a summer associate at Marshall Dennehey Warner Coleman & Goggin in their Wilmington office. Austin plans to practice here in Delaware with a focus on civil defense litigation.


*Author’s Note: This blog post does not reflect the views of Widener University Delaware Law School, the Delaware Journal of Corporate Law, or any past, current, or future employer of the Author.  The opinions and errors contained herein unilaterally belong to the Author.

[1] A Message from the Secretary of State – Jeffrey W. Bullock, Comment to Annual Report Statistics,Del. Div. of Corp, https://corp.delaware.gov/stats/ (last visited Feb. 4, 2022).

[2] See generally Daimler AG v. Bauman, 571 U.S. 117 (2014).

[3] Id. at 122.

[4] Katharine Lester Mowery, Delaware’s Business Courts: The Complimentary Nature of the Court of Chancery and the Superior Court’s Complex Commercial Litigation Division, Richards, Layton & Finger (May 2014), https://www.rlf.com/delawares-business-courts-the-complementary-nature-of-the-court-of-chancery-and-the-superior-courts-complex-commercial-litigation-division/.

[5] Del. Code Ann. tit. 10, § 341.

[6] As of May 6, 2021, Kathaleen St. J. McCormick is the first woman Chancellor in Chancery’s history. See Judicial Officers, Delaware Courts, https://courts.delaware.gov/chancery/judges.aspx (last visited Feb. 4, 2022); see also Jacob Owens, Senate Confirms McCormick to Lead Chancery, Delaware Business Times(April 22, 2021), https://delawarebusinesstimes.com/news/senate-confirms-mccormick/.

[7] Mowrey, supra note 4, at 3. Cases are assigned to one of five members of the Court.

[8] Id. at 2.

[9] Id.

[10] Id.

[11] Del. Code Ann. tit. 10, § 343.

[12] Complex Commercial Litigation Division, Richards, Layton & Finger, https://www.rlf.com/ccld/ (last visited Feb. 4, 2022).

[13] Id.

[14] Del. R. Civ. P. Super. Ct. 38, 39.

[15] Mowrey, supra note 4, at 4 (citing Admin. Directive No. 2010-3 (Del. Super. Ct. Apr. 26, 2010)); Administrative Directive of the President Judge of the Superior Court of the State of Delaware, Superior Court of the State of Delaware, http://courts.delaware.gov/Superior/pdf/Administrative_Directive_2010-3.pdf(last visited Feb. 4, 2022).

[16] See Francis G.X. Pileggi & Chauna A. Abner, Transferring Cases From Chancery Court to Superior Court: A Step-by-Step Guide, Del. Bus. Ct. Insider (Mar. 10, 2022, 9:01 AM), https://www.law.com/delbizcourt/2021/03/10/transferring-cases-from-chancery-court-to-superior-court-a-step-by-step-guide/, for a more practical guide to transfer cases to CCLD from Chancery.

[17] Mowrey, supra note 4, at 3.

[18] Id. at 3-4.

[19] Id. at 4. Masters helps with discovery issues and fill in when needed.

[20] As of January 13, 2015, the Honorable Jan R. Jurden is the first woman President Judge in the Superior Court’s history. See The Honorable Jan. R. Jurden, President Judge, Delaware Courts, https://courts.delaware.gov/superior/aboutus/judges_profile_jjurden.aspx (last visited Mar. 9, 2022); see also Jessica Masulli Reyes, Jurden Becomes First Female President of Superior Court, Del. Online (Feb. 17, 2015), https://www.delawareonline.com/story/news/local/2015/02/16/jurden-becomes-first-female-president-superior-court/23523081/.

[21] Mowrey, supra note 4, at 4.

[22] The panel consists of: Judge William C. Carpenter Jr., Judge Mary M. Johnston, Judge Eric M. Davis, Judge Paul R. Wallace, and Judge Abigail M. Legrow. See Complex Commercial Litigation Division Panel Judges, Del. Courts, https://courts.delaware.gov/superior/complex_judges.aspx (last visited Feb. 4, 2022).

[23] CCLD, supra note 12.

[24] Mowrey, supra note 4, at 5, http://courts.delaware.gov/Superior/pdf/Administrative_Directive_2010-3.pdf (last visited Feb. 4, 2022) (citing Admin. Directive No. 2010-3 (Del. Super. Ct. Apr. 26, 2010)).

[25] Mass. Mut. Life Ins. Co. v. Certain Underwriters at Lloyd’s of London, No. 4791-VCL, 2010 WL 3724745, at *1 (Del. Ch. Sept. 24, 2010).

[26] Id. at *4.