Delaware Business Litigation Report

Delaware's Business Courts Seek Comments

Authored by Edward M. McNally
This article was originally published in the Delaware Business Court Insider | May 2, 2012

In May 2010, the Delaware Supreme Court established its Complex Commercial Litigation Division. The CCLD is a true "business court," intended to supplement and complement Delaware's pre-eminent court for business disputes, the Delaware Court of Chancery. Since it was established, more than 100 civil actions have been filed in the CCLD.

Why a new business court when the Court of Chancery was so well respected? As a court with traditional equitable jurisdiction, the Court of Chancery does not permit jury trials or claims seeking only money damages. Hence, the common contract dispute between businesses often could not be litigated in the Court of Chancery and could never be tried to a jury. Instead, those cases had to be filed in the Delaware Superior Court, the Delaware trial court with general civil jurisdiction.

While the Superior Court handled those cases very well, the demands of modern litigation called for some changes in its practices. For example, electronically stored information (ESI) has grown so vast that the discovery process for ESI was often too expensive and time-consuming. Scheduling complicated business disputes in a court system already crowded with other civil and criminal matters was increasingly difficult. Delay was the result and all businesses hate those delays in resolving their disputes that so distract their employees and drain their resources. The time was ripe for change.

Out of this need, the CCLD was created. It has four experienced judges assigned to it who keep a case from beginning to end. The CCLD employs detailed scheduling orders whose timelines are meant to be kept, with cases tried in a year to 18 months. Special CCLD guidelines for addressing ESI discovery, attorney-client privilege disputes and expert testimony address three of the most contentious, expensive and time-consuming problems in modern civil litigation. The result is that cases are properly handled and trials scheduled.

Of course, as with any matter involving contentious parties, the course of litigation has not always been problem-free, even in the CCLD. This is to be expected when there is significant money at stake. That is always the case in the CCLD, whose jurisdiction is limited to matters involving at least $1 million in dispute. The judges of the CCLD recognize this and are determined to improve its processes. Hence, they are now inviting public input on how to improve the CCLD.

Since the idea of a CCLD took shape, the chief judge of the Delaware Superior Court has asked a committee of experienced Delaware lawyers to make suggestions on how the CCLD should operate. This CCLD committee periodically meets with the CCLD judges, both to provide comment on its practices and to hear the judges' thoughts on how litigation in the CCLD might be improved. The CCLD committee is scheduled to meet with the CCLD judges later this month and will welcome suggestions for the improvement of civil litigation in Delaware.

To prime your interest, here are a few areas of practice that might be addressed. To date, the CCLD has permitted the litigants to decide for themselves how strictly they want to follow the published CCLD guidelines on such matters as e-discovery and expert testimony. While the litigants have generally acted responsibly, there has been occasional, unnecessary squabbling. Should the judge insist their guidelines must be followed in such matters and no deviations be permitted?

After all, there is a good reason why every court has its Rules of Civil Procedure — to avoid inventing the rules for each new case. So long as there is some flexibility in how the rules are applied, new litigants are able to live with those rules. The CCLD decided not to adopt new rules of procedure, but instead to promulgate guidelines in those areas where the better course seemed to be to let sophisticated parties with much at stake set their own procedures. Is that still a good idea?

Scheduling orders are another potential area of some concern. One of the core principles of the CCLD is that it is bad for justice to be delayed. Yet too often lawyers request, even demand, extended periods to complete discovery and opportunities to brief and argue every issue. As a result, the judges are sometimes left with the difficult decision of whether to cut short the time one litigant pleads he or she needs to prepare his or her case. Should the CCLD nonetheless adopt strict scheduling timetables that will force lawyers to do what they must, when they must, to go to trial? After all, very short pretrial schedules are routine in a few "rocket dockets" and are often ordered in the Court of Chancery, where bet-your-company litigation is common.

If you have suggestions, comments or even complaints, send them to me as a member of the CCLD committee. You need not have litigated a case in the CCLD to make suggestions on how to improve the resolution of business disputes. To review the CCLD guidelines, visit its website at www.courts.delaware.gov/Superior/complex.stm. I will, in turn, guard your identity when I convey your messages to the committee as a whole. Remember, if you are not willing to help us improve, then you should not complain later.

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