DE judge talks corporate law
Published: Tuesday, April 17, 2012
Updated: Tuesday, April 17, 2012 02:04
A Delaware business judge and university alumnus named corporation law as the most critical industry to the state during a speech in Kirkbride Hall on Thursday.
Chancellor Leo Strine Jr. who presides in the only American Court of Chancery, a business court of equity that tries to restore fairness to a party whose rights have been violated, spoke to students and faculty as a part of a lecture series sponsored by the School of Public Policy and Administration.
The Court of Chancery settles disputes through a non-jury trial court that has jurisdiction over cases involving trusts, equity, real property, civil rights and commercial lawsuits. He has served on the Court of Chancery since 1998, first as vice chancellor, and was later appointed to his current position in June 2011.
As the state becomes more financially successful, the percentage of businesses based in Delaware increases and is important to the state, he said.
Strine said economic decline in American industries like banking and automobiles are troublesome for Delaware because it floods the court with bankruptcy and intellectual property cases. Delaware is the only state to continually have a Court of Chancery.
“There’s nothing close to it,” Strine said. “It actually scares me to death.”
Edward Freel, a public policy instructor who organized the lecture series, said the location of the Court of Chancery is the primary reason that more than half of the companies listed on the New York Stock Exchange are located in Delaware, which magnifies the court’s importance.
“It is the most respected business court in the United States and in the world,” Freel said.
Strine said juries are unpredictable and ward off businesspeople. The Court of Chancery allows businesses better planning by having predictable practices, he said.
Strine said there are myths among Congressmen about Delaware not taxing corporations, but the state charges businesses more than any other state. Although the state does not charge income taxes to businesses that do not operate in the state, lawmakers can levy a large franchise tax on companies, which is significantly higher than those in other states.
“It’s not the tax advantages, it’s the predictability of the law,” he said. “It’s not that we get it perfect all the time. There’s no such thing as perfection in humans, but we try.”
Strine said Delaware is an appealing location for business owners because it provides a neutral playing ground between managers of companies and its stockholders, unlike most states, where they may not have the same advantage.
“The court also works fast in real speed,” String said. “If you need an answer in four days, you’ll get an answer in four days. [Delaware’s] Supreme Court will turn heaven and earth itself to give you an appellate answer.”
Strine also gave advice for college students pursuing careers in public policy. He said that networking with people in public policy is critical and he encourages students to expose themselves to a variety of ideas, take advantage of unexpected opportunities and maintain integrity.
“The most disappointing thing is not losing,” he said. “It’s losing and knowing that you haven’t been true to yourself and you weren’t true to yourself because you wanted to win.”
Junior Lydia Catone said she thought Strine’s speech was interesting because she didn’t realize the significance of Delaware’s Court of Chancery. She said she would pay more attention to the issues that are settled through the court after hearing Strine speak.
“I’m a public policy major, so it was already really important to me,” Catone said. “But it’s great to see alumni speak about how great their experience is.”
Meredith Seitz, a second-year Master of Public Administration student and teaching assistant, said she thought it was interesting to hear about public policy from someone in the court system who is not an elected official and was appointed to his position.
“I think the chancellor touched on some things that students in public policy don’t often hear about because he’s coming from a different angle,” Seitz said.
She said Strine helped her realize how important Delaware’s Court of Chancery is to the whole country. She said she was already committed to a career in public policy, but Strine reinforced her beliefs.
“Hearing his story was motivating,” she said.