Delaware’s Business Courts: The Complementary Nature of the Court of Chancery and the Superior Court’s Complex Commercial Litigation Division

May 2014

Publication

As the home of so many of the nation’s business entities, Delaware sees a corresponding share of their disputes in its courts. And given the United States Supreme Court’s recent decision in Daimler AG v. Bauman, Delaware companies are now “at home” (for jurisdictional purposes) in fewer places, further underscoring the national importance of Delaware’s business courts.

Over the years, the Delaware Court of Chancery has established itself as a premier forum for the litigation of business disputes, including primarily those in which equitable relief is sought. The Delaware Superior Court also has established its Complex Commercial Litigation Division (“CCLD”) as the complementary business court “at law.” As described by one of its members (soon after its formation) CCLD was intended as an “accent” to the Court of Chancery, thus ensuring that Delaware’s historic split between law and equity would not operate to the disadvantage of its corporate and other business constituents.

In the years since CCLD was established, however, the two courts have functioned more as partners, working in tandem where their jurisdiction overlaps and also where it does not. For example, cases arising under asset purchase agreements are typically brought in CCLD. Controversies involving stock purchase agreements are more often resolved in Chancery. Directors and officers’ insurance coverage disputes are now (apparently) the exclusive province of CCLD, while the underlying fiduciary duty claims are at the center of the equitable jurisdiction of Delaware’s Chancery Court.

The statutes and cases that define their jurisdiction suggest additional, potential “synergies” between these two, judicial siblings.

This article reviews the ways in which the two courts complement one another, by (i) comparing their jurisdictional underpinnings, (ii) reviewing their procedures, and (iii) discussing selected cases in which the interdependent approach now being applied by the courts has been highlighted. The article concludes with a brief consideration of other areas in which the two courts might serve to augment one another, in the service of Delaware’s corporate (and other business) citizens.

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