Third Circuit Finds Delaware Judicial Arbitration Procedure Unconstitutional | Practical Law

Third Circuit Finds Delaware Judicial Arbitration Procedure Unconstitutional | Practical Law

The US Court of Appeals for the Third Circuit upheld, on different grounds, a lower court's ruling that the Delaware confidential judicial-arbitration procedures violate the First Amendment's right of access.

Third Circuit Finds Delaware Judicial Arbitration Procedure Unconstitutional

Practical Law Legal Update 2-546-9185 (Approx. 4 pages)

Third Circuit Finds Delaware Judicial Arbitration Procedure Unconstitutional

by Practical Law Corporate & Securities
Published on 24 Oct 2013Delaware
The US Court of Appeals for the Third Circuit upheld, on different grounds, a lower court's ruling that the Delaware confidential judicial-arbitration procedures violate the First Amendment's right of access.
On October 23, 2013, the US Court of Appeals for the Third Circuit affirmed, on different grounds, a lower court's holding that the State of Delaware's new confidential judicial-arbitration procedures are unconstitutional. For a description of the proposed arbitration procedures, see Legal Update, Delaware Chancery Court Adopts Voluntary Arbitration Rules for Business Disputes.
Last year, in Delaware Coalition for Open Government v. Honorable Leo E. Strine, Jr., the US District Court for the District of Delaware held that the proposed arbitration proceedings would function essentially as civil bench trials to which there is a qualified right of public access under the First Amendment (see Legal Update, Delaware Confidential Judicial Arbitration Procedures Unconstitutional). While the Third Circuit also found the arbitration procedures violated the First Amendment, it held that the District Court should have applied the "experience and logic" test described by the US Supreme Court in Press-Enterprise Company v. Superior Court of California for Riverside County, 478 U.S. 1 (1986).
Under this test, the experience prong requires courts to consider whether "the place and process have historically been open to the press and general public." Under the logic prong, the court examines whether "access plays a significant positive role in the functioning of the particular process in question." In applying the test, the Third Circuit found that:
  • The experience prong was met because the history of civil trials and arbitrations showed a strong tradition of openness for proceedings like the Delaware judicial arbitration, where a binding arbitration is conducted in a courtroom before an active judge.
  • The logic prong was met because access would ensure accountability of the litigants, lawyers and judges, and allow the public to maintain faith in the Delaware judicial system.
Following its analysis, the Third Circuit concluded that Delaware had a tradition of open access to proceedings like the judicial arbitration, and that there is therefore a First Amendment right of access to those arbitrations.
Court documents: