Recently, a minor tempest has been raging over the Delaware Arbitration Program, which attempts to marry one of America’s premier business courts to the fundamentally more private consensual adjudicative alternative, binding arbitration. At a time when commercial parties face potentially long delays in underfunded courts, but harbor mixed views about arbitration, Delaware’s unique concoction ostensibly offers a veritable trifecta of procedural advantages. These include: (1) a first-rate adjudicator practiced at applying the law to complex factual scenarios, (2) efficient case management and short cycle time and, above all, (3) a proceeding cloaked in secrecy. For the State of Delaware, the Program represents yet another enticement to businesses to select Delaware as the forum of choice, and even suggests the jurisdiction’s pretensions as a potential competitor in the global arbitration sweepstakes. For judges sitting in Delaware’s Court of Chancery, moreover, it is a sterling entrée into a post-judicial career as an arbitrator and mediator—the retirement plan du jour for American judges.

On the other hand, the Delaware Arbitration Program’s ambitious intermingling of public and private forums brings into play the longstanding tug-of-war between “the traditional party-centered view of civil litigation as a public service for private dispute resolution and the often conflicting perception of courts as ‘institutions expressive of and accountable to the public.’” The Program triggered a constitutional challenge based on third parties’ right of access to court proceedings. The case was heard by a judge of the U.S. District Court for the Eastern District of Pennsylvania, sitting by designation, who ruled that arbitration proceedings heard before sitting judges of the Delaware Chancery Court were “essentially” non-jury civil trials and thus were subject to public access.

The decision has been appealed to the Third Circuit. The case raises legitimate questions about the appropriateness of structuring a program in which sitting judges serve as arbitrators and preside over a procedure that is effectively shielded from public view. It also implicates issues regarding the use of public resources in ostensibly private disputes, and even the way our justice system is funded.

Part II of this article explores the factors that provided the impetus for the Delaware Arbitration Program and describes its features. Part III describes the constitutional challenge, the arguments by opponents and proponents of the Program, and the district court ruling striking down the Program. Part IV analyzes the arguments for and against upholding the district court’s determination, along with underlying evidence and other considerations, leading to the conclusion that the district court’s decision was well-founded.

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