Del. Coal. for Open Gov't, Inc. v. Strine

Decision Date23 October 2013
Docket NumberNo. 12–3859.,12–3859.
Citation733 F.3d 510
PartiesDELAWARE COALITION FOR OPEN GOVERNMENT, INC. v. The Honorable Leo E. STRINE, Jr.; The Honorable John W. Noble; The Honorable Donald F. Parsons, Jr.; The Honorable J. Travis Laster; The Honorable Sam Glasscock, III; The Delaware Court of Chancery; The State of Delaware The Honorable Leo E. Strine, Jr.; The Honorable John W. Noble; The Honorable Donald Parsons, Jr.; The Honorable J. Travis Laster; The Honorable Sam Glasscock, III, Appellants.
CourtU.S. Court of Appeals — Third Circuit

OPINION TEXT STARTS HERE

Andre G. Bouchard, Joel E. Friedlander, Jeffrey M. Gorris, Bouchard, Margules & Friedlander, Lawrence A. Hamermesh, Widener University School of Law, Wilmington, DE, Andrew J. Pincus, [argued], Mayer Brown, Washington, DC, Attorneys for Appellants.

David L. Finger, [argued], Finger & Slanina, Wilmington, DE, Attorney for Appellee.

S. Mark Hurd, Morris, Nichols, Arsht & Tunnell, Wilmington, DE, Attorney for Amicus Curiae The Corporation Law Section of the Delaware State Bar Association.

Roy T. Englert, Jr., Robbins, Russell, Englert, Orseck & Untereiner, Washington, DC, Attorney for Amici Curiae The Chamber of Commerce of the United States of America and Business Roundtable.

Scott L. Nelson, Public Citizen Litigation Group, Washington, DC, Attorney for Amicus Curiae Public Citizen, Inc.

Bruce D. Brown, The Reporters Committee for Freedom of the Press, Arlington, VA, Attorney for Amici Curiae The Reporters Committee for Freedom of the Press and Twelve New Organizations.

Before: SLOVITER, FUENTES, and ROTH, Circuit Judges.

OPINION

SLOVITER, Circuit Judge.

This appeal requires us to decide whether the public has a right of access under the First Amendment to Delaware's state-sponsored arbitration program. Chancellor Strine and the judges of the Delaware Chancery Court (Appellants), who oversee the arbitrations, appeal a judgment on the pleadings entered in favor of the Delaware Coalition for Open Government (the “Coalition”). The District Court found that Delaware's proceedings were essentially civil trials that must be open to the public. Appellants dispute the similarities and argue that the First Amendment does not mandate a right of public access to Delaware's proceedings.

I.

In early 2009, in an effort to “preserve Delaware's preeminence in offering cost-effective options for resolving disputes, particularly those involving commercial, corporate, and technology matters,” Delaware amended its code to grant the Court of Chancery “the power to arbitrate business disputes.” H.B. 49, 145th Gen. Assemb. (Del. 2009). As a result, the Court of Chancery created an arbitration process as an alternative to trial for certain kinds of disputes. As currently implemented, the proceeding is governed both by statute and by the Rules of the Delaware Court of Chancery. See 10 Del.Code Ann. tit. 10, § 349 (2009); Del. Ch. R. 96–98.

Delaware's government-sponsored arbitrations are not open to all Delaware citizens. To qualify for arbitration, at least one party must be a “business entity formed or organized” under Delaware law, tit. 10 § 347(a)(3), and neither party can be a “consumer,” id.§ 347(a)(4). The statute is limited to monetary disputes that involve an amount-in-controversy of at least one million dollars. Id.§ 347(a)(5).

Once qualified parties have consented “by agreement or by stipulation” to avail themselves of the proceeding, they can petition the Register in Chancery to start arbitration. Id.§ 347(a)(1); Del. Ch. R. 97(a). The fee for filing is $12,000, and the arbitration costs $6,000 per day after the first day. Standing Order of Del. Ch. (Jan. 4, 2010). After receiving a petition the Chancellor selects a Chancery Court judge to hear the arbitration. See Del. Ch. R. 97(b); tit. 10, § 347(a).1 The arbitrationbegins approximately ninety days after the petition is filed, and, as the parties agreed in oral argument, is conducted in a Delaware courthouse during normal business hours. See Del. Chr. R. 97(e). Regular Court of Chancery Rules 26–37, governing depositions and discovery, apply to the proceeding, but the rules can be modified by consensual agreement of the parties. See id. at 96(c); id. at 26–37.

The Chancery Court judge presiding over the proceeding [m]ay grant any remedy or relief that [s/he] deems just and equitable and within the scope of any applicable agreement of the parties.” Id. at 98(f)(1). Once a decision is reached, a final judgment or decree is automatically entered. Id. at 98(f)(3). Both parties have a right to appeal the resulting “order of the Court of Chancery” to the Delaware Supreme Court, but that court reviews the arbitration using the deferential standard outlined in the Federal Arbitration Act. Tit. 10, § 349(c). Arbitrations can therefore only be vacated in relatively rare circumstances, such as when a party can prove that the “award was procured by corruption, fraud, or undue means” or that the “arbitrator [ ] w [as] guilty of misconduct.” 9 U.S.C. § 10; see also Metromedia Energy, Inc. v. Enserch Energy Servs., Inc., 409 F.3d 574, 578 (3d Cir.2005).

Both the statute and rules governing Delaware's proceedings bar public access. Arbitration petitions are “considered confidential” and are not included “as part of the public docketing system.” Tit. 10, § 349(b); Del. Ch. R. 97(4). Attendance at the proceeding is limited to parties and their representatives,” and all “materials and communications” produced during the arbitration are protected from disclosure in judicial or administrative proceedings. Del. Ch. R. 98(b).

If one of the parties appeals to the Supreme Court of Delaware for enforcement, stay, or vacatur, the record of the proceedings must be filed “with the Supreme Court in accordance with its Rules.” Id. at 97(a)(4). “The petition and any supporting documents are considered confidential and not of public record until such time, if any, as the proceedings are the subject of an appeal.” Id. The Delaware Supreme Court has yet to adopt rules that would govern the confidentiality of appeals from Delaware's arbitration program, and there is no record of a public appeal from an arbitration award.

In the District Court, the Coalition moved for judgment on the pleadings, arguing that the confidentiality of Delaware's government-sponsored arbitration proceedings violated the First Amendment. The District Court granted the Coalition's motion. The judges of the Delaware Chancery Court appeal.

II.

The District Court had jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1343, and we have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise de novo review over the District Court's grant of a motion for judgment on the pleadings. DiCarlo v. St. Mary Hosp., 530 F.3d 255, 259 (3d Cir.2008).

“The First Amendment, in conjunction with the Fourteenth, prohibits governments from ‘abridging the freedom of speech, or of the press....' Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 575, 100 S.Ct. 2814, 65 L.Ed.2d 973 (1980) (quoting U.S. CONST. amend. I). This protection of speech includes a right of public access to trials, a right first elucidated by the Supreme Court in Richmond Newspapers. In that case the Court found that a Virginia trial court had violated the First Amendment by closing a criminal trial to the public. See id. at 580, 100 S.Ct. 2814. Chief Justice Burger's opinion for the plurality emphasized the important role public access plays in the administration of justice and concluded that [t]he explicit, guaranteed rights to speak and publish concerning what takes place at a trial would lose much meaning if access to observe the trial could ... be foreclosed arbitrarily.” Id. at 576–77, 100 S.Ct. 2814.

The Court has since found that the public also has a right of access to voir dire of jurors in criminal trials, see Press–Enter. Co. v. Superior Court, 464 U.S. 501, 511, 104 S.Ct. 819, 78 L.Ed.2d 629 (1984) (“Press I ”), and to certain preliminary criminal hearings. See El Vocero de P.R. v. Puerto Rico, 508 U.S. 147, 149–50, 113 S.Ct. 2004, 124 L.Ed.2d 60 (1993) (per curiam) (preliminary criminal hearings as conducted in Puerto Rico); Press–Enter. Co. v. Superior Court, 478 U.S. 1, 10, 106 S.Ct. 2735, 92 L.Ed.2d 1 (1986) ( “Press II ”) (preliminary criminal hearings as conducted in California).

We have found a right of public access to civil trials, as has every other federal court of appeals to consider the issue. See Publicker Indus., Inc. v. Cohen, 733 F.2d 1059 (3d Cir.1984); see also F.T.C. v. Standard Fin. Mgmt. Corp., 830 F.2d 404, 410 (1st Cir.1987); Westmoreland v. Columbia Broad. Sys., Inc., 752 F.2d 16, 23 (2d Cir.1984); Rushford v. New Yorker Magazine, Inc., 846 F.2d 249, 253 (4th Cir.1988); Brown & Williamson Tobacco Corp. v. F.T.C, 710 F.2d 1165, 1179 (6th Cir.1983); In re Cont'l Ill. Sec. Litig., 732 F.2d 1302, 1309 (7th Cir.1984). In addition to finding a right of public access to civil trials, we have also found a First Amendment right of the public to attend meetings of Pennsylvania city planning commissions and post-trial juror examinations. See Whiteland Woods, L.P. v. Twp. of W. Whiteland, 193 F.3d 177, 180–81 (3d Cir.1999) (planning commissions); United States v. Simone, 14 F.3d 833, 840 (3d Cir.1994) (post-trial juror examinations). We have declined, however, to extend the right to the proceedings of judicial disciplinary boards, the records of state environmental agencies, deportation hearings, or the voting process. See First Amendment Coal. v. Judicial Inquiry & Review Bd., 784 F.2d 467, 477 (3d Cir.1986) (en banc) (judicial disciplinary board); Capital Cities Media, Inc. v. Chester, 797 F.2d 1164, 1175–76 (3d Cir.1986) (en banc) (records of state environmental agencies); N. Jersey Media Grp., Inc. v. Ashcroft, 308 F.3d 198, 209 (3d Cir.2002) (deportation hearings); PG Publ'g Co. v. Aichele, 705 F.3d 91, 112 (3d Cir.2013) (voting process).

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