November 8, 2012 / 1:05 AM / 8 years ago

Del. high court to Chancery chief: Keep world views to yourself

WILMINGTON, Del, Nov 7 (Reuters) - The outspoken chief judge of Delaware’s Court of Chancery received a rebuke on Wednesday from the state’s Supreme Court, which told him to keep his “world views” out of his legal rulings.

Chancellor Leo Strine, whose opinions interpret Delaware’s widely adopted corporate law and help shape Wall Street dealmaking, often contain at least a few colorful comments or observations, and his courtroom asides are legendary.

For example, in an opinion in February, Strine said evidence of a phone call by Goldman Sachs Group Inc Chairman Lloyd Blankfein to El Paso Chief Executive Douglas Foshee brought Lionel Richie’s 1980s hit “Hello” to mind.

In a ruling on Wednesday, the Supreme Court took Strine to task not for his decision in a case about Auriga Capital, which the court upheld, but for a 10-page detour on the arcane issue of whether limited liability companies have default fiduciary duties.

The Supreme Court wrote that if Strine wanted to “ruminate on what the proper direction of Delaware law should be” he should do so in law review articles and speeches, not in his opinions.

“We remind Delaware judges that the obligation to write judicial opinions on the issues presented is not a license to use those opinions as a platform from which to propagate their individual world views on issues not presented,” the Supreme Court wrote.

The Supreme Court dedicated five pages of its 34-page ruling to reining in Strine, saying his analysis was based on a flawed reading of several cases.

Strine did not immediately respond to a message left with his chambers seeking comment.

While Wednesday’s ruling was per curiam, or the work of the whole court, it may have its roots in a simmering dispute between Strine and Supreme Court Chief Justice Myron Steele.

Steele took issue with the section of Strine’s opinion on fiduciary duties during a hearing on the Auriga Capital case in September. “Why did he go to this whole diatribe, for lack of a better word, of about how ignorant people are who think other than he does about whether the default position is (that) fiduciary duties apply or (do) not apply?” Steele said at the time.

As well as his colorful opinions, Strine is also known for his courtroom digressions, which have ranged from discussions of incentives driving investor bankers to the NBC television show “America’s Got Talent” and the mysteries of the Catholic faith.

At a hearing last week, Strine called a dispute between fashion star Tory Burch and her former husband a “drunken WASP-fest,” and spent several minutes discussing where white Anglo-Saxon Protestants can pick up Izod and Polo brand shirts on the cheap.

The Chancery case is Auriga Capital Corp v Gatz Properties LLC, No. 4390. The Supreme Court appeal is Gatz Properties LLC v Auriga Capital Corp No. 148, 2012.

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