Leo Strine, the outspoken chief judge of Delaware’s nationally important business court, has been nominated to lead the state’s Supreme Court, Delaware Governor Jack Markell said last Wednesday.
The move, if confirmed, would take Strine’s outsize persona away from the day-to-day rough-and-tumble of adjudicating corporate cases and put him in the more staid world of the state Supreme Court.
A majority of U.S. publicly traded companies incorporate in Delaware, in part so they can be governed by its well-established law and courts.
The Supreme Court is the final arbiter of the state’s laws, including its corporate law.
Until now, Strine, 49, has been the chancellor or head of the business court, the Court of Chancery, where individual judges decide cases without a jury.
He has earned wide respect for meaty, 100-page legal opinions that defy easy labels as friendly to companies or shareholders.
But some lawyers have grumbled about a domineering style, and he frequently raises eyebrows with courtroom digressions beyond the law that have occasionally gotten him into hot water.
“He wouldn’t get through the Senate of the United States based on those comments,” Andrew Moore, a former justice on the Delaware Supreme Court, said of Strine’s asides on religion.
Nevertheless, Strine has been a full-throated cheerleader for Delaware’s courts, which are a key reason businesses choose to incorporate in the state. Business fees generate up to 40 percent of the state’s general revenue.
“The name of Strine being known in the corporate world will be good for the franchise,” said a local attorney, who did not want to be identified speaking about the sensitive topic.
Among his recent rulings, Strine prevented investor Carl Icahn from upending the Dell Inc. buyout, and he blocked Martin Marietta’s $4.9 billion hostile bid for its larger rival, Vulcan Materials.
He made it easier for a controlling shareholder to buy out public stockholders in a case involving Ron Perelman’s acquisition of M&F Worldwide and slashed fees for shareholder attorneys whose work he thought was wanting.
But controversy is never far away.
In identifying potential conflicts of interest at Goldman Sachs over a deal by Kinder Morgan to buy El Paso, Strine mockingly compared a call by Goldman Sachs CEO Lloyd Blankfein to the lyrics of Lionel Richie.
Just after becoming chancellor in 2011, he awarded what was arguably one of the highest legal fees—$305 million, which worked out to $35,000 an hour—in a case involving Southern Copper Corp.
“What is it about lawyers getting money that’s ickier than investment bankers or other people in society?” Strine asked when he approved the fee, noting that the lawyers had battled through a trial rather than accept an easy settlement.
Some saw the high fees as an attempt to reverse a trend by shareholders to file cases in supposedly friendlier courts outside the state.
Just weeks earlier, Strine declared at a New York law conference that “Delaware is open for business” and called on those lawyers in attendance who had received multimillion-dollar fee awards by his court to stand up and identify themselves.
Outspokenness May Count Against Strine
In a statement on Wednesday, Strine said: “If the Senate confirms me to this important position, I will do everything I can to repay the confidence they and the governor will have entrusted in me.”
Strine’s nomination to the state Supreme Court must be confirmed by the state’s 21-member Senate, where the governor’s Democratic party holds 13 seats.
The biggest mark against the nomination is likely to be Strine’s tendency to speak his mind.
His musings came to national attention in 2012 when a transcript from a hearing involving fashion entrepreneur Tory Burch made the rounds.
Strine livened a routine scheduling hearing by comparing Burch’s dispute to a “drunken WASP-fest” and referred to one attorney’s beard as a “Hasidic rattail.” He also inquired if Burch or her former husband were Jewish.
Strine, who has said he was raised a Catholic, later said he regretted what he called attempted humor.
There has been no suggestion among attorneys who have appeared in front of him that he is anti-Semitic.
The job of chief justice has come to be associated with the even temperament of Myron Steele, who retired in November after nine years on the job.
Unlike the chancellor, who alone oversees high-profile cases, the chief justice leads a court of five that tends to rule unanimously.
The chief justice also must maintain relations with lawmakers to ensure funding for the courts.
Strine’s dealings with politicians in Dover has had a rocky history. In 2013, the News Journal newspaper published excerpts of emails from Strine to lawmakers that revealed the chancellor was taking an unusually active role in drafting legislation, raising questions about blurring the separation of powers of government.
Strine, who was chief legal counsel to former Governor Thomas Carper, joined the Court of Chancery in 1998 after one of the closest Senate votes in memory.
Critics at the time said that Strine’s old firm, Skadden, Arps, Slate, Meagher & Flom, wielded too much influence in the state.
But by the time he was nominated to be chancellor in 2011, Strine was easily confirmed.
Chatter in Wilmington has already focused on Andre Bouchard as a possible replacement on the Court of Chancery. He currently leads the small litigation firm Bouchard Margules & Friedlander, which Markell’s administration has tapped to represent Delaware in various federal lawsuits.
Bouchard chaired the judicial nominating commission that sent Strine’s name to the governor, which could raise questions about conflicts of interest if he were to be nominated to the Court of Chancery.
Bouchard did not immediately respond to a request for comment.