November 15, 2011
Chancellor Chandler and Three Important Things to Know/Remember
Posted by joanheminway

Since Afra stole my original idea (!), I will not use my Master's Forum posting to cover the Airgas opinion.  I agree with what Afra says about the decision in that case and am adding excerpts from it to the second edition of the business associations casebook that I coauthor.

Instead, I will comment briefly on Chancellor Chandler's remarks issued in connection with the dedication of the Adolf A. Berle, Jr. Center on Corporations, Law and Society two years ago.  These remarks sit at the intersection of several topics important to current and future legal professionals (especially those of us engaged with Delaware corporate law), among them:

  • the ex post and immortal nature of judicial decision making; 
  • Adolf Berle's contributiions to the theory, doctrine, and practical aspects of corporate governance as a compinent of corporate law; and 
  • the Delaware judicial tradition of public service to the bench, bar, students, and law academy through law review and law journal commentary.

On the first of these three topics, Chancellor Chandler initially observes that "[l]aw is, in many ways, a backwards-looking field. We litigate over facts that have already occurred, challenge deals that have already been signed, and apply rules of decision based on previously-established precedent or statutes already enacted."  He says nothing groundbreaking here, but he uses this observation as a jumping-off point for commentary on the value associated with actively using the past to shape the present and future (rather than merely memorializing the past).  His conclusion?  "It is through . . . ongoing dialogue with the text that the subject matter still lives."  A great thought that I will keep in mind as I go back into the classroom in the morning.

On Adolf Berle's contributions to corporate governance, Chacncellor Chandler notes that "Berle was one of the original scholars to recognize the core concern of corporate law: the separation of ownership from control."  He goes on to say that "Berle articulated the governing premise of the fiduciary duties that now inform nearly every aspect of Delaware corporate law." He adds that "Berle put this notion of fiduciary duties in context by articulating a two-part test for review of managerial action. The first level of review is the technical power conferred on managers by articles of incorporation, bylaws, and statutory law. The second level of constraint consists of the common law fiduciary duties." Chancellor Chandler characterizes these matters as meaningful to his work. These legacies of Adolf Berle also are instrumental in my teaching of corporate law.  I have especially been harping on the last point this semester--the one about the two-part test for managerial action.  The Chancellor's summary is both pointed and apt.

The third important topic that I identified is illuminated (and refuted) in, among other places, J.W. Verret's 2007 article with Justice Myron Steele of the Delaware Supreme Court and a Renee Jones's posting here at The Glom from back in January 2008 (and the related comments).  I will not expand on those commentaries here.  I will add, however, that I always have found my conversations with Delaware jurists to be informative and helpful (even where I disagree with the substance of what they say), and I see their authorship of pieces in law reviews and journals as extensions of those conversations.  Chancellor Chandler's remarks on the Center's dedication are part of that tradition.

So . . . thanks, Chancellor Chandler, for engaging us with these topics and the many others that you have taken on in your years on the Chancery Court.  As we say here in East Tennessee, "I appreciate you."  

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