Stephen M. Bainbridge is William D. Warren Distinguished Professor of Law, UCLA School of Law and serves as the WLF Legal Pulse’s Featured Expert Contributor, Corporate Governance/Securities Law.
What is the judicial role? Are judges mere umpires who call balls and strikes based solely on rules made by others? Or are judges lawmakers in their own right, creating laws and making public policy? The U.S. Supreme Court has just agreed to hear a case in which those questions could play a determinative role. In addition to being of great jurisprudential interest, however, the case will attract great attention from corporate lawyers, because it may call into question the validity of the judiciary of the state that dominates corporate law.
Delaware’s state constitution imposes two unique requirements on the state judiciary that differentiates its courts from those of all other states. Under the bare majority rule, no more than half of the total number of the members of the state Supreme and Superior courts and the Chancery Court can be from the same political party (50 percent plus one if there is an odd number of judges). Under the major party rule, those judges must be from a “major” political party.
James R. Adams is a Delaware lawyer who has been frustrated in his search for a Delaware judicial position because he is a political independent. Adams sued Delaware Governor Carney in federal court seeking to have the Delaware provisions declared unconstitutional. Delaware argued that Adams lacked standing and, in the alternative, that the judicial-selection provisions fell within the policymaker exception to the First Amendment’s ban on conditioning state government positions on membership in a specific political party. The district court ruled for Adams on both grounds.
On appeal, the Third Circuit held that Adams had sufficiently pled Article III standing.1 As to the merits, the Third Circuit addressed solely the major party rule. The court nevertheless struck down both it and the bare majority rule on grounds that the latter was not severable from the former.
Delaware’s filed a petition for a writ of certiorari with the U.S. Supreme Court, seeking review solely of the Third Circuit’s decision on the merits. In granting the state’s petition, however, the Supreme Court required the parties to also address the question of Adams’ standing.
The Supreme Court’s request for briefing on the standing issue suggests that the Court may be zeroing in on two key weaknesses in Adams’ case. First, Adams had been a registered Democrat until February 2017. While registered as a Democrat, Adams had once applied for a position on the state’s Family Court, as to which the major party rule does not apply, but had never applied for a position on any of the three courts to which that rule does apply. Second, since re-registering as an independent in 2017, Adams had considered applying for a Superior Court vacancy and a Supreme Court vacancy, but had not in fact done so. The Third Circuit found that Adams had nevertheless suffered the requisite injury on fact because it would have been futile for him—as an independent—to have done so. The Third Circuit also rejected Delaware’s argument that prudential considerations mitigated against recognizing Adams as having standing. Accordingly, it seems plausible that the Justices who voted to grant the petition may be teeing this cases up as an opportunity to clarify standing rules.
It is the merits that make the Adams case worthy of attention, however. In Elrod v. Burns,2 and its progeny, the Supreme Court has broadly invalidated the spoils system of political patronage. In general, a state government cannot terminate nor deny employment solely because of political party affiliation:
Employees who do not compromise their beliefs stand to lose the considerable increases in pay and job satisfaction attendant to promotions, the hours and maintenance expenses that are consumed by long daily commutes, and even their jobs if they are not rehired after a ‘temporary’ layoff. These are significant penalties and are imposed for the exercise of rights guaranteed by the First Amendment. Unless these patronage practices are narrowly tailored to further vital government interests, we must conclude that they impermissibly encroach on First Amendment freedoms.3
There are two principal exceptions to that ban. First, “where membership in a political party is essential to the discharge of the employee’s governmental responsibilities.”4 In Branti v. Finkel, for example, the Supreme Court suggested that “if a State’s election laws require that precincts be supervised by two election judges of different parties, a Republican judge could be legitimately discharged solely for changing his party registration.”5 As applied to Adams, however, that exemption at most might save the bare majority rule. It does not speak to the major party rule.
Second, “if an employee’s private political beliefs would interfere with the discharge of his public duties, his First Amendment rights may be required to yield to the State’s vital interest in maintaining governmental effectiveness and efficiency.”6 Positions whose jobs entail policymaking fall squarely within this exception.7
In Adams, the Third Circuit rejected Delaware’s argument that judges fall squarely within that exception. The Court acknowledged that in doing so it was creating a circuit split:
In Kurowski v. Krajewski, the Seventh Circuit determined that the guiding question in political affiliation cases was ‘whether there may be genuine debate about how best to carry out the duties of the office in question, and a corresponding need for an employee committed to the objectives of the reigning faction,’ and answered that question in the affirmative with respect to judges and judges pro tempore. In Newman v. Voinovich, the Sixth Circuit similarly concluded that judges were policymakers who could be appointed on the basis of their partisan affiliation.8
In rejecting those decisions, the Third Circuit held that, to the extent judges make policy, they must do so without being swayed by partisan interests. As the court explained, “the question before us is not whether judges make policy, it is whether they make policies that necessarily reflect the political will and partisan goals of the party in power.”9 The court denied that Delaware judges could or should do so.
In an ideal world, the Third Circuit’s view of judges as independent, non-partisan decision makers would be correct.10 In the real world, the judicial confirmation wars would not be so fraught if judges were not increasingly perceived as partisan players. Indeed, as Professor Michael Dorff explained, in today’s reality “party affiliation is a fair proxy for policy views, which play a substantial role in a judge’s decision in the sorts of contested cases that lead to appellate litigation.” Even though many judges “may sincerely believe that their decisions are governed by the law, their political views subtly color their legal decisions—either knowingly or via cognitive biases, motivated reasoning, or some other mechanism—according to political scientists.”11
Although Delaware’s mode of judicial selection is unique, in many states, judges are elected by popular vote. In some, judicial elections are explicitly partisan. Even in states where judicial elections are nominally non-partisan, as Justice Sandra Day O’Connor observed, they are “becoming political prizefights where partisans and special interests seek to install judges who will answer to them instead of the law and the constitution.”12 It is thus hard to see how the Third Circuit’s quaint view of the judicial role can be limited to Delaware. Instead, it calls into question the validity of judicial elections across the board.
Let us suppose, however, that the Supreme Court manages to find a way to uphold the Third Circuit’s decision, while preserving elected state judiciaries in general. Would anyone outside Delaware care?
Delaware argues that the nation as a whole has a strong interest in preserving the current mode by which the state selects judges. The state correctly points out that Delaware is the dominant source of corporate law in this country. Sixty percent of the Fortune 500 and more than half of the corporations listed on the New York Stock Exchange are incorporated in Delaware, which means corporate governance disputes involving these economically vital companies are governed by Delaware law. Delaware has a larger body of corporate law than that of any other state, moreover, which is widely regarded as authoritative by both federal courts and courts of other states.
Delaware contends that the major party and bare majority rules promote partisan balance, which lessens the risk that judicial decisions will consistently skew in favor of one party or the other. The state further contends that the high degree of consensus found in Delaware supreme court decisions—which are usually unanimous—likewise results from maintaining a strict partisan balance. As former Delaware Chief Justice Veasey argued, the partisan balance required by the state constitution “has served well to provide Delaware with an independent and depoliticized judiciary and has led, in my opinion, to Delaware’s international attractiveness as the incorporation domicile of choice.”13
It nevertheless seems implausible that the quality of Delaware corporate law would suffer significantly were the constitutional provisions in question to be struck down. As I have observed elsewhere:
Delaware benefits greatly from its dominance. Delaware gets a significant percentage of state revenues from incorporation fees and franchise taxes, typically over 20% of the State’s budget. Delaware’s government thus has a very strong interest in maintaining Delaware’s dominant position.14
Delaware’s judges have just as much of an incentive to maintain that position as does the state legislature. It is well known that the “Delaware bar plays a central role in selecting justices, and it can be expected to recommend individuals who have a natural affinity to the corporate bar.”15 The Delaware bar’s prominent role and its preference for centrist judges who can be depended upon to make sound corporate law is highly unlikely to change even if the Supreme Court was to side with Mr. Adams.
Once they are elevated to the bench, moreover, Delaware jurists have strong reputational incentives to avoid radical changes in the direction of Delaware law. The Delaware judiciary has achieved a well-deserved “reputation as elite, national arbiters of corporate law.”16 They therefore receive a level of media attention to which few other state court judges—especially trial court judges—can aspire. They routinely get invited to headline high-profile academic and professional conferences to which other state court judges—especially at the trial court level—rarely receive. Indeed, some argue that the Delaware courts have achieved “a reputation that is unmatched by any other state or federal court.”17 Having achieved that status, it would be surprising if the Delaware judiciary did not seek to preserve it.
In sum, judges are lawmakers and policymakers whose preferences doubtless reflect their partisan allegiances at least at a subconscious level. The Supreme Court thus should reverse the Third Circuit. As a practical matter, however, it is doubtful that an affirmance would do much to change that part of Delaware law about which the country as a whole cares most.
- Adams v. Gov. of Delaware, 922 F.3d 166 (3d Cir. 2019), cert. granted sub nom. Carney v. Adams, 19-309, 2019 WL 6647103 (U.S. Dec. 6, 2019). The Third Circuit agreed with Delaware that Adams lacked standing to challenge the provisions of the Delaware constitution governing selection of judges for the family and common pleas courts, which have a bare majority rule but lack the major party limitation.
- 427 U.S. 347 (1976).
- Rutan v. Republican Party of Illinois, 497 U.S. 62, 74 (1990).
- Branti v. Finkel, 445 U.S. 507, 518 (1980).
- Id. at 517.
- See Rutan, 497 U.S. at 70 (stating that “a government can meet its need for politically loyal employees to implement its policies by the less intrusive measure of dismissing, on political grounds, only those employees in policymaking positions”).
- Adams, 922 F.3d at 180.
- Id. at 179.
- See Stephen M. Bainbridge, Social Propositions and Common Law Adjudication, 1990 U. Ill. L. Rev. 231 (1990) (arguing that judges should only consider policies having substantial social support).
- Brian Z. Tamanaha, The Several Meanings of “Politics” in Judicial Politics Studies: Why “Ideological Influence” Is Not “Partisanship”, 61 Emory L.J. 759, 762 (2012).
- Richard B. Saphire & Paul Moke, The Ideologies of Judicial Selection: Empiricism and Transformation of the Judicial Selection Debate, 39 U. Tol. L. Rev. 551, 564 n.82 (2008) (quoting former Justice O’Connor).
- E. Norman Veasey & Christine T. Di Guglielmo, What Happened in Delaware Corporate Law and Governance from 1992–2004?, 153 U. Pa. L. Rev. 1399, 1402 (2005).
- Stephen M. Bainbridge, Fee-Shifting: Delaware’s Self-Inflicted Wound, 40 Del. J. Corp. L. 851, 869–70 (2016).
- David A. Skeel, Jr., The Unanimity Norm in Delaware Corporate Law, 83 Va. L. Rev. 127, 158-59 (1997).
- John Armour, Bernard Black, & Brian Cheffins, Delaware’s Balancing Act, 87 Ind. L.J. 1345, 1389 (2012).
- Robert B. Thompson & Randall S. Thomas, The New Look of Shareholder Litigation: Acquisition-Oriented Class Actions, 57 Vand. L. Rev. 133, 165 (2004).