DealLawyers.com Blog

Earlier this year, some commentators questioned whether the Delaware Chancery Court’s traditional use of letter opinions to address preliminary and procedural matters was being gradually jettisoned in favor of greater reliance on oral “bench rulings” – which are in turn becoming increasingly substantive.

The M&A Law Prof Blog summarized media reports about the potential shift:

For many years the courts have admonished us all not to pay attention to transcript rulings as they do not create precedent. Sure, that makes sense if the rulings are off the cuff rulings from the bench. But there appears to be “an increasingly structured approach by the Court in rendering oral rulings, including recitations of underlying facts and explicit citation to legal authorities — and may even resolve legal questions that are more than simply ministerial, or intended to keep litigation moving forward.”

There’s no denying that bench rulings have become more substantive in recent years — for example, see this White & Williams memo on the chancery court’s 2014 bench ruling in Swomley v. Schlecht — but why we should care?  Here’s one reason:

One has to pay for transcripts while letter opinions and memo opinions are free as part of the public record. Also, transcripts don’t get hoovered up in many of the electronic legal databases.

This suggests that the increased use of bench rulings could make the already “inside baseball” world of Delaware corporate litigation even more insular.  Is this kind of a shift happening?  Well, if changes in the number of letter opinions are a fair barometer, I think the jury’s still out.  I recently visited the Chancery Court’s website, and – based on a word search for “letter opinion” – here’s what I found:

– 58 letter opinions were issued through September 30, 2016, compared to 78 through the same date last year.

– An average of 92 letter opinions per year were issued from 2009 through 2015. In 2016, the Court is on a pace to issue 77 letter opinions.

That looks like a pretty dramatic drop.  But the analysis isn’t as straightforward as these numbers make it appear.

There’s a lot of volatility year-to-year in the number of letter opinions that the Chancery Court issues, so a single year’s drop – even a significant one – isn’t necessarily predictive.  For example, in 2012, it issued only 70 letter opinions, while that number jumped to 122 the following year.

Furthermore, from 2009 – 2015, letter opinions comprised between 35% and 45% of the total opinions & orders the Court issued each year.  Although 2016 has seen a sharp drop in the number of letter opinions, total opinions & orders are down sharply as well.  As a result, letter opinions still represent 41% of the total opinions & orders issued through September 30, 2016 – well within historical averages.

There’s a very significant missing piece to the analysis – what I don’t have any data on are the number of bench rulings themselves.  But overall written opinions are down significantly, and bench rulings might be taking up some of the slack.

– John Jenkins