Federal Court Says Delaware’s Secret Arbitration Violates First Amendment

WILMINGTON, Del. — Delaware’s effort to strengthen its reputation as the center of business incorporation in the United States and home to one of the world’s most respected business courts has run into a First Amendment roadblock.

A federal appeals court panel ruled 2-1 on Wednesday to affirm a decision declaring that a 2009 state law that allowed Delaware’s Court of Chancery judges to preside over secret arbitration in high-stakes business disputes was unconstitutional.

“The benefits of openness weigh strongly in favor of granting access to Delaware’s arbitration proceedings,” Judge Doris Sloviter wrote for the panel majority.
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