WDEL Blog: Allan Loudell

Victory for transparency; probably another revenue hit for Delaware: U.S. Supreme Court refuses to review "secret courts"

The U.S. Supreme Court has denied a request by members of the Delaware Court of Chancery to hear an appeal of the Third U.S. Circuit Court of Appeals. The appeals court had ruled that Delaware's confidential judicial arbitration statute violated the First Amendment.

Delaware came up with the program in 2009 to give Delaware's courts a means to compete with private arbitration, which was finding increasing favor with businesses.

As those of us in Delaware know all too well, the First State has derived substantial revenue (translation: lower taxes for the rest of us!) as the epicenter for corporate litigation with the Delaware Chancery Court's business expertise. To offset Delaware losing some of its luster in this area, the General Assembly approved a law offering new benefits to corporations: Arbitration behind closed doors producing enforceable legal decisions.

Critics called it not only unconstitutional, but an extraordinary way that rich litigants could, in essence, "rent" judges and courthouses. No matter that taxpayers support these judges and institutions.

The Coalition for Open Government sued. Transparency advocates argued Delaware was accelerating the trend to the privatization of judging and limiting access to courts.

Supporters of the Delaware system argued arbitration behind closed doors kept sensitive business information secret, and headed off unwanted publicity.

Bottom line: A victory for transparency, but (probably) a longer-term drain on the popularity, and hence the revenue generated by Delaware's Chancery Court.

See this REUTERS story via The CHICAGO TRIBUNE's website---


You can hear my interviews with John Flaherty, President of the Delaware Coalition for Open Government, and Rich Heffron, President of the Delaware State Chamber of Commerce...

Audio Here

Posted at 11:01am on March 24, 2014 by Allan Loudell

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Comments on this post:

Mon, Mar 24, 2014 4:25pm
It's sad when one's high principles cost money... But it is probably for the best.

Mon, Mar 24, 2014 7:24pm
I'd like to buy a chance at some chancery.

Tue, Mar 25, 2014 10:47am
Today the Supreme Court hears the Hobby Lobby case. The decision will be in June, most likely announced the last day before they break.

Tue, Mar 25, 2014 11:44am
So we find out in June if SCOTUS thinks that U.S. citizens still have a First Amendment to protect our right to practice our religious beliefs? Then again, this is the same group that said it was OK to force all citizens to purchase a product (insurance)...which doesn't sound very Constitutional either.

Tue, Mar 25, 2014 12:38pm
I think the main point about the Hobby Lobby case is that first the Supremes must decide if a for-profit corporation is a person with religious entitlements. If so, this is great news for any corporation who, for instance, objects to paying school taxes on their property because the owners object to the subject matter taught in the school. Or income taxes because the owners are pacifists and object to military expenditures.

Tue, Mar 25, 2014 12:47pm
dunmore: I'm pretty sure it's about contraception/abortions and whether or not a privately-owned company can be forced to provide these services if they go contrary to one's religious beliefs...(btw, HobbyLobby's health insurance covered quite a few contraceptives...just not all that exist). This case is to decide if 0bamaCare trumps religious rights/beliefs/practices.

Tue, Mar 25, 2014 1:18pm
The case is superficially about contraception, but the ramifications go much further. For instance, could a corporation's owners use their religious beliefs to prevent their employees from getting a blood transfusion? Or, if they were Rastafarians, could they empower their employees to smoke weed on the job?

Here is a little discussion of the issues from the NYT. It is interesting to note the large number of groups that have submitted amicus briefs. Clearly they see the possible ramifications.


Mike from Delaware
Tue, Mar 25, 2014 1:55pm
I believe the real issue here is not that an employer can keep a women from getting those birth control / abortion things; they can't tell her she cannot get or use such things. But the core issue is, does the employer have to PAY for them? The issue with Obamacare is not the idea of providing health-care insurance for folks, but that the government is telling you what you have to provide [as in paying for], even if you have a religious belief that says NO to providing and paying for such things.

So essentially, Hobby Lobby's owner is being forced to either suck it up and pay for things that go against his religious beliefs OR not provide insurance at all, and then be fined, thus forcing those employees to have to go on their own to the Obamacare Exchange and buy their own policy. Interestingly, according to NPR's coverage of this story this morning on Morning Edition, the fine, whoops, I mean the TAX, would cost Hobby Lobby less than what providing insurance would. The owner did say that the company wants to provide insurance for its employees, but do not want to provide those other things due to their faith beliefs.

So if the Supremes say he must pay for those things, then chances are those employees will end up having to buy their own insurance as Hobby Lobby will probably no longer provide it as an employee benefit. So who won? No one. This is an overreach by the government. This is what's got folks ticked off about Obamacare and what could really help Republicans this November.

Tue, Mar 25, 2014 2:20pm
MFD and Earl, I think you are both missing the forest for the trees. Yes, this case is about birth control and who pays, but the bigger picture items are: 1) Is a private for-profit corporation a person and can thus claim religious entitlements?, and 2) What are the possible limits on religious exemptions and their ramifications?

By ramifications I mean this. My business is a corporation located in New Castle County. Could I therefore refuse to pay school taxes because my religion teaches the literal truth of the Bible and kids are being taught about evolution in school?

I think it is well-established that private individuals cannot claim a religious exemption to paying taxes, so if the Supremes hold up the Hobby Lobby claims, that means that not only are corporations people, but they are privileged above other people.

Tue, Mar 25, 2014 2:56pm
Mike: Well said...you pretty much summed up everything I was going to say in response to dunmore.

Only thing I'll add is that our freedom to practice our religion is a guaranteed right under our Constitution...health-care insurance is not.

Health care, housing, and other "rights" may be guaranteed in the Communist Manifesto...not the U.S. Constitution.

And dunmore, I see your point-of-view but don't see that as the true battle going on between the Government and our religious freedom.

If a restaurant owner were a devout follower of Islam... could the owner be forced to serve his/her customers bacon if the Government mandates it as law? Could the Government force all the men at this same business to shave their beards? Ridiculous?...Yes, but not nearly as ridiculous as making a Christian-owned business provide health-care coverage that is (in the eyes of many Christians) basically ending the life of a baby.

Mike from Delaware
Tue, Mar 25, 2014 3:30pm
Dunmore and EarlGrey: I get the point Dunmore is trying to make, and sure the "legal eagles" on the government side will use that as an argument against Hobby Lobby.

With many businesses, I'm assuming Hobby Lobby is like this, it IS the owners' money vs. a large corporation like a DuPont, Ford, or G.M., where it's not the CEO's money. THAT to me is an important difference.

So in that sense, YES if it actually IS the owner's money that's paying then it is a person, vs. corporations such as G.M. or DuPont that don't represent a person's personal money.

EarlGrey offered good analysis with the Islamic restaurant owner.

I don't see why Obamacare can't offer those birth-ontrol/abortion things in a separate form where the women who want that can get it and Hobby Lobby and other such employers aren't involved. They could do the same thing with Erectile Disfunction pills {Viagra] too so it's not just female stuff thus ending another argument that its discriminatory because it's only female items.

But Obama and the gang have their agenda of providing for FREE all birthcontrol and abortion things, so if the owner at Hobby Lobby can't in good conscience pay for those things for his female employees, he'll just have to NOT offer insurance for any of his employees and they'll just have to buy their own via the Obamacare Exchanges.

I seem to remember some issue a couple of years ago with some Catholic prenatal clinics serving the poor and seems like, I believe were up in Boston, that were told they had to offer abortions since they were receiving some government aid to help keep those clinics open, so the Catholic's said NO we can't do that and closed the prenatal clinics. Yep the government got its way. That ole Reagan saying springs to mind: Hi, I'm from the government and I'm hear to help.

Tue, Mar 25, 2014 4:15pm
EarlGrey and MFD - I see your concerns about protecting your religious liberties.

I just read (skimmed, because some of the legal arguments are way beyond me) through the transcript of the oral arguments. I think this case will be decided for the government because a lot of the discussion was about "substantial burden". That is, does having to comply with the ACA, and choosing not to, substantially burden Hobby Lobby? Their lawyer even said that it wouldn't. The tax for not providing health care is $2000 per year, vs. an estimated $4000 - $12,000 per year for providing it, so the company would actually save money by not providing health insurance at all.

The transcript is here:


What shows that this case is really about more than contraception is the concerned parties who submitted amicus briefs. The list is below, although I don't recommend anyone actually read them, just the parties' names. Delaware is part of one brief; they are concerned about the possible effects on state and local laws.


Wed, Mar 26, 2014 8:21am
Hobby Lobby (owned by evangelical Christians) is the big name we keep hearing mentioned but there is another business from neighboring PA also involved in this case...Pennsylvania-based cabinet-manufacturer Conestoga Wood Specialties, owned by Mennonites.

The Amish (and some Mennonites can opt out of the electric grid/smart meters, public education, 0bamaCare and Social Security)...is Conestoga Wood Specialties different because they are considered Big Business?

Wed, Mar 26, 2014 9:04am
"The tax for not providing health care is $2000 per year, vs. an estimated $4000 - $12,000 per year for providing it, so the company would actually save money by not providing health insurance at all."~dunmore

So just pay the "Liberty Tax" and your business can continue to operate? And what is to guarantee that the tax will not INCREASE each year?...nothing.
This is worse than the Tea Tax that sent America's Founding Fathers over the edge and led them to Party in Boston.

Wed, Mar 26, 2014 10:51am
Earl - re: Conestoga - The difference is that this business itself is not a religion. Religions are tax-exempt, not-for-profit organizations; this is a for-profit, tax-paying company.

As for the "Liberty Tax", no guarantee it won't go up, nor any that it won't go down. Just a cost of doing business, like paying fines so you can pollute, or paying off politicians.

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