Diversity and the Growing Disparity Between Federal and Delaware Courts

Delaware determines for the entire country the substantive standards for board behavior.  Fiduciary duties are a matter of common law.  Application depends upon the factual context.  Few jurisdictions have the depth of case law that allows for certainty in interpreting how fiduciary duties will work in specific  circumstances.  As a result, most if not all jurisdictions eventually turn to Delaware as an important source of authority.

The courts are, however, not diverse.  We have noted this before.  There is a lack of gender and racial diversity on the Delaware courts.  With similar backgrounds, there is also arguably a lack of diversity with respect to experiences and viewpoints.  We note this not because it is new but because the distinction between the Delaware courts and the federal courts in this regard is becoming more pronounced. 

As a recent article in the Washington Post discussed:

• During Obama’s first term, 37 percent of his confirmed judges were nonwhites, compared with 19 percent for President George W. Bush and 27 percent for President Bill Clinton. The trend is similar on gender: 42 percent of Obama’s first-term judges were women, compared with 21 percent for Bush and 30 percent for Clinton.

As a result, of the 874 federal judgeships, "39 percent are held by women and 37 percent are held by non-whites".  Moreover, the trend will continue. Of the 35 pending nominees, 17 are women, 15 are ethnic minorities and five are openly gay.  Id.  The percentages will presumably increase as President Obama's second term continues. 

Greater diversity will likely enhance the credibility of the decision making process.  Perhaps a more diverse bench in Delaware would have the safe effect.