Leo E. Strine, Jr.

Austin Wakeman Scott Lecturer on Law

Fall 2017

Langdell Library 327

617-998-1554

Assistant: Kathy Goldstein / 617-496-4183

Biography

On February 28, 2014, Leo E. Strine, Jr., became the 8th Chief Justice of the Delaware Supreme Court.  Before becoming the Chief Justice, Chief Justice Strine had served on the Delaware Court of Chancery as Chancellor since June 22, 2011, and as a Vice Chancellor since November 9, 1998.  While serving on the Court of Chancery, Chief Justice Strine wrote numerous opinions, particularly in the area of corporation law.  Among the opinions Chief Justice Strine has authored are:  Boilermakers Local 154 Ret. Fund v. Chevron Corp., --- A.3d ---, 2013 WL 3191981 (Del. Ch. 2013); In re MFW S’holder Litig., 67 A.3d 496 (Del. Ch. 2013); In re Synthes, Inc. S’holder Litig., 50 A.3d 1022 (Del Ch. 2012); Martin Marietta Materials, Inc. v. Vulcan Materials Co., 56 A.3d 1072 (Del. Ch. 2012); In re El Paso Corp. S’holder Litig., 41 A.3d 432 (Del. Ch. 2012); In re Southern Peru Copper Corp. S’holder Litig., 52 A.3d 761 (Del. Ch. 2011); In re Dollar Thrifty S’holder Litig., 14 A.3d 573 (Del. Ch. 2010); Yucaipa American Alliance Fund II, L.P. v. Riggio, 1 A.3d 310 (Del. Ch. 2010); In Re American Intern. Group, Inc., Del. Ch., 965 A.2d 763 (2009); Alliance Data v. Blackstone Capital, 963 A.2d 746 (Del. Ch. 2009); In re American Int’l Group, Inc. Derivative Litig., 976 A.2d 872 (Del. Ch. 2009); In re Netsmart Technologies, Inc. S’holder Litig., 924 A.2d 171 (Del. Ch. 2007); Desimone v. Barrows, 924 A.2d 908 (Del. Ch. 2007); In re Lear Corp. S’holder Litig., 926 A.2d 94 (Del. Ch. 2007); In re Topps Co. S’holder Litig., 924 A.2d 951 (Del. Ch. 2007); Trenwick America Litig. Trust v. Ernst & Young, L.L.P., 906 A.2d 168 (Del. Ch. 2006); In re Cox Communications Inc., 879 A.2d 604 (Del. Ch. 2005); In re Toys “R” Us, Inc. S’holder Litig., 877 A.2d 975 (Del. Ch. 2005); Hollinger Int’l, Inc. v. Black, 844 A.2d 1022 (Del. Ch. 2004); Production Resources Group, L.L.C. v. NCT Group, Inc., 863 A.2d 772 (Del. Ch. 2004); In re Pure Resources, Inc., S’holder Litig., 808 A.2d 421 (Del. Ch. 2002); IBP, Inc. v. Tyson Foods Inc., 789 A.2d 14 (Del. Ch. 2001); In re Pennaco Energy, Inc. S’holder Litig., Del. Ch., 787 A.2d 691 (Del. Ch 2001); Chesapeake Corp. v. Shore, 771 A.2d 293 (Del. Ch. 2000); In re Gaylord Container Corp. S’holder Litig., 753 A.2d 462 (Del. Ch. 2000); Ace, Ltd. v. Capital Re Corp., 747 A.2d 95 (Del. Ch. 1999).

In addition, Chief Justice Strine speaks frequently on the subject of corporation law, at diverse forums such as the New York University Center for Law and Business; the University of Pennsylvania’s Corporate Law Conference; the Tulane Corporate Law Institute; Director’s Colleges at Stanford Law School, Duke University, and the University of Pennsylvania’s Wharton School of Business; and the San Diego Securities Law Institute sponsored by Northwestern University School of Law.  He has also authored many articles on business law topics in publications including The Business Lawyer, University of Chicago Law Review, Cornell Law Review, Delaware Journal of Corporation Law, Duke Law Journal, Harvard Law Review, Northwestern University Law Review, University of Pennsylvania Law Review, University of Southern California Law Review, Stanford Law Review and University of Toronto Law Journal.   On several occasions, Chief Justice Strine’s articles have been selected as among the Best Corporate and Securities Articles of the year, based on the choices of academic teachers.

Chief Justice Strine holds long-standing adjunct teaching positions at the Harvard, University of Pennsylvania, Vanderbilt and UCLA Schools of Law, where he has and continues to teach diverse classes in corporate law addressing, among other topics, mergers and acquisitions, the role of independent directors, valuation, and corporate law theories.  Chief Justice Strine also serves as a Senior Fellow of the Harvard Program on Corporate Governance, as well as the Austin Wakeman Scott Lecturer in Law at the Harvard Law School.  Since 2006 to the present, Chief Justice Strine has served as the special judicial consultant to the ABA’s Committee on Corporate Laws.

Immediately before becoming a member of the Court of Chancery, Chief Justice Strine was Counsel to Governor Thomas R. Carper of the State of Delaware.  In that capacity, Chief Justice Strine was responsible for providing legal counsel to the Governor and in 1994 assumed responsibility for overall policy coordination.  In those capacities, Chief Justice Strine played leading roles in, among other things, developing the legal strategy for litigating the New Castle County desegregation case unitary status motion, crafting the $200 million Delaware v. New York settlement, and drafting the welfare reform plan “A Better Chance.”  He also drafted and spearheaded the Governor’s effort to secure passage of the State’s standards-based educational accountability, charter school and public school choice legislation.

Before becoming Counsel to Governor Carper in January 1993, Chief Justice Strine was a corporate litigator at the firm of Skadden, Arps, Slate, Meagher & Flom.  Prior to that, Chief Justice Strine was law clerk to Judge Walter K. Stapleton of the U.S. Court of Appeals for the Third Circuit and Chief Judge John F. Gerry of the U.S. District Court for the District of New Jersey.  Chief Justice Strine graduated magna cum laude from the University of Pennsylvania Law School in 1988, and was selected as a member of the Order of the Coif.  In 1985, he received his Bachelor’s Degree summa cum laude from the University of Delaware and was selected as a member of Phi Beta Kappa.  While at the University of Delaware, Chief Justice Strine was awarded a Harry S. Truman Scholarship.  He was also named to the Panel of Distinguished Seniors of the College of Arts and Science, and selected as the outstanding graduate in political science.

In December 2000, Governor Carper awarded Chief Justice Strine the Order of the First State.  On October 11, 2002, President David Roselle of the University of Delaware presented Chief Justice Strine with the University’s Presidential Citation for Outstanding Achievement.  From 2005 to the present, Chief Justice Strine has been named as one of the nation’s top lawyers and judges by Law Dragon magazine.  Also, in 2006, he was selected as a Henry Crown Fellow at the Aspen Institute.

Leo E. Strine, Jr., Delaware's Constitutional Mirror Test: Our Moral Obligation to Make the Promise of Equality Real (Sept. 22, 2017).
Categories:
Discrimination & Civil Rights
,
Family Law
Sub-Categories:
Race & Ethnicity
,
Discrimination
,
Poverty Law
,
Education Law
Type: Other
Abstract
This lecture, delivered as the 2017 James R. Soles Lecture on the Constitution and Citizenship at the University of Delaware, addresses whether Delaware has lived up to the constitutional principles of equality. Delaware, although a part of the Union, was a slave state, and after the Civil War, a Jim Crow state. It was slow to embrace the ruling in Brown v. Board of Education, although Delaware Chancellor Collins J. Seitz had ruled for the black plaintiffs in Belton v. Delaware and ordered their admission to the formerly all-white schools. Ultimately, a metropolitan desegregation remedy was put in place by the federal courts in the late 1970s, after state officials dragged their feet and failed to implement an effective plan for desegregation. The Court’s remedy effectively desegregated the New Castle County schools and prevented the creation of schools with high concentrations of poverty. In the 1990s, the State sought and obtained freedom from court supervision, arguing that it had gone beyond the court’s mandate in desegregating schools and could be trusted to ensure the rights of all children. Now, it is 2017. What has happened? Delaware’s major city, Wilmington, remains divided among four school districts with a majority suburban voting base, created by the State to implement the court-ordered desegregation plan, but these school districts no longer seek to create racial balance in their schools. Wilmington now has elementary schools that are overwhelmingly high-minority and high-poverty. Middle schools of the same kind exist, and persistent economic and educational gaps between white and black children exist. During this period of resegregation, crime has grown in northern New Castle County to the point where Wilmington has a murder rate among the highest in the nation. Drop-out rates and youth crime rates among black kids far exceed those among white kids. Yet, no extra resources have been given to the schools that face the greatest challenges and, in fact, in terms of the most important resource—teachers—the staff in urban schools have less experience than the staff in suburban schools with high income and low minority populations. In this lecture, Chief Justice Strine asks whether Delawareans, having said we could protect the rights of our black children, are prepared to face the constitutional mirror test, and to recognize that kids who have less, need more—especially kids and families who have been victimized by hundreds of years of discrimination. Rather than just identify the problem, Chief Justice Strine outlines a potential reform plan that would reorganize the New Castle County schools so that Wilmington was part of one well-resourced and geographically compact Northern New Castle County school district. This would allow for the selection of a high quality educational leader who could put in place a coherent plan to address the needs of poor children. The Chief Justice also suggests the following: a 220-day school year; a full day, including an early arrival option with breakfast, after-school homework time, nutritious snacks, and activities; and a requirement that students grade seven and up engage in an after-school activity year round. Because this plan is focused on poverty, it addresses racial inequality in a race-neutral way—nearly 60% of black families in Delaware are at or below 200% of the federal poverty level, as compared to 26% of white families. The plan also addresses the needs of all twenty-first century families as the extended school year would reduce the need for expensive summer camps and tutors; the extended school day and added extracurricular activities would reduce before and after-care costs for working parents; and the addition of nutritious meals during the school day would reduce the burden on impoverished families. Further, the plan can be scaled up and implemented across the state, cutting redundancies and inefficient overhead costs throughout Delaware school districts and providing a coherent district-wide approach to classroom instruction. In terms of how it can be financed, Chief Justice Strine points out that Delawareans pay far lower tax rates than they did when the state was more prosperous. He notes that failing to invest in education will continue to cost Delawareans in terms of crime, lost jobs, and hopelessness, finally asking, “[H]ow can we afford not to if we really care about our constitutional commitment to equality?”
Leo E. Strine, Jr., Corporate Power is Corporate Purpose I: Evidence from My Hometown, 33 Oxford Rev. Econ. Pol’y 176 (2017).
Categories:
Corporate Law & Securities
Sub-Categories:
Fiduciaries
,
Shareholders
,
Securities Law & Regulation
,
Corporate Law
,
Corporate Governance
Type: Article
Abstract
This paper considers a rather tired argument in corporate governance circles, that corporate laws only giving rights to stockholders somehow implicitly empower directors to regard other constituencies as equal ends in governance. By continuing to suggest that corporate boards themselves are empowered to treat the best interests of other corporate constituencies as ends in themselves, no less important than stockholders, scholars and commentators obscure the need for legal protections for other constituencies. As a case study, this paper examines what happened when an activist investor came to DuPont, illustrating how its board knew that they were expected to make their end investors’ best interests, even if that hurt other constituencies. This isn’t a story about bad people, but a reminder to those genuinely concerned for non-shareholder constituencies to face reality and support changes in the power dynamics affecting corporate governance that make regard for non-shareholder constituencies an obligation for business.
Leo E. Strine, Jr., Fiduciary Principles and Delaware Corporation Law: Searching for the Optimal Balance by Understanding that the World is Not, in Oxford Handbook of Fiduciary Law (forthcoming 2017).
Categories:
Banking & Finance
,
Corporate Law & Securities
Sub-Categories:
Fiduciary Law
,
Corporate Law
,
Shareholders
Type: Other
Abstract
This Chapter, forthcoming in the Oxford Handbook of Fiduciary Law, examines the principles that animate Delaware’s regulation of corporate fiduciaries. Distilled to their core, these principles are to: give fiduciaries the authority to be creative, take chances, and make mistakes so long as their interests are aligned with those who elect them; but, when there is a suspicion that there might be a conflict of interest, use a variety of accountability tools that draw on our traditions of republican democracy and equity to ensure that the stockholder electorate is protected from unfair exploitation. After reviewing the evolution and institutional setting of the pertinent Delaware case law, the Chapter details how these principles have emerged in several high-salience contexts (the business judgment rule, controller freeze-outs, takeovers, and stockholder elections), and demonstrates that the identified principles aim to preserve the benefits of profit-increasing activities in a complex business world where purity is by necessity impossible. Further, the Chapter demonstrates that, even when a stricter approach to fiduciary regulation is warranted because of the potential for abuse, these principles hew to our nation’s republican origins and commitment to freedom in another way: when possible to do so, regulation of fiduciary behavior that might involve a conflict of interest should involve not after-the-fact governmental review, but before-the-fact oversight by the fiduciaries of the corporation who are impartial and, most importantly, by the disinterested stockholders themselves.
Leo E. Strine, Jr., Who Bleeds When the Wolves Bite? A Flesh-and-Blood Perspective on Hedge Fund Activism and Our Strange Corporate Governance System, 126 Yale L.J. 1870 (2017).
Categories:
Corporate Law & Securities
Sub-Categories:
Corporate Governance
,
Business Organizations
,
Corporate Law
,
Securities Law & Regulation
,
Shareholders
Type: Article
Abstract
This paper examines the effects of hedge fund activism and so-called wolf pack activity on the ordinary human beings — the human investors — who fund our capital markets but who, as indirect of owners of corporate equity, have only limited direct power to ensure that the capital they contribute is deployed to serve their welfare and in turn the broader social good. Most human investors in fact depend much more on their labor than on their equity for their wealth and therefore care deeply about whether our corporate governance system creates incentives for corporations to create and sustain jobs for them. And because human investors are, for the most part, saving for college and retirement, they do not gain from stock price bubbles or unsustainable risk taking. They only gain if the companies in which their capital is invested create durable value through the sale of useful products and services. But these human investors do not typically control the capital that is deployed on their behalf through investments in public companies. Instead, intermediaries such as actively traded mutual funds with much shorter-term perspectives and holding periods control the voting and buy and sell decisions. These are the intermediaries who referee the interplay between activist hedge funds and corporate managers, an interplay that involves a clash of various agents, each class of which has a shorter-term perspective than the human investors whose interests are ultimately in the balance. Because of this, ordinary Americans are exposed to a corporate republic increasingly built on the law of unintended consequences, where they depend on a debate among short-term interests to provide the optimal long-term growth they need. This paper humanizes our corporate governance lens and emphasizes the living, breathing investors who ultimately fuel our capital markets, the ways in which they are allowed to participate in the system, and the effect these realities have on what corporate governance system would be best for them. After describing human investors’ attributes in detail — their dependence on wages and locked-in, long-term investment needs — this paper examines what people mean when they refer to “activist hedge funds” or “wolfpacks” and considers what risks these phenomena may pose to human investors. Finally, this paper proposes a series of reforms aimed not at clipping the wings of activist hedge funds, but at reorienting our corporate governance republic to truly serve the needs of those whose money it puts to work — human investors.

Education History

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Langdell Library 327

617-998-1554

Assistant: Kathy Goldstein / 617-496-4183