Top Judge

Chancellor William Chandler III was one of the first students to graduate from Indian River High School (1979) — and he’s given his old alma mater a good report.
Coastal Point • SAM HARVEY: Chancellor William Chandler III.Coastal Point • SAM HARVEY:
Chancellor William Chandler III.

Chandler has set a high bar for fellow Indian River students, as he remains the only graduate to have risen to judgeship.

However, in another sense, he is living proof that sleepy Sussex County can produce success stories just like any other place in the country.

Chandler has served as Chancellor to the Delaware Court of Chancery since 1997.

It’s been a long and winding road to the top spot in the Court of Chancery, and Chandler didn’t gather much moss along the way.

He started out (1976) as a clerk at the U.S. District Court (in Wilmington), then worked (1979) as a law professor (University of Alabama), then served (1981) as legal counsel to Gov. Pete DuPont, then worked (1983) as an attorney.

In 1985, then-Gov. Mike Castle appointed Chandler to the Delaware Superior Court, in Georgetown.

“I was not at that stage, very old,” Chandler pointed out. “I was only 34 years old in 1985, and did not at all think that I wanted to be a judge.”

He’d only been a practicing attorney for two years at that point, and said he was enjoying that work.

“I did everything that came in the door,” he said. “Wills, real estate matters, felony and misdemeanor criminal cases — you never knew what assignment you might be given to handle that particular day.

He said he spent much of his time arguing cases in the Court of Chancery — commercial and contractual disputes. Having just come from Gov. DuPont’s legal staff, he also worked with one of the firm’s Wilmington lawyers on Delaware River and Bay Authority legislation.

However, according to Chandler, “You had to be able to adjust your whole schedule for the day to handle some emergency matter that might come up — and you had to be adroit enough to handle an area of the law that perhaps you didn’t have much experience with.

“It was nerve-wracking — but that’s what made it such an interesting and challenging opportunity,” he said. “I got to know a little bit about all different areas in law.

“There were a lot of anxious moments, but it was challenging and interesting — something new all the time,” he recalled.

Chandler said he hadn’t come from a white-collar family — neither his mother nor father had gone to college.

His father worked in agricultural trucking (started in the 1930s by Joe Kollock, Sr., the company is still around today).

“So, dad worked in that business, but he was an extremely extroverted and gregarious person who could talk to anyone about any subject,” Chandler said. “He was without a doubt the most intelligent person I’ve ever known, and I’ve been places (like Yale Law School) that have plenty of intelligent people. No one could come close to him.”

Chandler said his father made a good living, but he never had any interest in following in like stead.

Both his parents, and grandparents, had grown up in Dagsboro, and he remembered thinking, “‘Boy, let me get out of Dagsboro, let me get out of this one-horse town — I’ll never come back. I’m going some place, any place, but not old Dagsboro. I’ll never be caught dead here.’

“Guess where I am,” he smiled. “Right back in the house I was raised in, no less.”

He first became interested in law school after his cousin, Bill Kollock, started talking about it.

“I would talk to him about it, and became interested in it,” Chandler said. Kollock ended up changing his mind, and went on to become a professor of English, but the thought stuck for Chandler.

Then, he had another spark during his senior year at Indian River.

A young Tempe Steen (now well known as a town solicitor in these parts) had just begun her career as a high school civics teacher.

“‘Problems of Democracy,’ is what they called it, and that planted the seed in my mind, about going to law school and becoming a lawyer,” he said. “At that time, the big issue was the Vietnam War, and there were issues about welfare, and we would debate these things and argue incessantly.

“One day, she said to me, ‘Bill, you should think about going to law school, because all you want to do is argue all the time. At least that way, you’d be paid for doing it.’

“The irony is, Tempe kept teaching and eventually, she went back and got a law degree and now practices law,” he said. “The first time I had her in front of me, it was a bit awkward — to have Tempe Steen appearing in front of me, arguing a case.

“I think we were both uncomfortable, but it was also a delight, because she’s not only a wonderful person, but she’s an extraordinarily talented lawyer as well,” Chandler noted.

His father encouraged him, and helped pay for his education, first at the University of Delaware (UD) and then at the University of South Carolina.

Chandler also recognized UD professor James R. Soles for encouraging him to pursue the law. His political science teacher and advisor, Chandler referred to him as a kind of father figure — and credited his possible influence behind his eventual rise to Chancellor.

Meantime, Chandler had teamed up with his wife-to-be, Gail.

She was a Lord Baltimore student, and they first met when the school merged with then-John M. Clayton in 1968.

“It was love at first sight, on behalf of my wife, and it was only a matter of time before I fell as well,” Chandler laughed. “She chased me, and caught me.”

They attended the UD together, and then went their separate ways — he to law school, she to library school.

“That long-distance arrangement didn’t last,” Chandler said. “I think it was about a week before I called her and said, ‘I’m miserable,’ and she was miserable, so one week after law school started, she flew to South Carolina and we were married.

“She went to library school while I went to law school, and we’ve been married ever since,” he said.

That was 1973, and he graduated with a Doctor of Jurisprudence (J.D.) degree in 1976.

Chandler returned to Delaware, working as a law clerk under the late Judge James Latchum (U.S. District Court).

“He was a great man,” Chandler said. “He taught me the basic practical skills of judging, and he was also an extremely bright judge — he was a great role model.”

However, he said he still wasn’t sure what he wanted to do at that point in life. Chandler returned to school (Yale), and completed his Master of Laws (LLM) in 1979.

He taught the philosophy of law, and commercial law, until 1981. At that point, he said both he and his wife were getting a little homesick for their home state.

They returned to Delaware, and Chandler joined DuPont’s legal staff — another great role model, he said.

“He gave me an opportunity to better understand the legislative part of the process, and the making of law as well as the interpreting of law,” Chandler said. “So, I spent two years as the governor’s legal counsel, and then concluded it was time for me to actually do what I had been trained to do — be a lawyer, and practice law.”

However, when the Delaware Superior Court position opened up in 1985, Chandler’s career as an attorney drifted away into history.

“I had friends, lawyers, who knew me and called me to say, ‘you should apply for that,’” Chandler recalled. “I said ‘No, I’m too young, and I haven’t really had enough time practicing law yet. I’d rather wait — I think I be interested in about 10 years.’

“And I can remember several of them saying, ‘Well Bill, that’s nice, but there may not be a position open in 10 years,” he continued.

“It’s that old story — when the brass ring comes along, you have to reach up and take it, because it may never come along again — and they began to preach that to me pretty steadily for about two weeks,” he said.

“Finally, I sat down with my wife, and we talked about it, and she agreed with my friends — that I would be happier in the long run, that, to her mind, becoming a judge was what I was ultimately destined to do,” Chandler said. “So — I applied, and Gov. (Mike) Castle appointed me.

“In my case — he ended up appointing me three different times,” Chandler pointed out — first in 1985, then again in 1986, to the Resident Judge position (Tease retired), and finally, to the Court of Chancery in 1989, as vice-chancellor.

He said he couldn’t quite account for his rise to judgeship. “The process of appointment to office is a mysterious one, and I’m not sure I know all the background,” Chandler said. “I wasn’t a fly on the wall in (Castle’s) office.”

However, it just so happened that Castle had been DuPont’s lieutenant governor.

“My uninformed speculation is, when he looked at the list of names and saw my name on the list, he thought, ‘I know who that is, and I know the caliber of his work, and I know his character,’” Chandler said. “He knew my father quite well, too — he was very active in the Republican Party.”

The appointment to chancellor, however, was more of a mystery.

“There’s a political balance required in the courts, so the appointment in 1989 had to be a Republican,” Chandler pointed out. “In 1997, Gov. (Tom) Carper was a Democrat, and the appointment as Chancellor could have been either a Republican or a Democrat, because it was tied 2-2.

“Now, I don’t know how Gov. Carper got around to appointing a Republican when he could have appointed a Democrat,” he said. “I only know I had two great friends who were very interested in me becoming Chancellor (Sen. Thurman Adams and Professor Soles), and I have a feeling they made a strong case for me.

“That’s one of the mysteries of political appointments,” Chandler said. “The old saying is, ‘A judge is just a lawyer who knew a governor,’ and maybe that’s what it comes down to — I really don’t know.”

As he was quick to add, Delaware takes great pride in its judicial nominations, and the process is rather involved.

Applicants must first clear a nine-person Judicial Nominating Commission — five lawyers, four laypersons.

Only the top three candidates come back to the governor, and he or she cannot choose someone from elsewhere on the list who didn’t make the top three.

Then, the applicant goes before the state Senate. Following a positive outcome in Senate hearings, and a positive vote, the judge can be confirmed.

So, Chandler made it through that process in 1985, 1986, 1989 and finally became chancellor in 1997.

In 1993, renovations began at the courthouse. Chandler was shuffled around for nearly 12 years, until the new Court of Chancery was completed.

“That was in March 2003, and we moved into this new, magnificent facility,” he said. “It is the nicest (court in the state), in my estimation,” he said. “They have a new courthouse in New Castle County — it’s big, but it doesn’t hold a candle to this facility.”

As a specialist in corporate law and corporate governance issues, Chandler said he’d been given an opportunity to become an expert – “you become very good at something, if you spend almost all your time working and thinking about it,” he pointed out.

In Chancery, acquiring and target companies, directors and shareholders contest merger deals — did the defendants exercise their duties of care and loyalty, or not, is the question?

More recently, in the Walt Disney case, did the directors hire Michael Ovitz at an exorbitant cost, and then pay him another exorbitant amount to quit?

Chandler said there were more than 20 lawyers in court on any given day as that case proceeded. His office is quite large, but he needed to bring in extra chairs to accommodate all the attorneys returning there to confer.

Over 38 days, the case generated 1,200 exhibits and 10,000 pages of transcripts and testimony. The court now awaits the attorneys’ final briefings — another 1,000 pages or so — and then it’s on to closing arguments (in May).

And yet, despite the magnitude of scope, Chandler said the Disney case was rather straightforward, compared to some of the merger deals that come through Chancery.

“We have a lot of big cases,” Chandler said. “In terms of scope and the dimensions of the case, (Walt Disney) was probably one of the largest, if not the largest — but very complex corporate disputes are litigated here quite often.”

Vice-Chancellor Leo Strine recently headed up the PeopleSoft/Oracle merger case and the Lord Conrad Black/Hollinger dispute, Vice-Chancellor Stephen Lamb covered the National Broadcasting Corporation (NBC)/Vivendi merger case.

Chandler handled the Hewlett Packard/Compaq merger, and speculated on action regarding the Verizon/Qwest bidding contest in the near future.

“It looks like the (MCI) directors will accept the lower offer, being made by Verizon, and the shareholders might well make arguments that they should accept (Qwest’s) higher offer,” he noted.

Why do all these big companies come to little Delaware to iron out the legal details?

According to Chandler, it all started back in 1913.

“We owe a great debt of gratitude to a former governor of New Jersey — Woodrow Wilson,” Chandler said. “He was governor of New Jersey in the early 1900s, and decided he wanted to become President of the U.S.

“He believed that to do that, one good campaign trick would be to campaign against corporations and big trust companies, so he came up with an idea to impose a special tax on corporations and trust companies (which were portrayed as villains at that stage in American history),” he explained. “At that time, almost all the corporations in America were incorporated in New Jersey, because its corporate law was viewed very favorably.”

“Delaware had copied, virtually verbatim, New Jersey’s corporation law, but no one really wanted to incorporate in Delaware — until Woodrow Wilson and the Seven Sisters Acts,” he said. “After that, they became very harsh in the way they were treating the corporations.

“So the corporations thought, ‘Hm, we can go right across the river, to this little state called

Delaware, and its laws are just like the ones we’re used to.’ So they all fled New Jersey and came to Delaware,” Chandler concluded.

According to Chandler, more than 60 percent of the Fortune 500 companies, and more than 50 percent of all the companies listed on the New York Stock Exchange, are incorporated in Delaware.

Revenues from corporate franchise taxes amount to more than $600 million a year —roughly one quarter of the entire state budget.

Delaware’s corporate law is very stable and very predictable. There are no juries or punitive damages in the Court of Chancery.

“That enables lawyers to counsel directors as to how the law will treat their merger or their contract, and if the dispute goes to the Court of Chancery, how it will likely be resolved,” Chandler explained. “In addition, the legislature and the Division of Corporations are very sensitive to the needs of corporations.

“If the law needs to be revised or updated, the legislature responds promptly, and the Division of Corporations is a 24 hour/seven day a week operation — you can incorporate any hour of the day or night,” he said.

“That speed is increasingly important to businesses — they often need to incorporate a subsidiary overnight to engage in a transaction where the opportunity needs to be exploited quickly,” Chandler pointed out. “This is the way we have made Delaware very attractive to limited liability companies and partnerships.

“So, that’s the story of Delaware’s dominance in the corporate/charter market, and we are the envy of all the other states in America,” he said.

While Chandler may have set out to become an attorney, he said his career as a judge had been even more gratifying.

“We seek to do justice and find the right answer — the correct, legal answer to a problem — not just any answer you’re being paid to urge,” Chandler explained.

He said his work at Superior Court had been varied (like his legal practice), but the same satisfaction had carried over to the Court of Chancery — “here, even more so,” Chandler said.

“There, the jury often was the modulating force — that is, it was the vehicle through which justice was announced,” he explained. “They found the facts and made the determination, so you were a little removed from it.

“Here, I find the facts, and I apply the law, which means it’s even more personal, “Chandler said. “I find the correct, just and equitable answer, and I get a great deal of satisfaction in doing that — I feel good about my ability to help people.”