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The Administrative State(s): Delaware's New Administrative Certification Procedure

23 Pages Posted: 9 Jul 2009 Last revised: 10 Sep 2010

Daniel R. Kahan

Georgetown University Law Center; Morrison & Foerster, LLP

Date Written: July 8, 2009

Abstract

In 2007, the Delaware General Assembly amended the Delaware Constitution to permit the Delaware Supreme Court to consider legal questions certified to the Court by the Securities and Exchange Commission. Through this new procedure, the Commission can request that the Court, rather than Commission staff, decide novel questions of Delaware law. The certification procedure has received little attention so far. In part, this is because the procedure has been used only once. The relatively quiet reaction to the procedure should not, however, be taken as an indication that the procedure is unimportant. Indeed, this Article’s purpose is to explain why the certification procedure is important - for corporate governance, securities regulation, and federalism generally.

The Article provides an overview of certification procedures traditionally used by the federal courts and explains how Delaware’s procedure is more similar to traditional judicial certification than to the issuance of advisory opinions. The Article then describes the use of certification in corporate governance cases. Finally, the Article presents, and responds to, possible criticisms of the procedure and concludes with some thoughts on the procedure’s potential for carving out a greater role for state oversight in corporate governance.

Keywords: SEC certification, administrative certification, federalism, corporate governance, 14a-8, abstention

JEL Classification: K22, K23, K40

Suggested Citation

Kahan, Daniel R., The Administrative State(s): Delaware's New Administrative Certification Procedure (July 8, 2009). Journal of Business & Securities Law, Vol. 10, No. 1, 2009. Available at SSRN: https://ssrn.com/abstract=1431611

Daniel R. Kahan (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

Morrison & Foerster, LLP ( email )

United States

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