The Administrative State(s): Delaware's New Administrative Certification Procedure
Daniel R. Kahan
Georgetown University Law Center; Morrison & Foerster, LLP
July 8, 2009
Journal of Business & Securities Law, Vol. 10, No. 1, 2009
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.
Number of Pages in PDF File: 23
Keywords: SEC certification, administrative certification, federalism, corporate governance, 14a-8, abstention
JEL Classification: K22, K23, K40
Date posted: July 9, 2009 ; Last revised: September 10, 2010