Delaware Supreme Court Chief Justice Myron Steele
The big guessing game these days in Wilmington is where esteemed Justice Myron T. Steele of the Delaware Supreme Court might land…
JC: On the eve of your retirement from an illustrious judicial career, walk me down memory lane on the events that shaped your outlook as a chief justice.
MS: My experiences in the profession are indeed memorable, but whether they shaped my outlook as a chief justice is, in a sense, arguable. I was recruited out of law school by a Wilmington, Del., law firm, which led to my being loaned by the law firm to the attorney general’s office of the state of Delaware. In the early 1970s, for young lawyers who wanted to be litigators, this working sabbatical gave them an opportunity to try jury trials, albeit in criminal cases, and do some civil work in the attorney general’s office and then return to the law firm. It is a lost cultural tradition, unfortunately, because it gave me “on your feet every day in the courtroom” litigation experience and whetted my appetite to perhaps one day go on and become a judge.
Your early law firm work included criminal cases, as well as hospital healthcare and insurance. How did you keep from becoming a complete cynic?
Now, only a cynic can ask that question! No, you do see some aspects of people that disappoint you, but there is also very much a good side. It’s hard to explain the joys of doing jury trial work—it is really a pleasure to work with juries and other lawyers in the courts.
The Delaware court system is often described as close knit, so you must have met some of your current colleagues on the way up.
I served on the superior court with several future justices. At chancery, I served with Chancellor Bill Allen for four years, and then, after he retired, I was there with Bill Chandler. Also serving on chancery were Justice Carolyn Berger and Justice Jack B. Jacobs, so I got to know them even better than I already had—in the small world that is Delaware, Justice Berger and I were in the same law firm for a while, and Justice Jacobs and I had known each other through Democratic politics. I moved on to the Delaware Supreme Court in 2000 and served there as a justice for four years before becoming the chief justice in 2004. All of that varied experience obviously colored my ability to serve as chief justice, having been on the two major trial courts, having litigated in front of them, and I had my fair share of appellate work along the way.
Still, there must have been surprises.
Certainly I have to be candid: I wasn’t necessarily completely prepared for the administrative and the political (with a small “p”) aspects of this job, although I certainly had the background in the subject matter that came before the court.
What was your motivation to leave a legal career?
You see days when the system is working and when it is not. And if you are representing people on a day when you think it’s not working well, then you are overwhelmed with the urge to want to change it—to do your best to try to make sure it works well all the time. And it’s hard to do that from the outside. So you have to roll up your sleeves and give up some of your other opportunities and get on the inside and try to work to improve the system that you love.
It seems like “fairness” played a role?
There’s no question. Absolutely. Everyone in this system that I have observed now over 43 years works very hard to do the right thing for the right reason, but also is keenly aware that human frailties and foibles will prevent absolute perfection.
Tell us about this invention of yours—the thaumascope.
It was a coinage from an article I wrote with Sean Griffin in which we referred to a Victorian toy known as a “thaumascope,” which can create an illusion of two images acting as one. The point being that one of the basic principles that caused the court of equity to be separate originally under English law, which we adopted in Delaware, is that you have to be flexible enough to realize that in certain fact situations, that an even-handed application of the law doesn’t mean a literal application of the law. And having our corporate governance in a court with equity powers gives us the opportunity, even with Delaware Supreme Court oversight, to flesh out individual scenarios and struggle to get—and work to get—the right result for the right reasons, without being boxed in because of a statute’s literal language.
Is the circumvention of the state courts by the federal agencies an unhealthy phenomenon?
There is no question. It seems to me that politics drives the federal approach. It seems to me that there is an assumption that if Congress says it is so or delegates the power to an agency that says it’s so, and then it must be right. That is not the way we apply the law in Delaware. We apply it here contextually, yes, because no factual situation is the same. We have general principles that apply, and we believe strongly that we should adhere to those principles, but we believe that every case is different and the law has to be flexible enough to be accommodative while at the same time providing a level of predictability, consistency, and clarity that is so important.
Which really underscores the way companies are dealing with the feds these days—pay the penalties and get out of the line of fire.
Politics does not belong in the courts. In Delaware, we are not ideologues. We have apolitical appointments to the bench; all courts of significance have to be balanced with no more than a majority of one political party. We’ve taken politics out of the legal system, and it has been that way since our last constitution. By not being ideological and by being more clinical, we think we have the right balance.
Is the relationship of supreme to chancery, in effect, that you are the court of appeals?
Yes, that’s correct.
And does that mean that, because your comments could be easily echoed by your peers in chancery, your role is different?
Yes, it is, because we defer to their findings of fact as long as there is anything in the record that supports it. We don’t second-guess their judgment. That is very important because our review of their work is highly selective. It is based either on abuse of discretion or mishandling of the application of the law. But it doesn’t amount to hindsight second-guessing. Plus we have huge respect for the people on the Delaware Court of Chancery. Three members of our court served on the court of chancery, so we understand their role and what they do and why they do it. So while it is an appellate review, it is not hindsight second-guessing.
Would you comment on what you perceive to be the tensions in the world of corporate governance today?
Well, the tensions remain between getting the correct balance between board authority or director authority and shareholder empowerment. I think there have been some legislated changes—not as many as some wanted, and I’m not sure there has been empirical evidence to support those legislative changes on the merits. I think the jury is still out, so to speak, on whether those changes improve corporate governance or not. I think the trends in corporate governance are that everyone is interested in improving corporate governance but everyone’s way isn’t the same. I try not to second-guess other people, but I try to say that normative views about what constitutes corporate governance are not helpful. They are typically politically driven by constituencies that want to force their views on others.
What do you propose?
The best review is to look factually at what does improve performance, because when you improve long-term wealth enhancement you improve the situation not only for the individual company but also for the economy as a whole. So what we try to do in shaping corporate governance in Delaware is to assure that there is a climate for reasoned change, not just a snap judgment on what constitutes reform on the theory that reform is a magic bullet. We don’t know that change improves corporate governance until it has been tested.
What’s the practical impact of that approach on the boardroom?
We have an enabling statute that allows our governing bodies—whether they are boards of directors of corporations or committees, whatever—to experiment and to try different ways of improving governance, and we sanction private ordering when they get it wrong to have pinpointed fixes instead of having an across-the-board, check-the-box mentality of prescriptive fixes like Congress entertains. We allow them to fix it where it’s wrong. Instead of bringing every Chevrolet around the country into the shop because one Chevrolet has a problem, we send the one Chevrolet to the garage and it gets fixed. And it gets fixed in a way that improves its performance after the mechanic has worked on it. This is an example that fundamentally explains Delaware’s philosophy.
What are your thoughts on the supersized penalties being brought by the government that actually come out of the shareholders’ balance sheet?
Well, in shaping the remedy in equity, every wrong must have a remedy. The question is how do you shape the remedy in such a way that it cures the wrong and does no harm to anyone directly. I have a problem if the remedy that is shaped for a wrong is one that doesn’t punish the wrongdoer but punishes the bystander.
Would you talk about the value of collegiality in the boardroom—a term that has been used pejoratively by activists—and how that compares to collegiality among you and your colleagues on the bench?
Sure, there is a very distinct difference in my mind between collegiality and going along to get along. On my court, I have four brilliant people with whom I am privileged to work. They all have their own view and they are all encouraged to discuss their view. No one tries to change their minds other than by persuasion or a different view of the facts or a different explanation of how the law would operate when applied to those facts. And we have robust discussions. But they are always in a respectful way. Being collegial doesn’t mean everybody gets together just for the sake of agreeing and presenting a common front. Collegiality means that you have people that genuinely want to work together, take the time to explain their position and understand another’s position, yield when they think that the other side may have the better argument, but do not yield when their conscience won’t allow them. That’s collegiality on the Delaware Supreme Court.
Did you accomplish what you set out to do in your judicial career?
I have accomplished much but by no means all of what I wanted to accomplish. There have been shortcomings, whether they have been my fault or just obstacles that have been impossible to overcome. I don’t know, but no, I didn’t accomplish everything I wanted to, and there has also been a certain amount of crisis management, particularly in the last four years, with funding issues and building capital structure to improve the court system. Some of it has gotten done; some of it has not.
Any words of wisdom for your successor?
Be prepared for crisis management, because no matter what your strategic plan may be, crises will develop and you will have to deal with them. Be flexible. Respect the people who work in this system because they work very hard for very little recognition but are actually the ones that get the job done every day. And be patient. Your vision won’t be accomplished as quickly or as fulsomely as you hope.