In United Rentals, Inc. v. RAM Holdings, Inc., (Del. Ch., Dec. 13, 2007), read opinion here, the Delaware Chancery Court rejected a proposed opinion by a law professor on a legal issue. The Court reminded everyone that giving opinions on Delaware legal issues was the proper province of the court–not proposed experts hired by the parties. Professor Stephen Bainbridge has the case covered already, so I refer you to his thoughtful post here.
The good professor provides excerpts from the opinion, including the following:
After thoroughly reviewing Professor Coates’s report and both parties’ briefs, I find that the portion of the report that describes buyout deal structures is admissible as factual testimony and that the remainder of the report that purports to explain drafting practices is inadmissible as impermissible legal opinion.
. . . . It is therefore obvious that defendants’ expert intends to instruct this Court on how such “succinct but legal terms of art” should be interpreted.7 This Court, however, has made it unmistakably clear that it is improper for witnesses to opine on legal issues governed by Delaware law.8 It is within the exclusive province of this Court to determine such issues of domestic law.9 I, in interpreting the disputed contractual provisions at issue in this case, need not—indeed, may not—look beyond the well-established precedent of the Delaware courts, with which I am intimately familiar. The report, by opining on Delaware law and the application thereof under the guise of informing the Court of drafting “customs and trends,” impermissibly encroaches on the province of this Court.”10
7 Remarkably, in his report, Professor Coates appears to excuse practices that can only be described as inartful drafting as “one of the ways that the parties [to buyout negotiations] commonly economize on time and costs.” Id. Professor Coates states that the parties, in contravention of basic principles of contract interpretation and drafting, use certain phrases (e.g., “subject to” or “notwithstanding”) so as to “avoid the need to attempt to synthesize every provision of every related agreement that is or may be partly or wholly in conflict with the provision in question.” Id. Not surprisingly, disputes often arise precisely because of provisions that are “partly or wholly in conflict” with each other.
8 See, e.g., In re Walt Disney Co. Derivative Litig., No. 15452-NC, 2004 WL 550750, at *1 (Del. Ch. Mar. 9, 2004) (“In this Court, witnesses do not opine on Delaware corporate law.”).
9 See, e.g., id. (citing Itek Corp. v. Chicago Aerial Indus., Inc., 274 A.2d 141, 143 (Del. 1971); N. Am. Philips Corp. v. Aetna Cas. and Sur. Co., No. 88C-JA-155, 1995 WL 628447, at *3 (Del. Super. Apr. 22, 1995); State v. Hodges, Nos. CR 95-12-0405, CR 95-12-0406, 1996 WL 33655975, at *2 (Del. Super. Sept. 10, 1996)).
10 The report attempts to instruct this Court on interpretation of the agreement, which is the ultimate issue of law in this case. As this Court has concluded previously, the “proposed testimony [is] inadmissible not merely because it embraces an ultimate issue, but also because it embraces domestic law.” In re Walt Disney Co. Derivative Litig., 2004 WL 550750, at *1 (relying on Rule 704 and Itek, 274 A.2d 141) (emphasis in original).
UPDATE: Here is a post on Lee Thomason’s blog about a very recent decision from the U.S. District Court for the District of Delaware that came to a similar conclusion.