Delaware Recusal Bids Look More Like Odd Blip Than New Normal

Rumors of a judicial recusal crisis in Delaware’s Chancery Court appear to have been greatly exaggerated.

After Elon Musk wielded bias allegations to get his final Delaware cases reassigned, it was only natural the aggressive maneuver by the state’s most notorious litigant would spark concerns about judge shopping. Those fears were amplified when shareholder attorneys moved weeks later to disqualify a different judge from cases involving Apollo Global Management Inc. and KKR & Co.

The judge on the receiving end addressed those worries directly, reminding the lawyers of their obligation not to weaponize the process for a perceived edge. “I am hopeful that this motion is an outlier,” she wrote. High-profile litigators, meanwhile, have been publicly debating whether a series of two constitutes a “trend” and whether the Musk case should count.

Both recusal bids connected the judge’s past in private practice to an April ethics opinion from the American Bar Association discussing the duty of lawyers to raise conflicts of interest “reasonably likely” to result in recusal. The vague framing and the tightly knit nature of Delaware’s corporate ecosystem, where a handful of firms steer most major transactions, pointed to a potential flood of copycats.

“There’s all kind of gamesmanship that becomes possible under the language in this opinion, which does raise a concern that lawyers could use it tactically,” said St. Thomas University law professor Keith Fisher. “If it’s unethical to fail to bring up some remote fact that might in some distant universe cause the judge to recuse—that could lead to mischief down the road. Or right now.”

The trend, however, is starting to look self-contained. A Bloomberg Law docket analysis suggests the Apollo and KKR disputes may represent the whole iceberg, or at least the bulk of it.

Those requests concern Vice Chancellor Bonnie W. David‘s career at Skadden, Arps, Slate, Meagher & Flom LLP, which did M&A work related to the two private equity restructurings. But the relatively brief filing window for most corporate cases, combined with the long service of Delaware’s judicial roster, means it took unusual circumstances for the issue to come up even twice.

Skadden Ties

Judges aren’t generally conflicted out of cases involving their former firm as litigation counsel unless they were there for the matter in question, according to Indiana University law professor Charles Geyh, who said recusal standards balance “the need for impartiality against the need for a steady supply of judges.” He also pointed to another ethics rule stating judges who aren’t actually disqualified have a “duty to sit.”

The upshot is that of the court’s seven judges, only David is a plausible candidate for recusal based on her law firm past, and only in increasingly marginal situations. David, who became a magistrate in 2023, received a large transfer of ongoing cases upon elevation to vice chancellor two years later, some of which predated her judicial service.

The universe of disputes capable of featuring a recusal replay is likely limited to those older cases. Barring some strange exception, any other deal negotiated during David’s time at Skadden is too stale to litigate.

Bloomberg Law’s analysis uncovered just 16 other matters assigned to her—excluding closed cases—that feature the word “Skadden” in the filings. All but two references consist of passing mentions in tangential documents such as supplemental exhibits.

Of the other two lawsuits, one concerns a restructuring at GoDaddy Inc. that resembles the Apollo and KKR transactions, while the other challenges the sale of a smart-appliance business. It’s unclear if the deals involved Skadden while David was there. Recusal hasn’t come up in either case.

‘Pissed Off Judge’

The judge herself expressed skepticism about the latest recusal bid May 18. “I studied the nearly 200 cases on my docket and found no similar issues,” she wrote, giving the shareholder attorneys until Friday to disclose if they’ve learned of other potential Skadden-related conflicts.

David’s response to the disqualification motions underscores the traditional check on abuse of the recusal process—the peril of poking the bear and coming away with little more than “a pissed off judge,” according to Geyh. Despite the new ABA guidance, that dynamic will probably hold, especially for repeat players in a closed system like Delaware’s, he said.

“This opinion gives you a little bit of cover, but a judge is still going to look at it askance if it seems like a strategic motion that has nothing to do with bias and everything to do with trying to purge her from the case,” Geyh said.

Dmitry Bam, a University of Maine law professor, echoed that sentiment. He referred to the old adage—found in Machiavelli, Ralph Waldo Emerson, and the HBO crime saga “The Wire"—that if you aim for the king, you’d better not miss.

Self-Created Circus

The Musk case, meanwhile—like so many controversies surrounding him—also makes for poor precedent.

It reflected idiosyncrasies unique to the world’s richest person, whose fans are still attacking Chancellor Kathaleen St. J. McCormick, the judge responsible for voiding his record $56 billion pay plan, even after he moved Tesla Inc. to Texas, got his money back on appeal, and succeeded in shoving her aside.

“Every client that gets an adverse ruling thinks the judge is biased,” said Richard Flamm, author of several ethics treatises. “But the Supreme Court has said judicial rulings are not a basis for disqualification, even if they’re erroneous and numerous. A judge can be wrong without being biased.”

McCormick expressly declined to recuse herself when handing Musk’s final Delaware cases off to David. She rejected the billionaire’s bias claims, denied endorsing a LinkedIn post taunting him, and pointed instead to the problems caused by excessive media attention.

The danger there is that by capitulating to Musk’s campaign against her, the judge may have given the next troublemaker an incentive to engineer another disruptive controversy, according to Bam.

“You don’t want to reward a self-created media circus,” he said.