A Quiet Judge for a Noisy Dispute
..........4/14/02 ..... By RITA KATZ FARRELL
WILMINGTON, Del. -- The fate of the biggest computer merger deal in history — Hewlett-Packard's $24 billion purchase of Compaq Computer — may rest with a self-effacing judge who married his high-school sweetheart, lives near his mother in the rural Delaware town where he grew up and once fined himself $500 for missing a telephone conference call with lawyers.
At a three-day trial scheduled to begin April 23 in the Court of Chancery in Wilmington, Chancellor William B. Chandler III, 51, will decide whether Walter B. Hewlett, son of a Hewlett-Packard co-founder, has proof that the company illegally manipulated a March 19 shareholder vote in favor of the merger, which Mr. Hewlett has bitterly opposed.
Mr. Hewlett's lawsuit was filed here because Hewlett-Packard, like many companies, is incorporated in Delaware, which has a low corporate tax rate and laws more favorable to business than those in other states.
If the judge decides that a new vote is warranted, Mr. Hewlett will succeed in delaying the merger and possibly derailing it. While the company could appeal to the Supreme Court of Delaware, the rulings of Judge Chandler have seldom been overturned.
He declined to be interviewed, but the fact that he rejected Hewlett-Packard's motion to dismiss the case, after an extraordinary Sunday hearing last week, shows that he believes Mr. Hewlett's position may have validity.
Mr. Hewlett has said Deutsche Bank, which had cast 25 million votes against the merger, switched up to 17 million votes in favor of the deal after Hewlett-Packard threatened to deny future business to the bank. It is unclear whether Deutsche Bank's switch tipped the outcome of the vote, which Hewlett-Packard says it has won by a slim margin. But if Mr. Hewlett could prove his accusation, the judge wrote, it would be "an improper use of corporate assets by a board to interfere with the shareholder franchise."
Mr. Hewlett's invocation of his family's heritage in seeking to block the merger may have also struck a chord in Judge Chandler, a devoted family man. During the hearing, the judge said that deciding the complexities of the case wasn't nearly as formidable as how he would explain to his own mother in their hometown of Dagsboro in southern Delaware why he was working on Sunday instead of attending church.
He was smiling but not joking. Friends say he avoids raking leaves on Sunday to avoid offending her.
Admiration for his gentlemanly demeanor is widely shared among lawyers here, even those who have lost cases before him.
In 1990, recalled one such lawyer, he and several colleagues were scheduled to have a telephone conference with the judge, who was unreachable. Later, the lawyer recalled, the judge telephoned to apologize and said he would fine himself for missing a court date, just as he had done to no-show lawyers in his own courtroom.
"He told us, `There's no procedure for this, but with your permission I propose donating $500 to a charity,' " the lawyer said. "All the lawyers grouped around the telephone looked at each other, and we were absolutely thunderstruck."
The judge, who received his law degree at the University of South Carolina and a master's in law at Yale, has a reputation for frugality that dates to when he was a law professor at the University of Alabama. A colleague, Charles O'Kelley, let him house-sit in the summer of 1979. "The month we were gone was one of the worst heat waves ever, but Bill never turned the air conditioning on, not for one day," said Mr. O'Kelley, now a law professor at the University of Georgia.
Judge Chandler's career path was partly shaped by Delaware Supreme Court Justice Randy J. Holland, who as a former partner at the Delaware law firm of Morris, Nichols, Arsht & Tunnell recruited him in 1983. A few years later, Justice Holland recalled, when they were still both lawyers at the firm, he encouraged him to consider becoming a judge.
"He's sincerely interested in people and very sensitive to the context in which the law applied to specific individuals," Justice Holland said.
Recent cases in Judge Chandler's courtroom have included the fight between Merck and what was then called SmithKline Beecham over the rights to a chicken pox vaccine (he ruled in favor of Merck) and one over whether the World Wrestling Federation could move from USA Cable Networks to Viacom. Judge Chandler said yes. He was affirmed on appeal in both cases.
Justice Holland said, "Bill knows he's making decisions that will have a profound effect throughout the United States and, in some cases, throughout the world. But every day he goes home and sleeps in Dagsboro," a quiet town of 437 people about 100 miles south of Wilmington.
Judge Chandler's 12-year term as chief judge of the Chancery Court, where business litigation is heard, expires in 2009. He is paid $142,400 a year and works a 60- to 70-hour week that often requires a five-hour round-trip commute between Wilmington and Dagsboro, where he lives with his wife, Gayle; son, William IV, 17; and daughter, Melody, 15.
He was assigned the Hewlett-Packard case by chance. Three of the four judges who report to him were out of town when it was filed. The fourth, Leo E. Strine, had only recently waded through a big corporate case, IBP's successful battle to compel Tyson Foods to buy it.
James Soles, a former professor at the University of Delaware, said law was not Judge Chandler's original career choice at the school; he first majored in engineering. When he switched to pre-law, his mother and late father, a staunch Republican who owned poultry farms and had been a state secretary of agriculture, drove to campus to personally demand an explanation from Mr. Soles, their son's adviser.
"I told them he had a 3.97 grade-point average, was equipped to be a lawyer because he was quick to argue, quick to debate — an important quality for a lawyer," Mr. Soles said. "Plus, he had rural Sussex County common sense." |
