About This Blog
Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
Subscribe to Blog
JDSupra RSS
Join us on LinkedIn
Follow us on TwitterTopics
Top Posts
Top News
- February 19, 2021
- October 30, 2020
- April 1, 2024
Archives
Morris James Blogs
Morris James Leads in Delaware Today “Top Lawyers” Issue with 28 Attorney Recognitions
Morris James LLP is pleased to announce it received 28 recognitions in Delaware Today magazine’s 2017 Delaware Top Lawyers issue. The recognized lawyers were chosen by their peers in a survey to members of the Delaware State Bar Association.
Gretchen S. Knight, Lewis C. Ledyard III, Rich Galperin, Ian D. McCauley and James H. McMackin III, distinguished in bold, received the most votes of any lawyer in their respective categories. Morris James attorneys were rated as “Top Lawyers” in 12 separate practice areas, and Keith Donovan was recognized in multiple categories. More ›
ShareCourt Of Chancery Explains Limitations Period In Equity
Bioveris Corporation v. Meso Scale Diagnostics, C.A. No. 8692-VCMR (Nov. 2, 2017)
Some assume that a statute of limitations will not apply in the Court of Chancery. But as this decision illustrates, that is an oversimplification. The Court of Chancery may well use the same statute of limitations period applicable in an action at law, by analogy, under the equitable doctrine of laches. This is especially true when the claim is a legal one seeking legal relief. This decision also illustrates an important point regarding claim accrual. When a claim arises out of an obligation to make a series of payments over time, it is possible the Court will start to run the laches period from the first non-payment. In other words, subsequent non-payments might not constitute a new claim with a new limitations period or otherwise lengthen the time period to sue.
ShareCourt Of Chancery Issues A Definitive Opinion on Aronson
Lenois v. Lawal, C.A. No. 11963-VCMR (Nov. 7, 2017)
This case illustrates the power of well-functioning special committee to diffuse the potentially corruptive influence of a self-interested controller on a transaction. The result of a well-functioning special committee in this case was that the derivative plaintiff was unable to get around the pre-suit demand on the board requirement. Applying the second prong of the Aronson test for demand futility, the Court interpreted that portion of the test to require the plaintiff sufficiently allege that a majority of the board faces a substantial likelihood of liability for non-exculpated claims. In other words, that a non-exculpated claim may be brought against less than a majority of the board or some other individual at the company, or that the board committed exculpated duty of care violations, will not alone prove demand futility.
SharePartner Patricia A. Winston Appointed to Jurisdiction Improvement Committee Tasked with Improving the Efficient Resolution of Citizens’ Disputes
As a member of the Jurisdictional Improvement Committee, Morris James Partner Patricia A. Winston will serve on a team tasked with taking a comprehensive look at reforming and updating the jurisdictional authority of each of Delaware's courts. Recently formed by the Delaware Judiciary, the Jurisdictional Improvement Committee was created in response to the Joint Study of the Delaware Courts by the Delaware Chapter of the American College of Trial Lawyers (ACTL) and the Delaware State Bar Association (DSBA). The Committee’s mission is to help the Delaware Courts operate more productively and efficiently by eliminating unnecessary overlap in the trial courts’ jurisdiction and by assigning certain types of cases to the trial court best positioned to address those cases cost-effectively and expertly. More ›
Court Of Chancery Favors Plain Language In Earn-Out Dispute And Declines To Imply Contractual Terms
Greenstar IH Rep. LLC v. Tutor Perini Corporation, C.A. No. 12885-VCS (Oct. 31, 2017)
With every contract under Delaware law comes the obligation to not act so as to deprive the counter party of the benefit of its bargain. This implied obligation plays a limited role, however, and does not trump the contract’s plain terms. This decision addresses this principle in an earn-out dispute surrounding terms about profits and taxes.
ShareCourt Of Chancery Enforces Arbitration Clause Despite Designated Arbitrator’s Unavailability
In re Good Technology Corporation Stockholder Litigation, C.A. No. 11580-VCL (Oct. 27, 2017)
This decision resolves a unique dilemma: what to do when the contracting parties agree to an arbitration clause designating a specific arbitrator (the former mediator in the case) to resolve disputes, but, it turns out, he will not serve in that capacity and the parties cannot agree on a replacement. Under the facts of this case, which involve the JAMS rules, the Court enforces the arbitration clause so that the chosen but unavailable arbitrator can decide whether he should pick his successor as a matter of procedural (as opposed to substantive) arbitrability.
ShareDelaware Supreme Court Sets A New Standard And Clarifies The Spectrum Of Forum Non Conveniens Standards
Gramercy Emerging Markets Fund v. Allied Irish Banks P.L.C., No. 49, 2017 (Oct. 27, 2017)
Under the Cryo-Maid factors, a Delaware court may dismiss a suit on forum non conveniens grounds only after the defendant shows that litigating in Delaware would impose overwhelming hardship. Under the McWane doctrine, when a Delaware action is not the first-filed suit on the subject matter because there is a prior pending suit elsewhere, however, a Delaware court has discretion to dismiss or stay the later-filed suit whether or not the defendant faces overwhelming hardship. This decision deals with a particular convergence of these two doctrines, answering the question: when a first-filed suit elsewhere is procedurally dismissed and thus no longer pending, is a motion to dismiss for forum non conveniens in a later-filed Delaware suit still subject to the more plaintiff-friendly overwhelming hardship standard? The short answer is no. But that doesn’t mean the suit should be subject to the more defendant-friendly McWane standard instead. Rather, as the Court holds here, there is a middle ground, tilted to neither plaintiff nor defendant. The Court rules that the Cryo-Maid factors relevant to a showing of overwhelming hardship control the analysis, but requires only that the factors favor dismissal, rather than establish overwhelming hardship.
ShareChancery Approves Incorporation of Reference Condition in Section 220 Litigation
Books and records actions are heralded as the “tools at hand” for litigators pursuing shareholder claims against a corporation. In fact, the Delaware Court of Chancery has been critical of litigants who failed to take advantage of a shareholder’s right to request the books and records of a corporation prior to commencing litigation against the corporation. See, e.g., Thermopylae Capital Partners v. Simbol, 2016 WL 368170, at *17 (Del. Ch. Jan. 29, 2016). And while many shareholders have utilized Section 220’s summary proceeding to get a corporation’s books and records, Delaware courts have approved certain conditions on the use of those records. As discussed below, the Court of Chancery recently approved a company’s proposed incorporation condition, assuring the company that all the documents it produces pursuant to a books and records demand will be incorporated, even if not explicitly referenced, in any subsequent litigation where the plaintiff relies on any of the records produced by the company. More ›
ShareSuperior Court Explains Coverage Analysis Rules
This is an interesting decision for two reasons. First, it settles the choice of law in a coverage case for a nationwide set of claims. The principal place of business for the insured is the law to apply. More ›
ShareSuperior Court Sets Out Rules For Class Certification
This is an important decision became it sets out the most recent rules for determining when a class may be certified. Briefly, the class members claims must be capable of resolution on a class-based basis and not by looking at each class member’s circumstance. While easy to say, that is harder to actually do and this decision explains the reasoning that should be used.
SharePetition Denied to Remove Wilmington Trust as the Trustee of du Pont Family Trusts
Wilmington Trust serves as the sole trustee for certain du Pont Family Trusts established in the 1940s and 1950s. For many years, Wilmington Trust was closely associated with the du Pont family, and was managed in part by family members. Following the near collapse of its business in the 2008 financial crisis, Wilmington Trust was acquired by M&T Bank. Today, Wilmington Trust is a wholly-owned subsidiary of M&T Bank, and no member of the du Pont family serves on Wilmington Trust’s board. In 2013, at the prompting of the current trusts’ beneficiary, Douglas du Pont, Wilmington Trust agreed to modify the trusts to authorize Mr. du Pont to serve as the “Investment Direction Advisor” for the trusts’ assets, which limited Wilmington Trust to a principally ministerial role in the trusts’ on-going administration. In October 2016, alleged tensions between Mr. du Pont and Wilmington Trust led Mr. du Pont to petition the Court of Chancery to seek to remove Wilmington Trust as the trustee altogether, and to appoint a successor trustee. More ›
ShareCourt Of Chancery Explains Long-Arm Jurisdiction Based On Creating A Subsidiary
The Dow Chemical Company v. Organik Kimya Holding A.S., C.A. No. 12090-VCG (Oct. 19, 2017)
Under the Papendick v. Bosch decision, incorporating an entity in Delaware may give rise to long-arm jurisdiction over the entity’s parent, even a foreign one with no other contacts with the State of Delaware. The act of incorporating in Delaware, however, must be an “integral component” of the alleged wrongdoing. This decision explains how to meet that test, which is heightened slightly after the plaintiff conducts jurisdictional discovery. The test was satisfied in this case based on allegations that the defendant, desiring to enter the U.S. market, misappropriated the plaintiff’s trade secrets and incorporated a Delaware entity to profit from the misappropriation.
ShareCourt Of Chancery Interprets Credit Agreement And Declines To Consider Alleged Oral Modification
Pine River Master Fund Ltd. V. Amur Finance Co., Inc., C.A. No. 2017-0145-JRS (Oct. 12, 2017)
This decision interpreting a credit agreement’s terms is another reminder that an alleged oral modification to a written contract will not vary the contract’s terms when it has an integration clause and otherwise speaks to the subject of the modification.
ShareCourt Of Chancery Decides It Will Determine Stock Validity In A Section 225 Case
In a contest over who has been elected to a board of directors under Section 225 of the DGCL, it is sometimes critical to decide if certain stock was validly issued and thus can be voted. This decision sets out a circumstance when that issue may be determined in Section 225 case even when the holders of the contested stock are not parties to the litigation.
ShareChancery Declines Confidential Treatment to Nonparty’s Claimed Sensitive Business Info
American courts have long recognized that the public enjoys a First Amendment right of access to judicial proceedings and records. While forceful, the right is only presumptive, and the public’s interest in access may be overcome with an adequate showing of need. More ›
Share
