Justia Delaware Court of Chancery Opinion Summaries

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The Court of Chancery held that it was without jurisdiction to address Plaintiff's claim seeking equitable relief for alleged common-law slander on the basis that equity will not enjoin a libel. Plaintiff brought this complaint against Defendants, business competitors, alleging tortious interference with prospective business relations and common-law defamation. As to the defamation claim, Plaintiff sought to enjoin future defamatory utterances. Defendants filed a motion to dismiss. The Court of Chancery granted the motion to dismiss the defamation count, subject to transfer to the superior court, holding that, under this Court's precedent, equity in general will not enjoin future defamation, and no exception to the general rule applies in this case. View "Preston Hollow Capital LLC v. Nuveen LLC" on Justia Law

Posted in: Business Law

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In this case disputing who comprised the boards of directors of the nominal defendants the Court of Chancery treated Defendants' motion for judgment on the pleadings as one for summary judgment and granted Plaintiffs an opportunity to submit an affidavit identifying disputed facts foreclosing summary judgment in Defendants' favor, holding that the consents appointing the directors were not appropriately considered on a motion for judgment on the pleadings. After the National Assembly of Venezuela declared the presidency of Nicolas Maduro illegitimate it appointed Jan Guaido as Interim President. When Guaido assumed office his government appointed a new board of directors to govern Petroleos de Venezuela S.A. (PDVSA), Venezuela's state-owned oil company. Guaido's newly appointed directors reconstituted the boards of directors of the nominal defendants - Delaware entities owned by PDVSA. Plaintiffs, who previously served as directors of the nominal defendants, sought a declaration that they comprised the rightful boards of the nominal defendants. The directors appointed by Guaido's PDVSA board counterclaimed. All parties cross-moved for judgment on the pleadings. The Court of Chancery accepted as binding the United States President's recognition of the Guaido government and assumed the validity of the Guaido government's appointments to the PDVSA board but stayed the motions to permit Plaintiffs to submit an affidavit under Ct. Ch. R. 56(e). View "Jimenez v. Palacios" on Justia Law

Posted in: Business Law

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The Court of Chancery granted in part and denied in part Defendants' motion to dismiss Plaintiff's complaint brought in an effort to collect on an unpaid judgment, holding that one claim must be dismissed as untimely. JPMorgan Chase Bank, N.A. sued Data Treasury Corporation (DTC) and obtained a final judgment against DTC for $69 million. JPMorgan bought this action in an effort to collect on its judgment. DTC moved to dismiss all of JPMorgan's claims on a variety of grounds. JPMorgan claimed that DTC's directors should be liable for dividends DTC paid its stockholders after DTC licensed its patents to someone other than JPMorgan in violation of DTC's obligation to tell JPMorgan under a license agreement. JP Morgan also claimed it was entitled to recover the distributions because they were fraudulent transfers. The Court of Chancery held (1) JPMorgan had standing as a creditor of DTC to assert a claim under Section 174 to recover for itself and other creditors of DTC the dividends DTC paid; (2) the six-year limitations period in 8 Del. C. 174 is a statute of repose. The court thus finds that JPMorgan’s Section 174 claim must be dismissed as untimely; and (3) all of JPMorgan’s fraudulent transfer claims were timely filed. View "JPMorgan Chase Bank, N.A. v. Ballard" on Justia Law

Posted in: Business Law, Contracts

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The Court of Chancery granted in part Defendant's motion to dismiss as to the count alleging a violation of the federal Computer Fraud and Abuse Act (CFAA) but denied Defendant's motion as to the remainder of the non-contractual claims against him, holding that Plaintiff's CFAA claim was legally viable only as to Defendant's post-resignation conduct and that the dismissal of Plaintiffs' other claims was inappropriate. Defendant was the managing partner of Plaintiffs' Paris office and was a party to a limited liability partnership agreement that contained confidentiality obligations. Shortly before his resignation and then shortly after his resignation, Defendant accessed Plaintiffs' business files. Plaintiffs later sued for breach of the confidentiality provisions of the limited liability partnership agreement, asserting violations of the Delaware Uniform Trade Secrets Act (DUTSA), for common law conversion, and for violating CFAA. Defendant filed a motion to dismiss. The Court of Chancery granted the motion in part as to the CFAA claims but denied it as to the remaining claims, holding that under the narrow approach set forth in LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009), Defendant's actions while he was employed by Plaintiffs did not support a claim under the CFAA. View "AlixPartners, LLP v. Benichou" on Justia Law

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The Court of Chancery granted Defendant’s motion to dismiss Plaintiff’s complaint to vacate or modify an arbitration award for failure to state a claim, holding that there was no reasonably conceivable evident material miscalculation or evident material mistake in the arbitrator’s report. In 2017, Plaintiff and Company entered into a Securities Purchase Agreement. In 2018, under the dispute resolution provision of the agreement, Plaintiff and the Company engaged in mandatory, binding arbitration regarding the Company’s total accounts receivable reserve (the Total AR Reserve). The arbitrator issued a report determining the Total AR Reserve was $661,165. Plaintiff then filed a complaint to vacate or modify the arbitration award, arguing that the arbitrator made an evident material miscalculation or evident material mistake in his determination of the Total AR Reserve. The Court of Chancery disagreed and granted Defendant’s motion to dismiss. View "CLP Toxicology, Inc. v. Casla Bio Holdings LLC" on Justia Law

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In this construction dispute, the Court of Chancery granted Defendant’s motion to dismiss Plaintiffs’ complaint seeking to vacate or modify an arbitration award for failure to state a claim and denying Plaintiffs’ motion for summary judgment, holding that the arbitrator did not exceed the scope of his authority or act in manifest disregard of the law when he awarded Defendant damages. In their first claim, Plaintiffs argued that the arbitrator’s interpretation of the provisions in the contract between the parties regarding the total cost of the construction project evidences a manifest disregard for the law. In their second claim, Plaintiffs argued that the arbitrator exceeded his authority and acted in manifest disregard of the law when he issued an award for fees and expenses to Defendant. The Court of Chancery disagreed, holding that the arbitrator did not act in manifest disregard of the law in either respect. View "Stempien v. Marnie Properties, LLC" on Justia Law

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In this dispute regarding the commercialization of a patent covering a method for pooling insurance policies the Court of Chancery granted Defendants’ motion for judgment on the pleadings in which they argued that they did not owe any of the contractual or fiduciary obligations that Plaintiff sought to enforce, holding that Defendants were entitled to judgment as a matter of law. Plaintiff brought this action asserting claims for breach of contract and breach of fiduciary duties related to Defendants’ business development of a patent-holding entity and Defendants’ failure to provide certain information to Plaintiff. The Court of Chancery granted Defendants’ motion for judgment on the pleadings, thus mooting Plaintiff’s motion to compel and motion for default judgment, holding That Defendants carried their burden to show that Plaintiff could prove no set of facts in support of his claims that would entitle him to relief and that Defendants were entitled to judgment as a matter of law. View "Ross v. Institutional Longevity Assets LLC" on Justia Law

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The Court of Chancery held that an asset purchase agreement between the parties in this case required the parties to arbitrate their dispute over the net working capital of the assets that Defendant brought from Plaintiff, thus granting Plaintiff’s motion for summary judgment. Before the Court, Defendant argued that the parties agreed to an expert determination of certain narrow disputes but not to binding arbitration. The Court of Chancery disagreed, holding (1) the contract language was unambiguous and manifested an intent to require the parties to arbitrate their disputes; and (2) there was no basis to rule that a failure to include arbitration rules in an arbitration clause invalidates the arbitration clause or changes the distinction between procedural and substantive arbitrability. View "Agiliance, Inc. v. Resolver SOAR, LLC" on Justia Law

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The Court of Chancery granted Defendant’s motion to dismiss this complaint alleging that Defendant breached an earnest agreement for lack of subject matter jurisdiction, holding that the complaint did not seek equitable relief and that an adequate remedy existed at law. This complaint focused on Defendant’s purported breaches of the earnest agreement that the parties entered into on the same day they entered into a stock purchase agreement. Defendant moved to dismiss the complaint for lack of subject matter jurisdiction. The Court of Chancery granted the motion, holding that Defendant’s failure to perform its obligations under the earnest agreement could be remedied with money damages, and because Plaintiff had an adequate remedy at law, the Court lacked subject matter jurisdiction over this matter. View "Quarum v. Mitchell International, Inc." on Justia Law

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The Court of Chancery denied that motion to dismiss filed by Defendants in this case claiming that Delaware’s public schools are failing to educate low-income students, students with disabilities, and students whose first language is not English (collectively, Disadvantaged Students), holding that Plaintiffs stated justiciable claims. Plaintiffs filed this lawsuit against the Governor, the Secretary of Education, and the State Treasurer, arguing that the State was not providing Disadvantaged Students adequate funding, appropriate classroom environments, and educational services and seeking declaratory judgments and equitable relief compelling the State to comply with its constitutional obligations. Defendants filed a motion to dismiss. The Court of Chancery denied the motion, holding (1) the complaint’s allegations supported a reasonable inference that the State is violating the Education Clause by failing to provide a general and efficient system of public schools that educates Disadvantaged Students and that Delaware’s public schools fall short of that mark; and (2) the public schools’ constitutional obligation is one that the judiciary can enforce. View "Delawareans for Educational Opportunity v. Carney" on Justia Law