Justia Delaware Court of Chancery Opinion Summaries

Plaintiff and Defendant entered into a Settlement and License Agreement to resolve then-pending patent infringement litigation. After Plaintiff’s license was terminated, Plaintiff filed a complaint for declaratory, injunctive, and other relief against Defendant. Defendant moved to dismiss, arguing that the Court of Chancery was an improper venue because the Agreement’s forum selection clause directed “any dispute” between the parties to Georgia. Plaintiff argued that the Agreement was terminated before it filed the complaint, and regardless, its claims were not subject to the forum selection clause. The Court of Chancery dismissed the complaint without prejudice, holding that the courts identified in the forum selection clause were proper forums to determine whether the Agreement had been terminated, and if the Agreement was effective when Plaintiff filed the complaint, then dismissal for improper venue would be proper. View "Scanbuy, Inc. v. NeoMedia Techs., Inc." on Justia Law

Plaintiff, an inmate at the James T. Vaughn Correctional Center (JTVCC), filed this action against personnel at the JTVCC seeking an injunction and compensatory damages for placement in isolated confinement and, subsequently, maximum security housing. Defendants moved to dismiss Plaintiff’s claim and to revoke his in forma pauperis status pursuant to the three strikes rule of 10 Del. C. 8804(f). The Court of Chancery granted Defendants’ motion to revoke Plaintiff’s in forma pauperis status and ordered the complaint dismissed unless Plaintiff filed all required filing fees within sixty days, holding that Plaintiff failed to show that he met the statutory exception to the three strikes rule. View "Biggins v. Phelps" on Justia Law

After TPC Group Inc. announced its acquisition by First Reserve Corporation, SK Capital Partners, and their affiliates (collectively, the PE Group), Plaintiffs, shareholders of TPC, brought a class action against TPC, the TPC’s board of directors, and the PE Group (collectively, Defendants). Plaintiffs’ claims were later mooted, and the Court of Chancery awarded attorneys’ fees for the disclosures resulting from Plaintiffs’ efforts. At issue before the Court was whether Plaintiffs were entitled to attorneys’ fees for the increase in the merger price achieved between the commencement of this litigation and the acquisition’s closing under an amended merger agreement. The Court of Chancery denied Plaintiffs’ application for an award of attorneys’ fees and expenses for the increase in the merger price, concluding that Plaintiffs did not cause the price increase in any way. View "In re TPC Group Inc. S’holders Litig." on Justia Law

In 2004, KKR & Co. LP (KKR) acquired KKR Financial Holdings LLC (KFN) in a stock-for-stock merger. Plaintiffs, stockholders of KFN, challenged the merger by filing a class action complaint, asserting breach of fiduciary duty claims against the members of the KFN board and KKR. The Court of Chancery dismissed the action for failure to state a claim for relief, holding (1) Plaintiffs’ fiduciary duty claim against KKR premised on the theory that KKR was a controlling stockholder of KFN failed, as KKR did not control the board of KFN when it approved the merger; and (2) Plaintiffs’ fiduciary duty claim against the directors of KFN failed because the board’s approval of the merger was subject to business judgment review. View "In re KKR Fin. Holdings LLC Shareholder Litig." on Justia Law

A class of stockholders of Rural/Metro Corporation (Rural) filed a class action against RBC Capital Markets, LLC (RBC) for aiding and abetting breaches of fiduciary duty by the board of directors of Rural in relation to a merger between Rural and Warburg Pincus, LLC. The post-trial decision held RBC liable to Plaintiffs but did not fix an amount of damages suffered by the class. This opinion quantified the amount of damages for which RBC was liable, setting the amount of RBC’s liability to the class at $75,798,550, which represented eighty-three percent of the total damages. The court also awarded pre- and post-judgment interest at the legal rate from June 30, 2011, until the date of payment. View "In re Rural/Metro Corp. Stockholders Litig." on Justia Law

An employer terminated an employee, who was represented by a union. The union grieved the termination and, in accordance with a collective bargaining agreement, the matter was submitted to arbitration. An arbitrator ordered the employee reinstated and directed that the employee be credited with benefits that were lost as a result of the termination, including the payment of bonuses for safety and attendance. When the employer did not pay these bonuses to the employee, the union filed an unfair labor practice charge with the Public Employment Relations Board (PERB). The PERB concluded that safety and attendance bonuses were within the language and scope of the arbitrator’s award. The employer appealed, arguing that the PERB substituted its judgment improperly to modify or to interpret an ambiguous, and thus unenforceable, arbitration award. The Court of Chancery affirmed the decision of the PERB, holding that the bonuses were unambiguously awarded and thus fell within the plain language of the arbitration award, and therefore, the PERB’s decision, whether or not entitled to deference in this context, must be sustained. View "State, Del. Transit Corp. v. Amalgamated Transit Union, Local 842" on Justia Law

Plaintiff-individual, who owned common stock of Defendant-corporation, sent a letter to Defendant seeking to inspect certain of Defendant’s books and records pursuant to 8 Del. C. 220. Plaintiff’s ultimate goal in pursuing her books and records request was to determine whether there was a basis to bring a derivative suit based on wrongs alleged in a previous derivative action. In defense to the request Defendant alleged that Plaintiff’s contemplated derivative action would be time-barred. The Court of Chancery entered judgment in favor of Defendant, holding that because Plaintiff’s contemplated derivative action would be time-barred and because no other purpose had been identified, Plaintiff failed to prove a proper purpose for the books and records inspection, which was an essential element of her case under section 220. View "Wolst v. Monster Beverage Corp." on Justia Law

Plaintiff owned debt securities issued by Defendant, a Delaware corporation. Plaintiff sued Defendant, asserting breach of fiduciary duty claims derivatively against Defendant’s board of directors (Board) and Defendant’s controller (Controller). Specifically, Plaintiff alleged that Defendant was insolvent and that the individual defendants, members of the Board, should wind down Defendant’s business and dissolve the company, but instead, the Board had transferred value preferentially to its Controller. Plaintiff also asserted fraudulent transfer claims directly against the Controller and its affiliate. Defendants filed a motion to dismiss the complaint. The Court of Chancery (1) denied the motion to the extent that Plaintiff challenged specific transfers of value to the Controller and its affiliate, as the complaint adequately stated a claim in this regard; and (2) granted the motion to the extent that Plaintiff challenged the Board’s business decision to take on greater risk, as the complaint did not plead facts that would be sufficient to rebut the business judgment rule. View "Quadrant Structured Prods. Co., Ltd. v. Vertin" on Justia Law

Seaport Village Operating Company, LLC (the “Company”) sought to recover from Seaport Village Ltd. (“Limited”) attorneys’ fees and expenses that the Company incurred in two lawsuits against Limited. The Company’s limited liability company agreement included a fee-shifting provision providing that the prevailing party in disputes arising out of the Agreement is entitled to recover reasonable attorneys’ fees in connection with the prosecution or defense of the action. Limited argued that because the Company did not sign the agreement, it was not a party to the agreement. The Court of Chancery awarded the Company fees and expenses, holding that, under Delaware law, the Company, although not a signatory, was a party to the operating agreement and could therefore enforce the fee-shifting provision against Limited. View "Seaport Village Ltd. v. Seaport Village Operating Co., LLC" on Justia Law

The parties in this case were two members of a Delaware LLC that was created to hold a subsidiary operating a wind farm on the island of Maui in Hawaii. Defendant filed an arbitration demand in Hawaii based on its understanding of the operative LLC agreement. In response, Plaintiff filed suit in the Court of Chancery seeking to enjoin the Hawaii arbitration. After the initiation of this litigation, Defendant filed a motion to compel arbitration in Hawaii. Defendant argued that the Court of Chancery should dismiss this litigation in favor of the pending Hawaii action. The Court of Chancery concluded that the parties agreed in the LLC agreement that both arbitration and questions of arbitrability shall be undertaken in a Hawaii court, and therefore, this action must be stayed or dismissed in favor of Defendant’s action currently pending in Hawaii. View "Kahuku Holdings, LLC v. MNA Kahuku, LLC" on Justia Law