Delaware Business Litigation Report: Litigation

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Litigation

Delaware Business Litigation Report

Provides business-related litigation information which has been summarized by attorneys currently practicing in Delaware's courts. Searchable Case Summary Database contains summaries of court opinions released since January 2005. Provides links to other resources such as the Delaware Code and administrative rules.
By Morris James LLP

Post Frequency: 5/day

Last Entry: March 29, 2011 at 12:53:19

Abbott Labs Sued by States Under Sherman Act

Posted on March 20, 2008
State of Florida, et al. v. Abbott Laboratories et al., Del. District Court 1:08-CV-00155 (filed March 18, 2008).A group of eighteen states and the District of Columbia filed a complaint in Delaware District Court against Abbot Laboratories, Fournier Industrie et Sante and Laboratoires Fournier S...

SLC Formed after Demand Excused is not "Too Late"

Posted on March 19, 2008
In re infoUSA, Inc. Shareholders Litigation, Consol. C.A. No. 1956-CC (March 17, 2008).A special litigation committee was formed by the board of infoUSA, Inc. at the end of December, after a motion to dismiss derivative litigation had been denied and after a finding had been made by the Court of Chancery that demand was excused...

Court of Chancery Explains Options Cases

Posted on March 07, 2008
Weiss v. Swanson, C.A. 2828-VCL (March 7, 2008)In the latest of the Chancery decisions on complaints challenging the grant of options, the Court has explained what it takes to state a derivative complaint that excuses demand on the Board. Briefly, the Court here focused on what was disclosed to the stockholders when they were asked to approve option plans or elect directors who had received option grants...

Court of Chancery Reviews Class Representative Qualifications

Posted on March 06, 2008
In re Technologies, Inc. Shareholders Litigation, C.A. No. 1525-VCL (March 6, 2008). For a long time it has been evident that some plaintiffs show up frequently as class representatives. The recent scandal involving perhaps the major securities class action law firm has only reminded everyone of the odd "coincidence" that one person could have so many class actions to bring...

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Court of Chancery Denies Standing For Lost Shares

Posted on February 29, 2008
Postorivo v. AG Paintball Holdings Inc., C.A. No. 2991-VCP (February 29, 2008). It has long been recognized that a stockholder may lose her standing to bring derivative litigation by losing her shares in a merger. There is a recognized exception to this rule for mergers designed just to eliminate derivative litigation...

Court of Chancery Interprets Indenture

Posted on February 29, 2008
Wilmington Trust Co. v. Tropicana Entertainment LLC, C.A. 3502-VCN (February 29, 2008)The Court of Chancery rarely interprets bond indentures; so in the spirit of the date of this decision, the Court did so here. What is particularly interesting about this case is the way the Court reasoned to the result...

Additional Complaints Filed Against Yahoo! in Delaware

Posted on February 28, 2008
Yesterday, February 27, 2008, two new complaints were filed against Yahoo! in the Court of Chancery. The first is a class and derivative action, Plumbers and Pipefitters Local Union No. 630 Pension-Annuity Trust Fund v. Yahoo!, C.A. 3578, which you can access here...

Class Actions Filed in Delaware Challenge the Yahoo! Board's Rejection of Microsoft's Offer

Posted on February 22, 2008
On Monday, February 11th, and Thursday, February 21st, two related class actions were filed in the Court of Chancery against the directors of Yahoo! for breach of fiduciary duties in connection with the offer by Microsoft, made on February 1st, to acquire Yahoo! for $31 per share, a price which reflected a 62 percent premium above the Yahoo! share value at the close of the day prior to the offer...

Delaware Supreme Court Rules That Directors Lack Standing to Bring Derivative Suits

Posted on February 19, 2008
Schoon v. Smith, C.A. No. 554, 2006 (Del. Feb. 12, 2008).In an important ruling, the Delaware Supreme Court upheld bedrock principles of Delaware corporate law and governance and rejected plaintiff’s argument that directors of Delaware corporations should have standing to bring derivative suits on behalf of companies upon whose boards they sit...

District Court Grants Summary Judgment on Consumer Fraud, Breach Claims

Posted on February 18, 2008
Millett v. Truelink, Inc., 2008 WL 345937 (D.Del. Feb. 7, 2008)In this opinion the District Court granted the provider of a credit report monitoring service summary judgment on claims that it violated state consumer protection provisions and contractual obligations...

District Court Finds Insurance Policy Language Precludes Breach Claim, But Estoppel and Waiver Claims Survive

Posted on February 18, 2008
Drexel v. Harleysville Ins. Co., 2008 WL 356938 (D.Del. Feb. 11, 2008)Here the District Court evaluated a claim from an insured that a denial of coverage based on policy expiration constituted a breach of contract. The insured owned a property that sustained fire damage, and submitted a claim to Defendant, his insurer...

Court of Chancery Dismisses Suit Over Decision To Not Pursue A Merger

Posted on February 18, 2008
Gantler v. Stephens, C .A. No. 2392-VCP (February 14, 2008). This decision illustrates the confusion that exists over the scope of review of a board's decision to not pursue a merger and largely eliminates the uncertainty. Briefly, the board here decided not to pursue a merger opportunity and the potential acquirer then withdrew its offer...

Court of Chancery Explains Requirements For SLC Report

Posted on February 18, 2008
Sutherland v. Sutherland, C.A. No. 2399-VCL (February 14, 2008). This is another decision that explains what must be done to have the report of a special litigation committee ("SLC") respected by the court. To begin with, the use of a single board member for the SLC "pressed the theory of Zapata to the extreme"...

District Court Finds That Participation in Delaware Merger Confers Jurisdiction, Denies Motion to Dismiss

Posted on February 03, 2008
G & G LLC v. White, 2008 WL 205150 (D. Del. Jan. 25, 2008)In this opinion declining to dismiss for lack of personal jurisdiction, the District Court found that it had personal jurisdiction over both the directors/officers of a Delaware corporation and over a foreign corporation that invested in a Delaware corporation...

Court of Chancery Dismisses Complaint Based On Conjecture

Posted on February 03, 2008
Pfeffer v. Redstone, C.A. No. 2317-VCL (February 1, 2008). At first this seems like a common disclosure case. It is more than that, however. The court here shows that it expects claims to be based on more than mere conjecture to survive a motion to dismiss...

Superior Court Allows Expert Testimony On "Materiality" When Not An Ultimate Issue

Posted on February 03, 2008
Mizel v. Xenonics, Inc., 2008 WL 116203 (Del. Super. Jan. 11, 2008).This decision addresses the question of whether an expert can testify as to materiality under the securities laws. The moving party argued that materiality was an ultimate issue in this breach of contract action and thus could not be the subject of expert testimony, citing Hill v...

Court of Chancery Orders Meeting For Bankrupt

Posted on February 03, 2008
Fogel v U.S. Energy Systems, Inc., C.A. No. 3271-CC (January 15, 2008). This is another in a line of decisions holding that the Court of Chancery may order the holding of a stockholders' meeting even if the company is in a bankruptcy proceeding. The automatic stay does not apply.

Court of Chancery Defines Illegal Vote Buying

Posted on February 03, 2008
Portnoy v. Cryo-Cell International Inc., C.A. No. 3142-VCS (January 15, 2008). This is the definitive decision on when arrangements to secure a stockholder's vote are invalid. "Vote buying" has long been criticized without much thought. After all, the Delaware General Corporation Code specifically authorizes arrangements to lock up a stockholder's vote...

Court of Chancery Sets Fees for Supplemental Proxy Materials

Posted on February 03, 2008
In re James River Group Inc. Shareholders Litigation, C.A. No. 3173-VCL ( January 8, 2008). Here, the court awarded $400,000 in fees in connection with the settlement of a class action when the relief obtained was a supplement to the proxy statement.While the company claimed it was always going to send the supplemental materials, the court noted that was contrary to the recital in the settlement agreement...

Delaware Patent Litigation Report

Posted on January 30, 2008

Delaware Business Bankruptcy Report

Posted on January 30, 2008

Posted on January 30, 2008
Delaware Patent Litigation Report

Court of Chancery Grants Advancement to an Employee

Posted on January 17, 2008
Sassano v. CIBC World Markets Corp. C.A. No. 3066-VCL ( January 17, 2008). It is not widely recognized that Delaware law permits a corporation to grant advancement of attorney fees to employees who are not directors and may even be fairly minor employees...

Court of Chancery Upholds Agreement To Agree

Posted on January 16, 2008
Pharmathene Inc. v. SIGA Technologies. Inc., C.A. No. 2627-VCP (January 16, 2008). Whether an agreement to agree may be enforced seems like an odd question. After all, if the parties really had an agreement then why not just say so and not use a term sheet or other vague type of "agreement to agree" to express their intent...

Superior Court Grants Motion to Amend Answer, Even Though Defendant Had Some Knowledge of New Fact Before Filing

Posted on January 14, 2008
Delta Eta Corp. v. University of Delaware, 2007 WL 4578278 (Del. Super. Ct., Dec. 27, 2007). This decision addresses a party’s ability to amend its answer, under Rule 15(a), when the 20-day period to amend as a matter of right has expired. The litigation arose when the University of Delaware terminated a lease it entered into with a fraternity to maintain a chapter house and then took title to the property, triggering a requirement under the agreement that it pay the fraternity the fair market value of the remainder of its leasehold interest...

Superior Court: Employer Owes No Duty to Employee's Spouse

Posted on January 14, 2008
In re: Asbestos Litig., 2007 WL 4571196 (Del. Super. Ct. Dec. 21, 2007). In this negligence action, a wife alleged that she was exposed to asbestos while laundering her husband’s work clothes. The employer moved for summary judgment, claiming it owed no duty to an employee’s spouse who had never set foot on company property and had only been injured as a result of take-home exposure...

Superior Court: Oral Contract Created By Contractor's Representations

Posted on January 14, 2008
MAA Real Estate LLC v. Patel, C.A. No. 06C-02-249 (Del. Super. Ct. Dec. 7, 2007).In this breach of contract action, there was no written agreement, only an unsigned pricing sheet prepared by the contractor making the repairs. The court had to determine whether the parties nonetheless mutually assented to any of the terms on the sheet or otherwise entered into an oral contract...

Court of Chancery Requires Disclosure By Special Committee

Posted on January 02, 2008
Ryan v. Gifford, C.A. No. 2213-CC (January 2, 2008). This is an interesting decision because it points out how to do almost everything wrong in using a special committee to investigate accusations of misconduct. The result is that any privilege from disclosure that the work of the special committee may have enjoyed was completely lost and all of its extensive efforts were ordered to be turned over to the plaintiffs in the underlying litigation...

Court of Chancery Explains Contract Interpretation Rules

Posted on December 21, 2007
United Rentals Inc v. RAM Holdings Inc. C.A. No. 3360-CC (December 12 and 21, 2007). In these two decisions the Court of Chancery sets out how it will interpret a contract. Following the objective theory of contract interpretation, the court searches for the "common understanding" of the parties...

Court of Chancery Upholds Statute of Repose for Dissolved Corporations

Posted on December 20, 2007
The Territory Of The Virgin Islands v. Goldman, Sachs & Co., C.A. No. 2505-VCS (December 20, 2007). This decision upholds the law that Section 278 of the Delaware General Corporation Law ("DGCL") acts as a statute of repose to bar the filing of all litigation against a Delaware corporation after 3 years from the date of its dissolution...

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