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Defendant Darius Harden argued he suffered prejudice because his attorney did not represent him effectively at his sentencing hearing. As originally charged, Harden faced potential convictions for Home Invasion, Assault Second Degree, Terroristic Threatening, Theft, Offensive Touching, and Endangering the Welfare of a Child. Eventually, he pled guilty to Assault Second Degree and Endangering the Welfare of a Child, and the State agreed to cap its sentencing recommendation to 15 years. This agreement was important because Harden, due to his habitual offender status, faced a potential maximum sentence of life imprisonment for the crimes to which he pled guilty. Before his sentencing hearing, Harden’s trial counsel from the Public Defender’s Office changed jobs. Rather than seek a continuance to prepare for sentencing with Harden and develop a sound strategy, Harden’s new sentencing counsel proceeded to the sentencing hearing after, at best, a fleeting discussion with Harden on the day of the hearing either in lock-up or in the courtroom itself. Sentencing counsel did not prepare Harden for allocution or make any effort to discuss with him whether there was mitigating evidence that might support a more lenient sentence. Instead, Harden’s new counsel acted on the supposed strategy of seeking less than the 15 years that the State agreed not to exceed in its recommendation. Harden did not appeal his conviction. After his pro se motion for a sentence reduction was denied, Harden brought a Rule 61 petition alleging that his counsel’s performance in the sentencing phase was ineffective and prejudiced him. In addressing Harden’s petition, the Superior Court assumed that Harden’s counsel had performed unreasonably, but held that there was no prejudice because the record supporting a sentence of 18 years was so strong. The Delaware Supreme Court reversed: “When a defendant’s counsel fails to prepare himself or his client, and the sentencing decision itself reflects the negative effects of that failure, prejudice under Strickland [v. Washington, 466 U.S. 668 (1984)] exists. For these reasons, we reverse and remand for resentencing before a different judge.” View "Harden v. Delaware" on Justia Law

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Prior to “Rauf v. Delaware,” Craig Zebroski was convicted of two counts of first-degree murder and sentenced to death. After the Delaware Supreme Court held in “Powell v. Delaware” that Rauf was retroactive, his death sentence was vacated and he was resentenced to a mandatory term of life without parole. Zebroski contended that this sentence was unconstitutional in light of both Rauf and the United States Constitution. He contended Rauf invalidated not just Delaware’s capital sentencing scheme, but all of 11 Del. C. 4209, the statute that specifies the penalties for first-degree murder, which was where the capital sentencing procedures are codified. Under Zebroski’s reading, Rauf invalidated the entirety of section 4209, and thus the statute’s life-without-parole alternative could not be enforced and he should have instead been sentenced to the residual punishment prescribed by statute for all other class A felonies: a term of years ranging from fifteen years to life. In the alternative, Zebroski argued if Rauf did not strike down all of section 4209, it should have, because the life-without-parole alternative was not severable from the rest of the statute. The Delaware Supreme Court held Rauf did not invalidate the entirety of section 4209, and, as the Court held in Powell, the statute’s life-without-parole alternative was the correct sentence to impose on a defendant whose death sentence is vacated. And the Court found no constitutional fault in imposing that sentence on him. View "Zebroski v. Delaware" on Justia Law

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The Court of Chancery initially found that Wal-Mart stockholders who were attempting to prosecute derivative claims in Delaware could no longer do so because a federal court in Arkansas had reached a final judgment on the issue of demand futility first, and the stockholders were adequately represented in that action. But the derivative plaintiffs in Delaware asserted that applying issue preclusion in this context violated their Due Process rights. The Delaware Supreme Court surmised this dispute implicated complex questions regarding the relationship among competing derivative plaintiffs (and whether they may be said to be in “privity” with one another); whether failure to seek board-level company documents renders a derivative plaintiff’s representation inadequate; policies underlying issue preclusion; and Delaware courts’ obligation to respect the judgments of other jurisdictions. The Delaware Chancellor reiterated that, under the present state of the law, the subsequent plaintiffs’ Due Process rights were not violated. Nevertheless, the Chancellor suggested that the Delaware Supreme Court adopt a rule that a judgment in a derivative action could not bind a corporation or other stockholders until the suit has survived a Rule 23.1 motion to dismiss The Chancellor reasoned that such a rule would better protect derivative plaintiffs’ Due Process rights, even when they were adequately represented in the first action. The Delaware Supreme Court declined to adopt the Chancellor’s recommendation and instead, affirmed the Original Opinion granting Defendants’ motion to dismiss because, under the governing federal law, there was no Due Process violation. View "California State Teachers' Retirement System, et al. v. Alvarez, et al." on Justia Law

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The State appealed the Superior Court’s dismissal of an indictment under Superior Court Criminal Rule 48(b) for unnecessary delay in bringing the defendant to trial. The Superior Court relied upon Delaware v. Pruitt, 805 A.2d 177 (Del. 2002) in deciding to dismiss the indictment. After review, the Delaware Supreme Court found that "Pruitt" was distinguishable and that dismissal of this case was made in error. View "Delaware v. Hazelton" on Justia Law

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Plaintiff-appellant Michael Laine slipped and fell on ice near a gas pump on the premises of a convenience store-gasoline station operated by the defendant-appellee, Speedway, LLC (“Speedway”). He was the driver of a Modern Maturity Center shuttle bus and slipped when he stepped off the shuttle to fill its tank with gasoline. The fall caused him to sustain serious physical injuries. The ice was caused by a light, freezing rain which was then falling. Laine filed suit against Speedway, alleging that negligence on Speedway’s part was the proximate cause of his injuries. The Superior Court granted summary judgment for Speedway, holding that under the “continuing storm” doctrine, Speedway was permitted to wait until the freezing rain had ended and a reasonable time thereafter before clearing ice from its gasoline station surface. This appeal raised two questions for the Delaware Supreme Court’s review: (1) should the Court continue to recognize the “continuing storm” doctrine; and (2) whether the doctrine applied to the facts of this case. After review, the Supreme Court concluded the continuing storm doctrine should continue to be recognized and that it did apply to the facts of this case. Therefore, the Court affirmed the Superior Court’s judgment. View "Laine v. Speedway, LLC" on Justia Law

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In this appeal, the issue before the Delaware Supreme Court was the limits of the stockholder ratification defense when directors make equity awards to themselves under the general parameters of an equity incentive plan. In the absence of stockholder approval, if a stockholder properly challenges equity incentive plan awards the directors grant to themselves, the directors must prove that the awards are entirely fair to the corporation. But, when the stockholders have approved an equity incentive plan, the affirmative defense of stockholder ratification comes into play. Here, the Equity Incentive Plan (“EIP”) approved by the stockholders left it to the discretion of the directors to allocate up to 30% of all option or restricted stock shares available as awards to themselves. The plaintiffs alleged facts leading to a pleading-stage reasonable inference that the directors breached their fiduciary duties by awarding excessive equity awards to themselves under the EIP. Thus, a stockholder ratification defense was not available to dismiss the case, and the directors had to demonstrate the fairness of the awards to the Company. The Supreme Court reversed the Court of Chancery’s decision dismissing the complaint and remanded for further proceedings. View "In Re Investors Bancorp, Inc. Stockholder Litigation" on Justia Law

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When Exelon Generation Acquisitions purchased Deere & Company’s wind energy business, it agreed to make earn-out payments to Deere if it reached certain milestones in the development of three wind farms that were underway at the time of the sale. Included in the sale was a binding power purchase agreement Deere secured from a local utility to purchase energy from the wind farm once it became operational. One of the three projects at issue in this appeal, the Blissfield Wind Project (in Lenawee County, Michigan) could not come to fruition because of civic opposition. Exelon managed to acquire another nascent wind farm from a different developer (Gratiot County, Michigan). Exelon managed to persuade the local utility to transfer the power purchase agreement there. The Gratiot County site was successful. Deere learned of Exelon’s success with the new site (and use of the power purchase agreement) and sue to recover the earn-out payment. Deere argued the earn-out payment obligation traveled from the Lenawee County farm to the Gratiot County farm. Exelon denied that it relocated the project, instead, it was prevented from developing the Blissfield farm by forces beyond its control. The Superior Court sided with Deere’s interpretation of the power purchase agreement, and ordered Exelon to pay the earn-out. The Delaware Supreme Court disagreed with this interpretation of the purchase agreement and reversed. View "Exelon Generation Acquisitions, LLC v. Deere & Company" on Justia Law

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A stormwater pipe ruptured beneath a coal ash pond at Duke Energy Corporation’s Dan River Steam Station in North Carolina. The spill sent a slurry of coal ash and wastewater into the Dan River, fouling the river for many miles downstream. In May 2015, Duke Energy pled guilty to nine misdemeanor criminal violations of the Federal Clean Water Act and paid a fine exceeding $100 million. The plaintiffs, stockholders of Duke Energy, filed a derivative suit in the Court of Chancery against certain of Duke Energy’s directors and officers, seeking to hold the directors personally liable for the damages the Company suffered from the spill. The directors moved to dismiss the derivative complaint, claiming the plaintiffs were required under Court of Chancery Rule 23.1 to make a demand on the board of directors before instituting litigation. Plaintiffs responded that demand was futile because the board’s mismanagement of the Company’s environmental concerns rose to the level of a "Caremark" violation, which posed a substantial risk of the directors’ personal liability for damages caused by the spill and enforcement action. The Court of Chancery disagreed and dismissed the derivative complaint. The Delaware Supreme Court concurred with the Court of Chancery that the plaintiffs did not sufficiently allege that the directors faced a substantial likelihood of personal liability for a Caremark violation. Instead, the directors at most faced the risk of an exculpated breach of the duty of care. Thus, the stockholders were required to make a demand on the board to consider the claims before filing suit. View "City of Birmingham Retirement & Relief System v. Good, et al." on Justia Law

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The remaining petitioners in this matter were former stockholders of Dell, Inc. who validly exercised their appraisal rights instead of voting for a buyout led by the Company’s founder and CEO, Michael Dell, and affiliates of a private equity firm, Silver Lake Partners (“Silver Lake”). In perfecting their appraisal rights, petitioners acted on their belief that Dell’s shares were worth more than the deal price of $13.75 per share, which was already a 37% premium to the Company’s ninety-day-average unaffected stock price. The Delaware appraisal statute allows stockholders who perfect their appraisal rights to receive “fair value” for their shares as of the merger date instead of the merger consideration. Furthermore, the statute requires the Court of Chancery to assess the “fair value” of such shares and, in doing so, “take into account all relevant factors.” The trial court took into account all the relevant factors presented by the parties in advocating for their view of fair value and arrived at its own determination of fair value. The Delaware Supreme Court found the problem with the trial court’s opinion was not that it failed to take into account the stock price and deal price; the court erred because its reasons for giving that data no weight (and for relying instead exclusively on its own discounted cash flow (“DCF”) analysis to reach a fair value calculation of $17.62) did not follow from the court’s key factual findings and from relevant, accepted financial principles. "[T]he evidence suggests that the market for Dell’s shares was actually efficient and, therefore, likely a possible proxy for fair value. Further, the trial court concluded that several features of management-led buyout (MBO) transactions render the deal prices resulting from such transactions unreliable. But the trial court’s own findings suggest that, even though this was an MBO transaction, these features were largely absent here. Moreover, even if it were not possible to determine the precise amount of that market data’s imperfection, as the Court of Chancery concluded, the trial court’s decision to rely 'exclusively' on its own DCF analysis is based on several assumptions that are not grounded in relevant, accepted financial principles." View "Dell, Inc. v. Magnetar Global Event Driven Master Fund Ltd, et al." on Justia Law

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At issue in this appeal are the limits of the stockholder ratification defense when directors make equity awards to themselves under the general parameters of an equity incentive plan. In the absence of stockholder approval, if a stockholder properly challenges equity incentive plan awards the directors grant to themselves, the directors must prove that the awards are entirely fair to the corporation. But, when the stockholders have approved an equity incentive plan, the affirmative defense of stockholder ratification comes into play. The Court of Chancery has recognized a ratification defense for discretionary plans as long as the plan has “meaningful limits” on the awards directors can make to themselves. Here, the Equity Incentive Plan (“EIP”) approved by the stockholders left it to the discretion of the directors to allocate up to 30% of all option or restricted stock shares available as awards to themselves. Plaintiffs have alleged facts leading to a pleading stage reasonable inference that the directors breached their fiduciary duties by awarding excessive equity awards to themselves under the EIP. The Delaware Supreme Court determined a stockholder ratification defense was not available to dismiss the case, and the directors had to demonstrate the fairness of the awards to the Company. The Court reversed the Court of Chancery’s decision dismissing the complaint and remanded this matter for further proceedings. View "In Re Investors Bancorp, Inc. Stockholder Litigation" on Justia Law