Justia Delaware Supreme Court Opinion Summaries

A father appealed a Family Court order terminating his parental rights. The Department of Services for Children, Youth and their Families (DFS) took custody of the father's son shortly after birth due to the father's mental health issues, substance abuse, unstable housing, employment status, previous involvement with DFS, history of domestic violence, and failure to plan for the child. DFS moved to be excused from case planning with the father under 13 Del. C. § 1103(d), arguing that grounds for termination existed under 13 Del. C. § 1103(a)(7) because the father's parental rights to another child had been involuntarily terminated in an earlier proceeding. The Family Court granted the motion and later terminated the father's parental rights after finding clear and convincing evidence that termination was in the best interests of the child.The father argued on appeal that Section 1103(d) is unconstitutional. The Supreme Court of Delaware reviewed the case and concluded that Section 1103(d) is not unconstitutional as applied to the father. The court found that the Family Court's analysis under Sections 1103(a)(7) and 1103(d) was supported by the record and that termination of the father's parental rights was in the best interests of the child. The court also rejected the father's argument that the "least restrictive means" standard should be applied, instead following the due process framework established by the U.S. Supreme Court in Mathews v. Eldridge.The Supreme Court of Delaware affirmed the Family Court's judgment, holding that the statutory grounds for termination were met and that the termination was in the best interests of the child. The court found that the father received sufficient process before the termination of his parental rights and that the Family Court's findings were supported by clear and convincing evidence. View "Schnell v. Department of Services for Children, Youth and their Families" on Justia Law

A borrower misrepresented his authority to act on behalf of two corporations he intended to acquire, providing false documents to a lender. Despite having documents contradicting the borrower's claims, the lender proceeded with a $7 million loan, including a confession-of-judgment affidavit naming the corporations as additional borrowers. When the borrower defaulted, the lender sought a confessed judgment against all borrowers, including the corporations, whose true officers were unaware of the transaction until served with notice of the judgment.The Superior Court of Delaware conducted a hearing and entered judgment in favor of the lender, finding that the borrower had apparent authority to bind the corporations. The court focused on the borrower's conduct and representations, concluding that they created the impression of authority sufficient to warrant the entry of a confessed judgment against the corporations.The Supreme Court of Delaware reviewed the case and found that the Superior Court's formulation of the test for apparent authority was flawed. The Supreme Court emphasized that apparent authority must be based on the principal's manifestations, not solely on the agent's conduct. The evidence did not support a finding that the corporations acted in a way that created a reasonable belief in the lender that the borrower was authorized to bind them. Consequently, the Supreme Court reversed and vacated the Superior Court's judgment, concluding that the borrower lacked apparent authority and that the corporations did not effectively waive their due process rights. View "Caribbean Sun Airlines Inc. v. Halevi Enterprises LLC" on Justia Law

Jason Terrell, M.D., provided consulting services and served on the board of directors of Kiromic Biopharma, Inc. between December 2014 and May 2021. During this period, Kiromic awarded Terrell stock options through three separate agreements. The first agreement granted Terrell an option to purchase 500,000 shares at $0.50 per share for consulting services. The second agreement, made when Terrell joined the board, granted him an option to purchase 500,004 shares at $0.17 per share. The third agreement, which included a waiver clause, granted him an option to purchase 500,004 shares at $0.19 per share. After Terrell resigned from the board in September 2019, Kiromic refused to honor the options from the first two agreements, claiming that Terrell waived his rights to those options in the third agreement.The Court of Chancery dismissed Terrell’s complaint seeking specific performance of the first two option grants, finding that the waiver clause in the third agreement unambiguously extinguished Terrell’s rights to the previous option awards. The court held that the language in the waiver clause, which stated that Terrell had no other rights to any other options or securities of the company, was clear and that the carveout for "securities issued" did not include unexercised options.The Supreme Court of the State of Delaware reviewed the case and found that the waiver language was susceptible to more than one reasonable interpretation. The court noted that the term "securities" could reasonably include options and that the parties' use of the word "issued" did not exclusively refer to shares. Therefore, the court concluded that the waiver clause was ambiguous and that the case should not have been dismissed at the pleadings stage. The Supreme Court reversed the Court of Chancery’s dismissal of the complaint and remanded the case for further proceedings. View "Terrell v. Kiromic Biopharma, Inc." on Justia Law

Oracle Corporation acquired NetSuite Inc. in 2016. Following the acquisition, Oracle stockholders filed a derivative suit against Oracle directors and others, alleging that Lawrence Ellison, a co-founder and substantial equity holder in both companies, forced Oracle to overpay for NetSuite. After the Court of Chancery denied the defendants’ motion to dismiss, the Oracle board formed a special litigation committee (SLC) to review the plaintiffs’ derivative claims. The SLC investigated and tried to settle the suit but eventually returned the case to the plaintiffs to pursue. The parties litigated over five years, and the Court of Chancery held a ten-day trial, ultimately entering judgment for the remaining defendants.The Court of Chancery found that the special committee negotiated the NetSuite transaction untainted by Ellison’s or Oracle management’s influence. The court concluded that Ellison did not exercise general control over Oracle or specific control over the transaction. The court also found that neither Ellison nor Catz withheld material information or misled the Oracle board and special committee.On appeal, the stockholders contended that the court erred by allowing the SLC to withhold its interview memos, applying business judgment review to a transaction involving an alleged controlling stockholder, employing the wrong legal standard when evaluating whether Ellison misled the special committee, and finding that Ellison’s alleged undisclosed future operational plans were immaterial.The Supreme Court of Delaware affirmed the Court of Chancery’s judgment. The court held that the SLC did not waive work product protection during mediation and that the plaintiffs did not demonstrate substantial need or undue hardship for the interview memos. The court also affirmed the application of business judgment review, finding that Ellison did not exercise actual control over Oracle or the transaction. Finally, the court agreed that Ellison’s undisclosed post-closing plans were immaterial to the special committee’s evaluation and negotiation of the transaction. View "In re Oracle Corporation Derivative Litigation" on Justia Law

The defendant, while under the influence of illegal drugs, killed a police officer and assaulted several others. He claimed that his behavior was due to someone substituting bath salts for his methamphetamine, and sought to use a statutory involuntary intoxication defense. The Superior Court granted a motion in limine, preventing the presentation of this defense and deemed the defendant’s evidence inadmissible.The Superior Court of Delaware reviewed the case. The court examined whether a person who knowingly introduces an unlawful intoxicating substance into their body can present an involuntary intoxication defense if the substance or its effects differ from what was anticipated. The court concluded that under Title 11, Section 423 of the Delaware Code, a person who knowingly introduces an unlawful intoxicating substance into their body is precluded from presenting an involuntary intoxication defense unless certain statutory exceptions apply.The Delaware Supreme Court affirmed the Superior Court’s decision. The court held that the statutory language was unambiguous and that a person who knowingly introduces an unlawful intoxicating substance into their body cannot claim involuntary intoxication unless specific statutory exceptions are met. The court did not address the admissibility of the defendant’s evidence under Rule 702 and 11 Del. C. § 303, as the defense was unavailable as a matter of law. The court also found that precluding the defense did not violate the defendant’s constitutional right to present a complete defense. View "Wilkerson v. State" on Justia Law

In 2005, James E. Cooke, Jr. was convicted of the rape and murder of Lindsey Bonistall, a University of Delaware student. Cooke's first conviction was overturned in 2009 due to his defense counsel's strategy, which conflicted with Cooke's plea of not guilty. Cooke was retried in 2012, where he represented himself initially but was later replaced by standby counsel due to his disruptive behavior. He was again convicted and sentenced to death, which was affirmed by the Delaware Supreme Court in 2014.Cooke filed a motion for postconviction relief in 2015, claiming ineffective assistance of counsel and other errors. The Superior Court denied his motion, leading to this appeal. Cooke argued that his second-trial counsel failed to explore his competency to stand trial, did not adequately investigate the case, and failed to object to the State's peremptory challenges during jury selection. He also claimed cumulative errors and procedural issues with the court's denial of his continuance requests and discovery limitations.The Delaware Supreme Court reviewed the claims and found that Cooke's counsel acted reasonably given Cooke's insistence on testifying and his refusal to cooperate with mental health evaluations. The court also found that Cooke was competent to stand trial, and his counsel's decisions were within the bounds of reasonable professional assistance. The court held that Cooke's claims of cumulative error and procedural issues were without merit and affirmed the Superior Court's denial of postconviction relief. View "Cooke v. State" on Justia Law

Police were surveilling a known drug dealer in a high-crime area. The dealer arrived at a Wawa convenience store in a car driven by his girlfriend. The dealer exited the car and stood near the gas pump. The defendant approached the dealer on foot, and they conversed briefly. The dealer then had his girlfriend exit the car, sat in the driver’s seat, reached under it for several seconds, and returned to the defendant. They engaged in a brief hand-to-hand exchange and then departed. Believing they had witnessed a drug transaction, police stopped the defendant, who informed them he had a firearm in his bag. Police found the firearm but no drugs, and the defendant was arrested for illegally possessing the gun.The defendant was charged with carrying a concealed deadly weapon and possession of a firearm with an altered serial number. He moved to suppress the evidence, arguing that police lacked reasonable articulable suspicion to stop him. The Superior Court of Delaware denied the motion, finding that police had reasonable articulable suspicion based on their belief that the defendant and the drug dealer had engaged in a hand-to-hand drug transaction. The defendant was found guilty on both counts and appealed the denial of his suppression motion.The Supreme Court of Delaware reviewed the case and affirmed the Superior Court’s decision. The court found that the trial court’s factual findings were supported by sufficient evidence. It held that, based on the totality of the circumstances and the experienced officers’ interpretation of the facts, police had reasonable articulable suspicion to stop the defendant. The court concluded that the stop was justified, and the evidence obtained was admissible. View "Register v. State" on Justia Law

LKQ Corporation, a Delaware corporation in the auto salvage and recycled parts business, designated certain employees as "Key Persons" eligible for Restricted Stock Units (RSUs) through RSU Agreements. These agreements included non-competition clauses and provisions for forfeiture of RSUs and any stock issued if the employee competed with LKQ within nine months post-departure. Robert Rutledge, a plant manager at LKQ, signed these agreements and received stock under them. In April 2021, Rutledge resigned and joined a competitor shortly after.LKQ sued Rutledge in Illinois federal court for breach of contract and unjust enrichment, seeking to enjoin him from working for a competitor and to recover proceeds from the sale of LKQ stock. The district court dismissed the unjust enrichment claim and granted summary judgment for Rutledge on the contract claims, holding that the non-competition provisions were unreasonable restraints of trade under Illinois law and unenforceable under Delaware law, based on the Court of Chancery's decision in Ainslie v. Cantor Fitzgerald, L.P.The United States Court of Appeals for the Seventh Circuit affirmed the district court's dismissal of the unjust enrichment claim and the summary judgment ruling on the Restrictive Covenant Agreements. However, it was uncertain about the enforceability of the RSU Agreements' forfeiture-for-competition provisions under Delaware law, especially after the Delaware Supreme Court reversed the Court of Chancery's decision in Cantor Fitzgerald. The Seventh Circuit certified two questions to the Delaware Supreme Court regarding the applicability of Cantor Fitzgerald outside the limited partnership context.The Delaware Supreme Court held that the principles from Cantor Fitzgerald, which endorse the employee choice doctrine and prioritize freedom of contract, apply beyond the limited partnership context, including to RSU agreements. The court emphasized that forfeiture-for-competition provisions do not restrict competition or an employee's ability to work and should be treated as enforceable terms subject to ordinary breach of contract defenses. View "LKQ Corp. v. Rutledge" on Justia Law

In the early morning of June 22, 2022, Luis Coello called 911 after a vehicle crash. When officers arrived, they found Coello in pain and lying on the ground. Officer Miller asked Coello to sit down for medical reasons and requested his license as part of the accident investigation. Coello, still in pain, began to walk away, prompting Miller to ask him to stay. Officers Braun and Strickland arrived and questioned Coello, who indicated he only spoke Spanish. Coello admitted to driving the vehicle involved in the crash. He was not arrested at the scene but was later indicted on charges of Vehicular Homicide, Vehicular Assault, and Unreasonable Speed.The Superior Court of Delaware denied Coello's motion to suppress his statements made at the crash scene, ruling that he was not in custody for Miranda purposes and thus not entitled to Miranda warnings. The court found that the questioning was part of a routine, on-scene investigation and that Coello's statements were voluntary. Coello was subsequently convicted of all charges.On appeal, Coello argued that his statements should have been suppressed as they were obtained in violation of the Fifth Amendment and the Delaware Constitution. The Supreme Court of Delaware reviewed the case and held that Coello was not in Miranda custody during the on-scene questioning. The court emphasized that the questioning was part of a routine investigation and that Coello was not physically restrained or arrested at the scene. Therefore, the court affirmed the Superior Court's decision to deny the motion to suppress and upheld Coello's conviction. View "Coello v. State" on Justia Law

The case involves Sunder Energy, LLC (Sunder), a solar sales dealer, and its former employee, Tyler Jackson, along with several other defendants. Sunder sought to enforce restrictive covenants against Jackson, who had joined a competitor, Solar Pros LLC, and allegedly recruited Sunder employees to the new company. The restrictive covenants were part of Sunder's operating agreement, which Jackson signed without negotiation or full understanding of its terms.The Court of Chancery of the State of Delaware denied Sunder's motion for a preliminary injunction to enforce the restrictive covenants. The court found the covenants unenforceable for two reasons: they originated from an egregious breach of fiduciary duty by Sunder's principals, and they were facially unreasonable. The court also declined to "blue pencil" the covenants to make them reasonable, citing the overbroad and oppressive nature of the restrictions. Additionally, the court ruled that Utah law governed Sunder's tortious interference claim against Jackson's new employers, which effectively dismissed that claim under Utah law.The Supreme Court of the State of Delaware reviewed the case and affirmed the Court of Chancery's decision in part and reversed it in part. The Supreme Court agreed that the Court of Chancery did not abuse its discretion in refusing to blue pencil the restrictive covenants, given the lack of negotiation, minimal consideration, and the overbroad nature of the covenants. The Supreme Court also upheld the application of Utah law to the tortious interference claim. However, the Supreme Court reversed the Court of Chancery's ruling that the operating agreement was unenforceable as a matter of law, stating that such a determination exceeded the scope of the preliminary injunction stage and should await a complete factual record. View "Sunder Energy, LLC v. Jackson" on Justia Law