Justia Delaware Supreme Court Opinion Summaries

Appellant Ricardo Castro appealed his convictions on two counts of Drug Dealing and two counts of Conspiracy in the Second Degree. On appeal, he argued: (1) the Superior Court erred by denying his motion for judgment of acquittal on the two Drug Dealing convictions; (2) the Superior Court erred by denying his motion for judgment of acquittal on the two Conspiracy convictions; and (3) the Superior Court erred in not granting his pre-trial motion to suppress wiretap evidence. Finding no reversible error, the Delaware Supreme Court affirmed appellant's convictions. View "Castro v. Delaware" on Justia Law

OptiNose AS and OptiNose, Inc. (collectively, OptiNose) agreed to license its Exhalation Delivery Systems (“EDS”) technology to Currax Pharmaceuticals, LLC. The parties limited the License Agreement to a product which used a powder EDS device to deliver the migraine treatment drug sumatriptan into the nasal cavity. The product covered by the license, a powder EDS device and sumatriptan together, was trade-named ONZETRA(R) XSAIL(R). Currax had a limited right to sell the sumatriptan powder EDS device (the “Product”) in Canada, the United States, and Mexico. OptiNose retained the right to sell EDS devices: (1) with powders and liquids other than sumatriptan around the world; and (2) EDS devices with sumatriptan in every area other than those three countries. OptiNose also gave Currax the “first right” to “prosecute and maintain” certain patents related to the Product, listed in the License Agreement as the Product Patents. During Currax’s prosecution of the ’009 Patent Application, the U.S. Patent and Trademark Office (“USPTO”) rejected claims because they were not “patentably distinct” from the claims in another Product Patent. To overcome the patent office rejection, Currax needed to file a terminal disclaimer over the issued Product Patent. Currax needed a power of attorney from OptiNose to file a terminal disclaimer. OptiNose refused to provide it. Currax filed suit against OptiNose in the Court of Chancery, seeking an order of specific performance requiring OptiNose to grant it a power of attorney. OptiNose counterclaimed for a declaration that the License Agreement did not require it to provide a power of attorney. According to OptiNose, Currax’s right to prosecute Product Patents did not include a power of attorney, and, in any event, Currax could not file a terminal disclaimer without OptiNose’s advance approval, which it had not given. The Court of Chancery granted Currax’s motion for judgment on the pleadings, finding the License Agreement OptiNose to provide a power of attorney to prosecute the ’009 Application. On appeal, the parties focused primarily on OptiNose’s advance approval right, and whether a terminal disclaimer “relate[s] to or characterize[s] the Device component of the Patent or other OptiNose intellectual property.” The Delaware Supreme Court affirmed the Court of Chancery’s judgment that filing a terminal disclaimer in the ’009 Application prosecution was included in the rights OptiNose gave to Currax under the License Agreement. View "Optinose AS v. Currax Pharmaceuticals, LLC" on Justia Law

A father appealed a Family Court order denying a Petition for Parental Visitation. Father Bryce Wilcox had been imprisoned since his son (“C.R.”) was two. C.R.’s mother, Marissa LaClaire (“Mother”) did not permit telephone contact between Father and C.R., and has withheld all letters Father has sent C.R. In denying Father’s Visitation Petition, the Family Court declined to order any change in this status quo, and ordered Mother to keep letters Father sent to C.R. should C.R. ever desire to read them. The Family Court justified the rejection of his petition based on the lack of relationship between Father and C.R. and Mother’s testimony that Father’s contact with C.R. would impair C.R.’s emotional development. On appeal, father argued: (1) the Family Court erred when it denied his request for contact with his son by telephone and mail because there was insufficient evidence that such contact would significantly impair C.R.’s emotional development; and (2) the Family Court erred when it justified that denial based upon a lack of relationship between Father and C.R. when that lack of relationship was a result of Mother and the Family Court not permitting Father to have contact with his son since August 2015. The Delaware Supreme Court determined Father's arguments had merit: (1) Mother did not argue Father’s requested contact by telephone and mail would place C.R. in any physical danger, and the only support in the record for impairment to C.R.’s emotional development was Mother’s speculative lay opinion; and (2) the Family Court’s decision overlooked the Supreme Court's prior opinion involving these same parties wherein the Court addressed Mother’s successful effort to block contact with Father. As a result, the Family Court’s decision lacked substantial evidence in the record to support it, was not the product of an orderly and logical process, and was thus reversed. View "Wilcox v. LaClaire" on Justia Law

On April 5, 2021, Michael Capriglione was elected to a two-year term as a Commissioner of the Town of Newport. On the eve of his swearing-in ceremony, the Attorney General, on behalf of the State of Delaware, petitioned for a writ of quo warranto contending that Capriglione was prohibited from serving as a Commissioner because he had been convicted of misdemeanor official misconduct for actions he took as Newport’s police chief in 2018. That offense, the State argued, was a disqualifying “infamous crime” under Art. II, sec. 21 of the Delaware Constitution. The Superior Court stayed Capriglione’s swearing in to resolve this question and eventually held that he was constitutionally barred from holding public office. The Delaware Supreme Court considered Capriglione’s appeal on an expedited basis, hearing oral argument on July 14, 2021. On July 16, the Supreme Court issued an order reversing the Superior Court and allowing Capriglione to take the oath of office. In this opinion, the Court explained its reasons for doing so: under Section 21, only felonies can be disqualifying “infamous” crimes. View "Capriglione v. Delaware, et al." on Justia Law

Defendant-appellant Corey Patrick was convicted by jury for multiple drug and weapons offenses. On appeal, Patrick challenged : (1) the trial court’s decision to permit law enforcement witnesses to testify about the lengthy drug investigation leading to his arrest; (2) one of his convictions for possession of a deadly weapon by a person prohibited, arguing there was insufficient evidence to sustain a conviction for the simultaneous possession of a firearm and a controlled substance because the State failed to satisfy the “possession” element; and (3) the second of his weapons charges should have been vacated as duplicative of his other conviction under Count Two of the Indictment for possession of a deadly weapon by a person prohibited (weapon and prior felony conviction). After review, the Delaware Supreme Court affirmed Patrick’s convictions except for his conviction under Count Four of the October 7, 2019 Indictment (weapon and drugs together). The Count Four conviction duplicated his conviction under Count Two (weapon and prior felony conviction) and violated the constitutional prohibition against Double Jeopardy. Thus, judgment was reversed and remanded to the Superior Court to vacate his conviction and sentence under Count Four of the October 7, 2019 Indictment. View "Patrick v. Delaware" on Justia Law

In 2016, the board of directors of Facebook, Inc. (“Facebook”) voted in favor of a stock reclassification that would allow Mark Zuckerberg, Facebook’s controller, chairman, and chief executive officer, to sell most of his Facebook stock while maintaining voting control of the company. Zuckerberg proposed the Reclassification to allow him and his wife to fulfill a pledge to donate most of their wealth to philanthropic causes. With Zuckerberg casting the deciding votes, Facebook’s stockholders approved the Reclassification. Not long after, numerous stockholders filed lawsuits in the Delaware Court of Chancery, alleging that Facebook’s board of directors violated their fiduciary duties by negotiating and approving a purportedly one-sided deal that put Zuckerberg’s interests ahead of the company’s interests. The trial court consolidated more than a dozen of these lawsuits into a single class action. At Zuckerberg’s request and shortly before trial, Facebook withdrew the Reclassification and mooted the fiduciary-duty class action. Facebook spent more than $20 million defending against the class action and paid plaintiffs’ counsel more than $68 million in attorneys’ fees under the corporate benefit doctrine. Following the settlement, another Facebook stockholder, the United Food and Commercial Workers Union and Participating Food Industry Employers Tri-State Pension Fund (“Tri-State”), filed a derivative complaint, rehashing many of the allegations made in the prior class action but sought compensation for the money Facebook spent in connection with the prior class action. Tri-State pleaded that making a demand on Facebook's board was futile because the board’s negotiation and approval of the Reclassification was not a valid exercise of its business judgment and because a majority of the directors were beholden to Zuckerberg. Facebook and the other defendants moved to dismiss Tri-State’s complaint arguing Tri-State did not make demand or prove that demand was futile. The Court of Chancery dismissed Tri-State's complaint under Rule 23.1. Finding no reversible error in that judgment, the Delaware Supreme Court affirmed dismissal. View "United Food and Commercial Workers Union v. Zuckerberg, et al." on Justia Law

The issue presented from this interlocutory appeal of a Court of Chancery order holding that Appellees/Cross-Appellants, former stockholders of TerraForm Power, Inc. (“TerraForm”), had direct standing to challenge TerraForm’s 2018 private placement of common stock to Appellant/Cross-Appellees Brookfield Asset Management, Inc. and its affiliates, a controlling stockholder, for allegedly inadequate consideration. The trial court held that Plaintiffs did not state direct claims under Tooley v. Donaldson, Lufkin & Jennette, Inc., but did state direct claims predicated on a factual paradigm “strikingly similar” to that of Gentile v. Rossette, and that Gentile was controlling here. Appellants contended Gentile was inconsistent with Tooley, and that the Delaware Supreme Court’s decision in Gentile created confusion in the law and therefore ought to be overruled. Having engaged in a "full and fair presentation and searching inquiry has been made of the justifications for such judicial action," the Supreme Court overruled Gentile. Accordingly, the Court of Chancery's decision was reversed, but not because the Court of Chancery erred, but rather, because the Vice Chancellor correctly applied the law as it existed, recognizing that the claims were exclusively derivative under Tooley, and that he was bound by Gentile. View "Brookfield Asset Management, Inc., v. Rosson" on Justia Law

In 2017, a third-party entity acquired Authentix Acquisition Company, Inc. (“Authentix”). The cash from the merger was distributed to the stockholders pursuant to a waterfall provision. The Authentix common stockholders received little to no consideration. A group of common stockholders filed a petition for appraisal to the Court of Chancery under Section 262 of the Delaware General Corporation Law (“DGCL”). Authentix moved to dismiss the petition, arguing that the petitioners had waived their appraisal rights under a stockholders agreement that bound the corporation and all of its stockholders. The Court of Chancery granted the motion to dismiss, holding that the petitioners had agreed to a clear provision requiring that they “refrain” from exercising their appraisal rights with respect to the merger. The court awarded the petitioners equitable interest on the merger consideration and declined to award Authentix pre-judgment interest under a fee-shifting provision. All parties appealed the Court of Chancery’s decisions. Pointing to Delaware’s "strong policy favoring private ordering," Authentix argued stockholders were free to set the terms that will govern their corporation so long as such alteration was not prohibited by statute or otherwise contrary to Delaware law. Authentix contended a waiver of the right to seek appraisal was not prohibited by the DGCL, and was not otherwise contrary to Delaware Law. "As a matter of public policy, there are certain fundamental features of a corporation that are essential to that entity’s identity and cannot be waived." Nonetheless, the Delaware Supreme Court determined the individual right of a stockholder to seek a judicial appraisal was not among those fundamental features that could not be waived. Accordingly, the Court held that Section 262 did not prohibit sophisticated and informed stockholders, who were represented by counsel and had bargaining power, from voluntarily agreeing to waive their appraisal rights in exchange for valuable consideration. Further, the Court found the Court of Chancery did not abuse its discretion by awarding the petitioners equitable interest on the merger consideration; nor did the court abuse its discretion by declining to award Authentix pre-judgment interest under a fee-shifting provision. Accordingly, the Court of Chancery’s judgment was affirmed. View "Manti Holdings, LLC et al. v. Authentix Acquisition Company, Inc." on Justia Law

Heather Juliano was a passenger was passenger in an SUV that was stopped because of a suspected seat-belt violation. One of the investigating officers detected an odor of marijuana coming from the vehicle. Based on that odor alone, the occupants of the vehicle, including Juliano, were immediately ordered out of the vehicle and placed under arrest. The police searched Juliano at the scene and then transported her to their station where they told her that they intended to perform a strip search, prompting Juliano to admit that she had concealed contraband— marijuana and cocaine—in her pants. Juliano was then escorted to another room where she retrieved and handed over the drugs. Juliano was then charged with several drug offenses. Juliano moved to suppress the drugs that the police seized from her, claiming, among other things, that her arrest and the ensuing searches were not supported by probable cause. The State responded that the odor of marijuana emanating from the area of the vehicle where Juliano was seated and on her person provided probable cause for Juliano’s arrest. And, the State argued, because the arrest was lawful, the searches of Juliano at the scene and at the station were incident to her arrest and hence lawful. In two separate orders, one following the suppression hearing and the other on remand by the Delaware Supreme Court of that first order, the Family Court agreed with the State and denied Juliano’s motion. On appeal, Juliano contended that, although the odor of marijuana could support the extension of a traffic stop or serve as a factor contributing to probable cause to search a person or vehicle, it did not, standing alone, authorize a full custodial arrest. The Supreme Court found that under the totality of the circumstances presented by the State in this case, including the vagueness of the officers’ description of the marijuana odor, the timing of their detection of that odor, and the absence of any other observations indicative of criminality, Juliano’s arrest was unreasonable and therefore violated the Fourth Amendment of the United States Constitution and Article I, Section 6 of the Delaware Constitution. "It follows that the evidence obtained following Juliano’s unlawful arrest should have been suppressed as fruit of the poisonous tree. This being so, we reverse." View "Juliano v. Delaware" on Justia Law

Diamonte Taylor was convicted by jury for gang-related murder and violent felonies. On direct appeal, Taylor claimed the superior court should have suppressed evidence from his smartphones collected under an unconstitutional search warrant. After review, the Delaware Supreme Court determined that unlimited in time and scope, the general warrant to search Taylor’s smartphones violated Taylor’s rights under the Fourth Amendment to the United States Constitution, Article I, Section 6 of the Delaware Constitution, and the particularity requirement under Delaware statutory law. The evidence should have been suppressed and the error was not harmless. The Court therefore reversed his convictions and remanded to the superior court for a new trial without the taint of the improperly seized evidence. View "Taylor v. Delaware" on Justia Law