Justia Delaware Supreme Court Opinion Summaries

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

Prior to sentencing, defendant Jerry Reed sought to withdraw his guilty plea, but his counsel refused to file a motion to do so, apparently under the belief that no grounds justifying a plea withdrawal were present. The Superior Court refused to consider his pro se motion because he was represented by counsel. As Reed put it, he became stuck in a Catch-22 due to the operation of two Superior Court Criminal Rules. The Delaware Supreme Court held that a criminal defendant’s control of the objectives of the representation prior to sentencing required counsel either obey an instruction to file a motion to withdraw a guilty plea, or seek leave to withdraw so that the defendant could file the motion with other counsel or pro se. Because the factual record in this case was incomplete, and because some of the Superior Court’s factual findings were not supported by the record, the Supreme Court reversed and remanded for additional fact-finding necessary to determine whether Reed’s claims for ineffective assistance of counsel had merit. View "Reed v. Delaware" on Justia Law

In 2019, Jason White was convicted of eight crimes related to possessing and dealing narcotics. White filed a timely direct appeal, arguing that the Superior Court abused its discretion by allowing the State to admit text messages without proper authentication, and that the prosecutor made improper comments during his rebuttal summation by misstating the burden of proof, denigrating the role of defense counsel, and vouching for evidence. Having reviewed the parties’ briefs and record on appeal, and after oral argument, the Delaware Supreme Court affirmed the Superior Court’s judgment: the State provided sufficient evidence to authenticate the text messages, and the prosecutor did not make improper remarks warranting reversal during his rebuttal summation. View "White v. Delaware" on Justia Law

Appellant Joseph Hurley represented Clay Conaway, a former college athlete charged with raping six women. After the case attracted media attention, the Superior Court entered an order prohibiting counsel from making public comments except to the extent permitted under Rule 3.6 of the Delaware Lawyers Rules of Professional Conduct (“DLRPC”). Hurley twice spoke to reporters while the order was in force. The court held that both sets of comments violated the order and found Hurley in civil contempt of court. On appeal, Hurley argued the Superior Court erred by holding that there was a substantial likelihood his comments would materially prejudice pending proceedings. Finding no reversible error, the Delaware Supreme Court upheld the contempt order. View "In re Joseph Hurley, Esq." on Justia Law

Appellant Kili Mayfield was convicted at a bench trial of Rape in the First Degree (two counts), Rape in the Second Degree (four counts), Kidnapping in the First Degree (one count), Strangulation (one count), and Assault in the Third Degree (one count). In pre-trial proceedings, he was initially represented by counsel from the Public Defender Division of the Office of Defense Services. Several months before trial Mayfield filed a motion indicating he wished to waive his right to counsel and proceed pro se. The Superior Court held a hearing and granted the motion. On appeal, Mayfield did not dispute that the Superior Court committed no error in granting his motion to waive counsel and proceed pro se. At a conference held the day before his scheduled trial date, however, Mayfield informed the trial judge for the first time that he had decided that representing himself was not in his best interest. He requested time to retain private counsel. In the alternative, he requested that the Public Defender’s Office be reappointed to represent him at trial. After fully considering Mayfield’s requests, the judge determined that granting either request would necessitate a trial delay. He also determined that the trial should go forward as scheduled the next day, that the continuance that either of Mayfield’s requests would entail should be denied, and that his request for counsel should, therefore, be denied. The trial did commence the next day, with Mayfield representing himself. Mayfield claimed on appeal the trial judge’s denial of his request for reappointment of the Public Defender’s Office to represent him at trial violated his Sixth Amendment right to assistance of counsel. Finding no reversible error, the Delaware Supreme Court rejected Mayfield’s claim and affirmed the Superior Court judgment. View "Mayfield v. Delaware" on Justia Law

Murad Diggs was convicted of possession of a firearm and ammunition by a person prohibited. In his direct appeal to the Delaware Supreme Court, Diggs claimed the Superior Court erred when it denied his motion to suppress the evidence seized from him - the firearm and ammunition - following an investigative detention and frisk that was, in Diggs’s view, unsupported by reasonable suspicion. More specifically, Diggs challenged the court’s conclusion that the tip upon which the police were acting came from a “citizen informant” and therefore was presumptively reliable. Diggs also contended the Superior Court’s suppression-hearing factual determinations were flawed because the court failed to draw a “lost and/or missing evidence” inference as a result of the police’s failure to collect and preserve certain evidence. Although the Supreme Court agreed, in part, with Diggs’s criticism of the Superior Court’s “citizen-informant” analysis, it disagreed with his conclusion that his seizure was not supported by sufficient reasonable suspicion. Likewise, the Court rejected Diggs’s contention that the Superior Court’s failure to draw an adverse inference against the prosecution - an inference that Diggs did not urge the court to draw at trial - was plainly erroneous. Hence, the Court affirmed the Superior Court judgment. View "Diggs v. Delaware" on Justia Law

Appellant Laura Allen appealed a Family Court Ancillary Order determining the division of property following her divorce from Appellee Charlene Scott. Allen claimed the trial court abused its discretion in designating funds used to purchase real property in Colorado as “marital” because the parties’ Ancillary Pretrial Stipulation described the funds as “premarital.” Allen further contended the Family Court abused its discretion in dividing certain pieces of marital property in the marital estate 60/40 in Scott’s favor contending that the court’s decision was not based on a logical or orderly process and was tainted by the court’s error on the first issue. After review, the Delaware Supreme Court held: (1) because both parties stated in the Ancillary Pretrial Stipulation that the funds used to purchase the Colorado property were premarital in character, and because neither party moved to amend the stipulation to revise that characterization until after the evidentiary record had closed, there was no triable issue on that question; and (2) there was no abuse of discretion in the Family Court’s distribution of the remaining marital property. Judgment was reversed and the matter remanded for consideration of Scott’s alternative contention that the down payment for the Colorado property was a gift unto the marriage. The Family Court retains the discretion to adjust that distribution to the extent its decision on remand regarding the Colorado down payment funds affects the other 11 Del. C. 1315 factors. View "Allen v. Scott" on Justia Law