Justia Delaware Supreme Court Opinion Summaries

Appellant Delaware Department of Natural Resources and Environmental Control (“DNREC”), challenged the Superior Court’s holding that Appellee Food & Water Watch (“Watch”), had organizational standing to contest Order No. 2016-W-0008 (the “Secretary’s Order”), which established a system to regulate pollutants from Concentrated Animal Feeding Operations (“Feeding Operations”). Specifically, DNREC argued Watch did not have organizational standing to challenge the Secretary’s Order because its representatives could not adequately establish injury in fact, causation, and redressability. Watch responded that this action was moot: since DNREC ultimately won on the merits and neither party appealed the merits decision, the issue of standing was no longer justiciable because the action was not adversarial. Further, even if this action was not moot, Watch argued that it had standing. Having reviewed the briefs, the supplemental memoranda, and the record on appeal, the Delaware Supreme Court dismissed this appeal for lack of standing to appeal. DNREC was the prevailing party below; the Superior Court granted DNREC all of the relief it requested; and the Superior Court’s standing decision did not meet the criteria for a collateral adverse ruling. Accordingly, the standing decision did not render DNREC an aggrieved party, and DNREC does not have standing to appeal. View "DNREC v. Food & Water Watch" on Justia Law

In 2014, appellant-cross-appellee LCT Capital, LLC (“LCT”) helped appellee- cross-appellants NGL Energy Partners, LP and NGL Energy Holdings LLC (collectively, “NGL”) acquire TransMontaigne, a refined petroleum products distributor. LCT played a valuable role in the transaction: bringing the sale to NGL’s attention, helping NGL to understand opaque but profitable aspects of TransMontaigne’s business, and enabling NGL to submit its winning bid outside of an auction process. The transaction generated $500 million in value for NGL, more than double the $200 million price that NGL paid to acquire TransMontaigne. LCT’s CEO Mike Krimbill represented on several occasions that LCT would receive an unusually large investment banking fee, but the parties failed to reach an agreement on all of the material terms. After negotiations broke down completely, LCT filed suit seeking compensation for its work under several theories, including quantum meruit and common law fraud. The jury verdict sheet had two separate lines for damages awards: one for the quantum meruit claim and another for the fraud claim. The jury found NGL liable for both counts, awarded LCT an amount of quantum meruit damages equal to a standard investment banking fee, and awarded LCT a much larger amount of fraud damages approximately equal to the unusually large fee that Krimbill proposed. The Superior Court set aside the jury's awards and ordered a new trial on damages. The court set aside the fraud award on the basis that the jury impermissibly awarded LCT benefit-of-the-bargain damages in the absence of an enforceable contract. The court set aside the quantum meruit award on the basis that providing the jury with multiple damages lines for a unitary theory of damages was confusing and may have caused the jury to spread a single award between the quantum meruit and fraud claims. Both sides appealed. The Delaware Supreme Court found LCT was not entitled to benefit-of-the-bargain damages, and that the Superior Court did not abuse its discretion by ordering a new trial on quantum meruit damages. Nonetheless, the Supreme Court also held the Superior Court abused its discretion by ordering a new trial on fraud damages because LCT did not assert any independent damages to support its fraud claim. Accordingly, the Court affirmed in part and reversed in part the Superior Court’s judgment. View "LCT Capital, LLC v. NGL Energy Partners LP" on Justia Law

After Harold Daniels pled guilty to driving under the influence of alcohol, the Superior Court sentenced him to a mandatory term of imprisonment as a third-time offender. The court based its finding that Daniels had committed two prior offenses, in part on its determination that Daniels had been convicted in New Jersey in 2012 under a statute that was “similar” to Delaware’s driving-under-the-influence statute. On appeal to the Delaware Supreme Court, Daniels argued that, because the New Jersey statute under which he was convicted prohibited conduct that was not against the law in Delaware — permitting another person to operate a vehicle while under the influence — the Superior Court erred by counting the New Jersey conviction against him. To this, the Supreme Court agreed with Daniels and vacated his sentence. View "Daniels v. Delaware" on Justia Law

William Fletcher, Jr. challenged a Family Court denial of his petition to modify or terminate alimony payments to his ex-wife, Melissa Feutz. Fletcher argued the Family Court erred by ruling that: (1) Feutz was appropriately employed; (2) there was not a substantial change in circumstances that warranted the termination or modification of alimony; (3) Feutz was not cohabitating with her paramour; and (4) Feutz was entitled to the attorney’s fees awarded. After review, the Delaware Supreme Court held the Family Court did not err in finding that Feutz was properly employed and that she was not cohabitating with her paramour. The Court remanded the issue of whether there was a substantial change in circumstances. In addition, the Court found the Family Court erredin awarding Feutz attorney’s fees for the defense of Fletcher’s Motion to Modify or Terminate Alimony. View "Fletcher v. Feutz" on Justia Law

After a $3.3 billion “roll up” of minority-held units involving a merger between Enbridge, Inc. and Spectra Energy Partners L.P. (“SEP”), Paul Morris, a former SEP minority unitholder, lost standing to litigate an alleged $661 million derivative suit on behalf of SEP against its general partner, Spectra Energy Partners (DE) GP, LP (“SEP GP”). Morris repeated the derivative claim dismissal by filing a new class action complaint that alleged the Enbridge/SEP merger exchange ratio was unfair because SEP GP agreed to a merger that did not reflect the material value of his derivative claims. The Court of Chancery granted SEP GP’s motion to dismiss the new complaint for lack of standing. The court held that, to have standing to bring a post-merger claim, Morris had to allege a viable and material derivative claim that the buyer would not assert and provided no value for in the merger. Focusing on the materiality requirement, the court first discounted the $661 million recovery to $112 million to reflect the public unitholders’ beneficial interest in the derivative litigation recovery. The court then discounted the $112 million further to $28 million to reflect what the court estimated was a one in four chance of success in the litigation. After the discounting, the $28 million, less than 1% of the merger consideration, was immaterial to a $3.3 billion merger. On appeal, Morris argued the trial court should not have dismissed the plaintiff’s direct claims for lack of standing. After its review, the Delaware Supreme Court agreed with Morris finding that, on a motion to dismiss for lack of standing, he sufficiently pled a direct claim attacking the fairness of the merger itself for SEP GP’s failure to secure value for his pending derivative claims. The Court of Chancery’s judgment was reversed and the matter remanded for further proceedings. View "Morris v. Spectra Energy Partners" on Justia Law

Dai'yann Wharton was found guilty after a bench trial on several charges, led by a count of first-degree murder for the death of Yaseem Powell. Wharton appealed, contending her conviction should have been reversed because the State identified a group of highly incriminating text messages less than two weeks prior to trial, though the messages themselves had been contained in a digital discovery disclosure made by the State to Wharton more than a year earlier. Because of the State’s earlier disclosure, and because the Delaware Supreme Court rejected Wharton’s assertions that the State engaged in any discovery violations or other misconduct, it held the superior court was within its discretion to deny Wharton’s motion to exclude the text messages. Accordingly, Wharton's conviction and judgment of sentence were affirmed. View "Wharton v. Delaware" on Justia Law

Appellant Alex Bäcker was the co-founder and majority common stockholder of QLess, Inc. In June 2019, the Company’s board removed Alex as CEO following an internal investigation into workplace complaints. Alex eventually relented to the change and expressed support for his successor, Kevin Grauman. In the week leading up to the November 15, 2019 board meeting, the Company’s outside counsel circulated board resolutions that, among other things, would appoint Grauman to the board. Alex made a series of statements that collectively represented support for Grauman’s appointment. On the eve of the board meeting, the Company’s independent director unexpectedly resigned, giving Alex a board majority. Alex leapt into action, devising a secret counter agenda to fire Grauman and lock-in Alex’s control of the Company. Alex caught his fellow directors by surprise at the meeting, passing his counter agenda over objections and seizing control of the Company. Palisades Growth Capital II, L.P., the majority owner of the Company’s Series A preferred stock, filed a complaint in the Court of Chancery seeking to reverse Alex’s actions. Following a paper trial, the court held that, even if technically legal, the board’s actions were invalid as a matter of equity because Alex affirmatively deceived a fellow director to establish a quorum. After review of the parties briefs and the record on appeal, the Delaware Supreme Court held the Court of Chancery's finding of affirmative deception was not clearly erroneous. The Supreme Court also held that the Court of Chancery did not impose an equitable notice requirement for regular board meetings, that Appellants failed to properly raise an equitable participation defense below, and that the Court of Chancery did not exercise its equitable powers to grant relief for a de facto breach of contract claim. Accordingly, the Supreme Court affirmed the Court of Chancery’s March 26, 2020 Memorandum Opinion. View "Backer v. Palisades Growth Capital" on Justia Law

Plaintiffs-Appellants worked on banana plantations in Costa Rica, Ecuador, and Panama. They sued the plantations in Delaware in 2012, claiming that while working on the plantations they suffered personal injuries from a pesticide known as 1, 2, Dibromo 3, Chloropropane (“DBCP”). Defendants-Appellees were numerous companies alleged to have caused the Plaintiffs’ exposure to DBCP and their resulting injuries. In 2013 the Superior Court dismissed the Plaintiffs’ complaint under what was sometimes referred to as Delaware’s McWane doctrine (the “Dismissal Order”). On December 31, 2018 Plaintiffs moved to vacate the Dismissal Order under Superior Court Civil Rule 60(b)(6). The Superior Court denied the Plaintiffs’ motion, finding that the motion was untimely and Plaintiffs failed to show extraordinary circumstances for vacating the judgment. Plaintiffs have appealed that order to the Delaware Supreme Court. Finding no reversible error, however, the Supreme Court affirmed the district court. View "Chaverri et al. v. Dole Food Company, et al." on Justia Law

As Delaware State Police (“DSP”) Trooper Brian Holl was on patrol in Kent County, he received a call from DSP Detective Thomas Macauley, a member of a “drug task force” in New Castle County. Detective Macauley’s and his brother Detective Michael Macauley’s were involved in a wiretap investigation known as “Operation Cutthroat.” Detective Thomas Macauley told Trooper Holl that the task force had been surveilling a blue Mazda that was, at the time of the call, southbound on Delaware State Route 1 heading towards Kent County. Detective Macauley shared with Detective Holl the reason for the surveillance of the Mazda: the surveilling officers had just “watched a drug transaction” between the occupants of the car and one of Operation Cutthroat’s targets. Because the Macauleys wished to maintain the secrecy of the ongoing wiretap investigation, they enlisted Trooper Holl’s assistance in the apprehension of the blue Mazda’s occupants. Detective Macauley’s instructions to Trooper Holl were: "To keep the integrity of the investigation of the wiretap investigation, I need a traffic stop. That means you need to . . . develop your own probable cause and go from there. Nothing about the wiretap can be revealed, obviously, for the integrity of the investigation." Trooper Holl believed he found one: according to his Affidavit of Probable Cause, the Mazda’s headlights were not activated despite “inclement weather.” Because of the perceived headlight infraction, Trooper Holl initiated a motor vehicle stop by activating his emergency lights. The stop lead to defendant Thomas Gordon's arrest, ultimately on drug trafficking-related charges. The issues this case presented for the Delaware Supreme Court's review centered on the "collective knowledge" doctrine, and whether the trial court’s consideration of the lawfulness of a warrantless detention and arrest was constrained by the facts alleged in a later filed arrest-warrant affidavit. The Supreme Court held that the trial court applied the correct legal standard when it determined that based on the collective knowledge of the officers involved, Trooper Holl had a reasonable suspicion the car in which defendant was traveling contained contraband, and was therefore subject to detention. In making this determination, the court did not err by considering facts extraneous to the subsequently filed arrest-warrant affidavit. View "Gordon v. Delaware" on Justia Law

The trustees of the Delaware Lawyers’ Fund for Client Protection (the “LFCP”) requested an advisory opinion from the Delaware Supreme Court regarding whether the trustees had discretion to consider paying claims involving misconduct by attorneys who were not members of the Delaware bar, but who were admitted pro hac vice or who had in the past received limited permission to practice. The question arose from the language of Supreme Court Rule 66(a)(ii), which stated that the purpose of the trust fund was to address “losses caused to the public by defalcations of members of the Bar;” subsections 1 and 2 of Rule 4(1) of the LFCP Rules, which provide that the Trustees will consider for reimbursement from the fund certain claims involving “a member of the Delaware Bar;” and subsection 3 of Rule 4(1) of the LFCP Rules, which provides that the trustees will consider for reimbursement certain claims involving a “member of the Bar.” The Supreme Court held that the trustees’ discretion was not limited to paying claims for reimbursement involving an attorney who was a member of the Delaware bar at the time of the defalcation that gave rise to the claim. View "IN RE: Request of the Trustees of the Lawyers' Fund for Client Protection for an Advisory Opinion" on Justia Law