Justia Delaware Supreme Court Opinion Summaries

The Court of Chancery found that the fair value of Aruba Networks, Inc., as defined by 8 Del. C. 262, was $17.13 per share, which was the thirty-day average market price at which its shares traded before the media reported news of the transaction that gave rise to the appellants’ appraisal rights. The issue this case presented for the Delaware Supreme Court's review centered on whether the Court of Chancery abused its discretion in arriving at Aruba’s thirty-day average unaffected market price as the fair value of the appellants’ shares. Because the Court of Chancery’s decision to use Aruba’s stock price instead of the deal price minus synergies was rooted in an erroneous factual finding that lacked record support, the Supreme Court answered that in the positive and reversed the Court of Chancery’s judgment. On remand, the Court of Chancery was directed to enter a final judgment for petitioners, awarding them $19.10 per share, which reflected the deal price minus the portion of synergies left with the seller as estimated by the respondent in this case, Aruba. View "Verition Partners Master Fund Ltd., et al. v. Aruba Networks, Inc." on Justia Law

In 2015, Jacquez Robinson was indicted for his alleged involvement in separate shootings on November 25 and 26, 2014, which left two people injured and one person dead. The issue his appeal presented for the Delaware Supreme Court's review centered on whether the State violated Robinson’s Sixth Amendment right to the effective assistance of counsel, and if yes, whether the trial court erred in dismissing his indictment for first degree murder. The Supreme Court affirmed the trial court’s conclusion that the State violated Robinson’s Sixth Amendment right to counsel as a result of its wrongful and unjustified intrusion into his attorney-client privileged materials. "But based upon our assessment of the record, and on our interpretation of 'Morrison’s' requirement that the remedy must be tailored to the harm, we reverse the Superior Court’s dismissal of the indictment. Although the Superior Court has discretion to sanction litigants, it failed to tailor its remedy to the violation and actual prejudice that it found." The trial court’s dismissal of the indictment failed to adequately "preserv[e] society’s interest in the administration of criminal justice." The matter was remanded for further proceedings. View "Delaware v. Robinson" on Justia Law

Nicholas Olenik, a stockholder of nominal defendant Earthstone Energy, Inc., brought class and derivative claims against defendants, challenging a business combination between Earthstone and Bold Energy III LLC. As alleged in the complaint, EnCap Investments L.P. controlled Earthstone and Bold and caused Earthstone stockholders to approve an unfair transaction based on a misleading proxy statement. Defendants moved to dismiss the complaint, claiming the proxy statement disclosed fully and fairly all material facts about the transaction, and Earthstone conditioned its offer on the approval of a special committee and the vote of a majority of the minority stockholders. The Court of Chancery agreed with the defendants and dismissed the case. While the parties briefed this appeal, the Delaware Supreme Court decided Flood v. Synutra International, Inc. Under Synutra, to invoke the MFW protections in a controller-led transaction, the controller must “self-disable before the start of substantive economic negotiations.” The controller and the board’s special committee must also “bargain under the pressures exerted on both of them by these protections.” The Court cautioned that the MFW protections would not result in dismissal when the “plaintiff has pled facts that support a reasonable inference that the two procedural protections were not put in place early and before substantive economic negotiations took place.” So the Supreme Court determined the Court of Chancery held correctly plaintiff failed to state a disclosure claim. But, the complaint should not have been dismissed in its entirety: applying Synutra, which the Court of Chancery did not have the benefit of at the time of its decision, plaintiff pled facts supporting a reasonable inference that EnCap, Earthstone, and Bold engaged in substantive economic negotiations before the Earthstone special committee put in place the MFW conditions. The Court of Chancery’s decision was affirmed in part and reversed in part, and the case remanded for further proceedings. View "Olenik v. Lodzinski, et al." on Justia Law

The issue this medical negligence case presented for the Delaware Supreme Court’s review centered on the dismissal of claims against two physicians on statute-of-limitations grounds, and whether that dismissal barred the prosecution of a timely filed claim based on the same underlying facts against the physicians’ employer under the doctrine of respondeat superior. The Superior Court, relying on the Supreme Court’s decision in Greco v. University of Delaware, 619 A.2d 900 (Del. 1993), ruled that the dismissal of the physicians effectively extinguished the claims against the physicians’ employer and therefore entered summary judgment in the employer’s favor. The Supreme Court found the Superior Court correctly read Greco, and under Greco’s teaching, the Superior Court’s dismissal was proper. In this en banc decision, however, the Supreme Court concluded Greco had to be overruled to the extent that it held that, if a plaintiff failed to sue the employee whose malpractice allegedly injured her within the statute of limitations, she was for that reason alone barred from suing the employer under principles of respondeat superior. Because in this case plaintiff sued the employer in a timely manner, settled principles of law authorized the plaintiff to proceed against that employer. “Although the plaintiff must of course prove her claim against the employer, including that the employee was negligent, the fact that she failed to sue the employee in a timely manner does not act to immunize the employer. Accordingly, we reverse the judgment of the Superior Court.” View "Verrastro v. Bayhospitalists, LLC" on Justia Law

Nicholas Olenik, a stockholder of nominal defendant Earthstone Energy, Inc., brought class and derivative claims against defendants challenging a business combination between Earthstone and Bold Energy III LLC. As alleged in the complaint, EnCap Investments L.P. controlled Earthstone and Bold and caused Earthstone stockholders to approve an unfair transaction based on a misleading proxy statement. Defendants moved to dismiss the complaint on several grounds, principal among them that the proxy statement disclosed fully and fairly all material facts about the transaction, and Earthstone conditioned its offer on the approval of a special committee and the vote of a majority of the minority stockholders. The Court of Chancery agreed with defendants and dismissed the case. Two grounds were central to the court’s ruling: (1) the proxy statement informed the stockholders of all material facts about the transaction; and (2) although the court recognized that EnCap, Earthstone, and Bold worked on the transaction for months before the Earthstone special committee extended an offer with the so-called MFW conditions, it found those lengthy interactions “never rose to the level of bargaining: they were entirely exploratory in nature.” Thus, in the court’s view, the MFW protections applied, and the transaction was subject to business judgment review resulting in dismissal. While this appeal was pending, the Delaware Supreme Court decided Flood v. Synutra International, Inc. Under Synutra, to invoke the MFW protections in a controller-led transaction, the controller must “self-disable before the start of substantive economic negotiations.” The controller and the board’s special committee must also “bargain under the pressures exerted on both of them by these protections.” The Court cautioned that the MFW protections will not result in dismissal when the “plaintiff has pled facts that support a reasonable inference that the two procedural protections were not put in place early and before substantive economic negotiations took place.” The Supreme Court determined the Court of Chancery held correctly that plaintiff failed to state a disclosure claim. But, the complaint should not have been dismissed in its entirety: applying Synutra and its guidance on the MFW timing issue, which the Court of Chancery did not have the benefit of at the time of its decision, plaintiff has pled facts supporting a reasonable inference that EnCap, Earthstone, and Bold engaged in substantive economic negotiations before the Earthstone special committee put in place the MFW conditions. The Supreme Court also found no merit to defendants’ alternative ground for affirmance based on EnCap’s supposed lack of control of Earthstone. The Court of Chancery’s decision was affirmed in part and reversed in part, and the case was remanded for further proceedings. View "Olenik v. Lodzinski, et al." on Justia Law

This case arose out of a 2013, hit-and-run investigation that escalated into an officer-involved shooting. Michael Rogers appealed a superior court order granting summary judgment in favor of Defendants Corporal Matthew Morgan, the State of Delaware, and the Department of Public Safety Division of State Police. Corporal Morgan responded to a hit-and-run call and ran the license plate of the offending vehicle, which belonged to Michael. Corporal Morgan traveled to Michael’s home, where Michael’s elderly mother, Lorraine Rogers, answered the door. Ms. Rogers, who lived with her son, invited Corporal Morgan into the home as she went to wake Rogers, who was heavily inebriated and asleep in his bedroom. When Rogers refused to step outside to investigate damage to his vehicle, Corporal Morgan gripped Rogers' arm to lead him outside. Rogers immediately began fighting Corporal Morgan, who ended the fight by shooting Rogers. The State then charged Rogers with resisting arrest and several counts of assault. At the first criminal trial, Rogers filed a motion to suppress evidence resulting from Corporal Morgan’s entrance into the home, which Michael claimed was a warrantless search without valid consent. The court denied Roger's motion to suppress, finding his mother invited the Corporal into the home, and neither Rogers nor his mother revoked consent. The jury was unable to reach a verdict, resulting in a mistrial. The State re-indicted Rogers for assault and resisting arrest; Rogers pled nolo contendere to resisting arrest charge, and the State dropped the assault charges. Rogers' plea resulted in his conviction for one count of resisting arrest with force or violence, for which he was sentenced to jail time followed by probation. Michael filed this civil action in Superior Court alleging federal and state invasion of privacy claims, among other counts. Corporal Morgan moved for summary judgment on the grounds that collateral estoppel barred Michael’s invasion of privacy claims, since the judge in the criminal trial had found that Corporal Morgan had permission to be in the home when the altercation ensued. The superior court agreed with the Corporal and granted summary judgment. Finding no reversible error in the superior court's judgment, the Delaware Supreme Court affirmed. View "Rogers v. Morgan, et al." on Justia Law

Based upon an informant’s tip and some “largely unproductive surveillance activity,” two Wilmington police detectives applied for a warrant to search Lamont Valentine’s apartment and automobile for evidence that Valentine, a convicted violent felon, was in possession of a firearm or ammunition. A magistrate issued the warrant, and when the officers conducted the search, they found marijuana, drug paraphernalia, and ammunition in the apartment and a firearm in the vehicle. These discoveries and other information provided by another resident of the apartment building resulted in numerous criminal charges against Valentine, including possession of a firearm by a person prohibited, drug dealing, aggravated possession of marijuana, terroristic threatening, and conspiracy. Valentine moved to suppress the fruits of the search on the grounds that the warrant affidavit and application did not establish probable cause that he had committed or was committing the offense of unlawfully possessing a firearm or that evidence of that crime was likely to be found in his apartment or car. The Superior Court denied the motion, and Valentine was eventually convicted of drug dealing, aggravated possession of marijuana, possession of drug paraphernalia, and endangering the welfare of a child. He appealed to challenge the Superior Court’s denial of his suppression motion. After review, the Delaware Supreme Court agreed with Valentine that the warrant application was insufficient to support a finding of probable cause that he had committed or was committing the crime identified in the warrant, or that a firearm was in his apartment or car. Accordingly, Valentine’s convictions were reversed. View "Valentine v. Delaware" on Justia Law

In this case, a Supplemental Nutrition Assistance Program (“SNAP”) recipient, Cindy Gonzalez, was found to have defrauded the federal government of $6,159 worth of SNAP benefits by representing that she lived alone and did not receive any income, when in fact she was not living alone and was receiving income. After discovering this wrongdoing, the Delaware Department of Health and Social Services (“DHSS”) brought an administrative proceeding against Gonzalez to disqualify her from continued participation in SNAP and claw back the benefits she received through her misrepresentations. The hearing officer found that DHSS had established intentional program violations and disqualified Gonzalez from continued participation in SNAP for one year, and DHSS’s audit and recovery arm assessed an overpayment of $6,159, which the federal government has started to collect by offsetting the other federal benefits she receives against her SNAP obligations. About five months after the DHSS final decision, the State of Delaware brought a civil action against Gonzalez under Delaware common law and the Delaware False Claims and Reporting Act based on the same circumstances underlying the DHSS administrative proceeding. This time, however, the State sought between approximately $200,000 and $375,000 in restitution, damages, and penalties; attorneys’ fees and costs; and an order enjoining Gonzalez from participating in SNAP until she pays the judgment. Gonzalez in turn filed an answer asserting an affirmative defense that federal law preempted the State’s Delaware law claims, and the State moved for judgment on the pleadings. The Superior Court granted the State’s motion, holding that federal law did not preempt the State’s claims. Gonzalez brought an interlocutory appeal of that determination. After review, the Delaware Supreme Court reversed, finding federal law prohibited the State from bringing consecutive administrative and civil actions against a SNAP recipient based on the same fraud. View "Gonzalez v. Delaware" on Justia Law

Appellant Justin Burrell, who was three months shy of his eighteenth birthday at the time the crimes were committed, was convicted by jury of first-degree murder, manslaughter, first-degree robbery, second-degree burglary, second-degree conspiracy, and four counts of possession of a firearm during the commission of a felony (“PFDCF”). He was sentenced to life imprisonment without the possibility of probation or parole for the first-degree-murder charge plus 50 years’ imprisonment for the remaining charges. In 2012, the United States Supreme Court decided Miller v. Alabama, which declared unconstitutional mandatory life imprisonment without the possibility of parole for juvenile offenders. In response to this ruling, the Delaware General Assembly enacted legislation modifying the juvenile sentencing scheme. At his resentencing, Burrell did not contest the applicability of the new 11 Del. C. Section 4209A’s 25- year minimum mandatory sentence to his first-degree-murder conviction, but argued that the court should not impose any additional statutory minimum mandatory incarceration for his five other convictions (first-degree robbery, second-degree burglary, and the three counts of PFDCF) on the grounds that such additional sentences would run afoul of Miller. The Superior Court disagreed and resentenced Burrell to the minimum mandatory 25 years’ imprisonment for the first-degree-murder charge plus an additional minimum mandatory 12 years’ incarceration for the other offenses. Burrell broadens his challenge to the Delaware Supreme Court, arguing the Superior Court erred when it imposed the 25-year minimum mandatory sentence for the first-degree-murder charge and the additional 12 years for the companion offenses. Further, he claimed the sentencing statutes were unconstitutionally “overbroad.” Finding no abuse of discretion or other reversible error, the Supreme Court affirmed Burrell's convictions and sentences. View "Burrell v. Delaware" on Justia Law

In early 2013, CITGO Petroleum Corp. Sunline Commercial Carriers, Inc., to ship its product through a Master Agreement, which was to be implemented by another agreement, a Term Agreement. The Master was set to expire on December 31, 2014, but could be terminated by either party on 60 days’ notice. The Term “remain[ed] in effect until the Master Agreement is expired or terminated” but also contained another sentence stating that it was a “1 Year agreement with a start date of April 1, 2013.” The Term required that CITGO ship a monthly minimum to Sunline, or compensate Sunline for failing to do so. Not long into their relationship, CITGO breached the agreement by failing to ship the monthly minimum, creating a “shortfall.” After breaching, CITGO used its leverage to obtain concessions that allowed it to make up the shortfall at the end of the parties’ contractual relationship. On March 31, 2014, CITGO sent Sunline a termination notice. Over the next two months, all of the Term Agreement’s specific provisions seemed to govern the parties’ relationship. During this time, CITGO shipped enough product to Sunline to meet its previously accrued shortfalls. But if the Term Agreement’s minimum monthly requirement remained in place, CITGO failed meet the minimum and generated additional shortfalls. At the end of May, CITGO stopped using Sunline to ship oil. Sunline sued and eventually moved for summary judgment, arguing that the Term Agreement remained in effect until May 31, 2014; CITGO was therefore still liable for the shortfalls generated before the termination notice; and CITGO generated shortfalls in April and May. In response, CITGO argued that the Term Agreement ended on March 31, 2014, the day CITGO sent its termination notice; that only the Master Agreement continued through May 31, 2014; and as a result, CITGO had no obligation to meet the Term Agreement’s minimum barrel requirements. The Superior Court held, as a matter of law, that the Term Agreement ended on March 31, 2014. Sunline appealed, arguing that the Superior Court’s contractual interpretation was inconsistent with the Term Agreement’s text, and that, in the alternative, the Term Agreement was ambiguous and parol evidence had to be considered. The Delaware Supreme Court reversed, finding the Term Agreement was meant to continue in force as long as the Master Agreement did. The Term Agreement contained conceivably conflicting terms, which could not be indisputably reconciled on the face of the contract, and was therefore ambiguous. The Court also reversed the Superior Court holding the oil shipped in April and May satisfied CITGO’s shortfall liability. The Superior Court failed to consider parol evidence because of its earlier finding that the Term Agreement expired, as a matter of law, on March 31, 2014. The parol evidence made summary judgment inappropriate as it supported the reasonableness of Sunline’s interpretation. View "Sunline Commercial Carriers, Inc. v. Citgo Petroleum Corporation" on Justia Law