Justia Delaware Supreme Court Opinion Summaries

This appeal pertains to a merger between TerraForm Power, Inc. (“TerraForm”) and affiliates, officers, and other executives of Brookfield Asset Management Inc. (“Brookfield”). The plaintiffs, former TerraForm stockholders, filed a lawsuit alleging breach of fiduciary duty by the defendants. The case involves the application of the legal framework established in Kahn v. M & F Worldwide Corp. (MFW), which provides for business judgment review if certain conditions are met.The trial court dismissed the case, holding that the merger satisfied the MFW conditions, thus entitling the transaction to business judgment review rather than the more stringent "entire fairness" review. The trial court also found that the plaintiffs had failed to adequately allege coercion under MFW and had failed to adequately plead that the stockholder vote was not fully informed.On appeal, the Supreme Court of Delaware concluded that the trial court correctly dismissed the coercion claim. However, the Supreme Court disagreed with the trial court's conclusion on the disclosure issues. The Supreme Court held that it was reasonably conceivable that the proxy statement's failure to disclose certain of the special committee’s advisors’ conflicts of interest and certain management fees Brookfield anticipated from the merger was a material omission that rendered the minority stockholders' vote uninformed.Therefore, the Supreme Court reversed the trial court’s decision and held that the case should not have been dismissed. View "City of Dearborn Police and Fire Revised Retirement System v. Brookfield Asset Management Inc." on Justia Law

In the case of James McDougal v. State of Delaware, McDougal was convicted of possession of a firearm by a person prohibited, possession of ammunition by a person prohibited, and carrying a concealed deadly weapon. His convictions and sentence followed the Superior Court’s denial of his pretrial motion to suppress evidence obtained from him during a street encounter with police officers. According to the State, the police had reasonable suspicion that McDougal was loitering, which justified his initial detention. A subsequent pat-down search revealed a concealed firearm. McDougal appealed the denial of his motion to suppress.The Supreme Court of the State of Delaware reversed and vacated the lower court’s judgment. The court found that the officers' suspicion of loitering was not reasonable and did not justify even a limited investigative seizure. The court also stated that the citizen is not required to answer the officer’s questions during a consensual encounter, and his refusal to answer cannot form the basis for reasonable suspicion of criminal activity. Applying these principles, the court concluded that the detention of McDougal and the consequent nonconsensual search of his person was unlawful. The court held that the Superior Court erred when it denied McDougal's motion to suppress. View "McDougal v. State" on Justia Law

This case revolves around a dispute between insurance companies Zurich American Insurance Company and American Guarantee and Liability Insurance Company (collectively, “Zurich”), and Syngenta Crop Protection, LLC (“Syngenta”), a company that manufactures and sells paraquat, a chemical compound used in herbicides that has been linked to the onset of Parkinson's disease. Zurich had issued primary commercial general liability policies and umbrella policies to Syngenta covering periods from January 1, 2017 to January 1, 2020.In January 2016, before the Zurich policies took effect, Syngenta received a letter from a law firm representing numerous victims of Parkinson’s disease who alleged they had been exposed to paraquat. The letter, while threatening future litigation, did not identify any individual claimants or specify any damages. The law firm did not file any lawsuits until after the inception of the Zurich policies.Zurich denied coverage for the lawsuits, arguing that the 2016 letter constituted a “claim for damages" that fell outside the policy period. Syngenta disagreed, arguing that the letter was too unclear and amorphous to constitute a claim for damages. The Superior Court of the State of Delaware sided with Syngenta, holding that the letter did not constitute a "claim for damages" under the Zurich policies.The Supreme Court of the State of Delaware affirmed the lower court's decision. The Court held that a “claim for damages” is a demand or request for monetary relief by or on behalf of an identifiable claimant. The Court found that the letter did not constitute a claim for damages because it did not identify any claimants or demand any monetary relief. The Court also upheld the lower court's dismissal of Syngenta's bad-faith counterclaim against Zurich, finding that Zurich had reasonable grounds to deny coverage at the time of the denial. View "Zurich American Insurance Company v. Syngenta Crop Protection LLC" on Justia Law

Kathleen McGuiness, an elected state official in Delaware, was indicted and tried on various criminal charges related to her conduct while in office. She was convicted of three charges and acquitted of two others. She appealed, claiming that the trial was fundamentally unfair and unconstitutional. The Supreme Court of Delaware held that the trial was fair and rejected most of McGuiness's arguments. However, the court agreed with McGuiness that the legal insufficiency of one of the charges resulted in a spillover of evidence that prejudiced the jury’s consideration of a closely linked charge. Therefore, the court reversed McGuiness's conviction for Official Misconduct. The case was remanded for further proceedings. The court also affirmed the trial court's decisions and McGuiness's convictions on all other charges. View "McGuiness v. State" on Justia Law

In this case, the Supreme Court of the State of Delaware reversed a lower court’s decision to terminate a biological father’s parental rights to his child. The father, Jack Mitchell, had consented to the child's guardianship by Rachel and Joshua Thayer, following the unexpected death of the child's mother. Six months later, the Thayers petitioned to terminate Mitchell’s parental rights on grounds of intentional abandonment. The Family Court granted their petition, finding clear and convincing evidence of abandonment and deciding termination was in the child’s best interests. However, the Supreme Court found that the evidence did not meet the high standard of clear and convincing proof of intentional abandonment required to terminate Mitchell's parental rights. The court noted that Mitchell had expressed a desire for reunification with his child and had taken steps toward that goal. The Supreme Court therefore reversed the Family Court’s decision and remanded the case for further proceedings regarding Mitchell's petition to rescind the Thayers' guardianship. View "Mitchell v. Thayer" on Justia Law

In the State of Delaware, a lawsuit was brought by two non-profit organizations against multiple public officials, including tax collectors in Delaware's three counties. The organizations sought increased funding for Delaware’s public schools. The Court of Chancery held that the organizations were entitled to attorneys’ fees and expenses. On appeal, the Supreme Court of Delaware held that the Court of Chancery erred in its application of the "common benefit doctrine" and its expansion of a precedent case, Korn v. New Castle County, beyond taxpayer suits. The Supreme Court affirmed the Chancery Court's award of expenses, but reversed the award of attorneys' fees. The Supreme Court held that the litigation brought by the organizations was to compel the defendant county governments to comply with the law, a benefit that did not warrant an exception to the "American Rule" which states that each party bears its own attorneys' fees, absent certain exceptions. The Court also held that, even if this case were a taxpayer suit, it does not meet the standard set forth in Korn because there was not a quantifiable, non-speculative monetary benefit for all taxpayers. View "In re Delaware Public Schools Litigation" on Justia Law

In Delaware, a father challenged the termination of his parental rights over his youngest child, J.M., who was born in November 2021. The mother, V.H., passed away a few weeks after giving birth, leaving the father, Jack Mitchell, to care for J.M. and his two older siblings. Due to various circumstances including Mitchell's brief incarceration and struggles with housing and employment, J.M. was placed in the guardianship of Rachel and Joshua Thayer, who were also the petitioners in the termination of parental rights case. The Thayers filed for termination of Mitchell's parental rights six months after assuming guardianship, asserting that Mitchell had intentionally abandoned J.M. The Family Court of the State of Delaware granted the petition, finding that the Thayers had proven by clear and convincing evidence that Mitchell had intentionally abandoned J.M. and that it was in the child's best interest for his parental rights to be terminated.On appeal, the Supreme Court of the State of Delaware found the evidence insufficient to support the Family Court's conclusion that Mitchell intentionally abandoned J.M. The Supreme Court noted situations where Mitchell expressed a desire and willingness to assume legal and physical custody of J.M., and evidence that showed Mitchell's improvements in his personal circumstances, such as creating his own business, moving into a house, and caring for his other children. Consequently, it determined that the Family Court erred in its decision to terminate Mitchell's parental rights. The Supreme Court reversed the Family Court's judgment and remanded the case for further proceedings. View "Mitchell v. Thayer" on Justia Law

In the case before the Supreme Court of the State of Delaware, Cantor Fitzgerald, L.P., a global financial services company, appealed a decision by the Court of Chancery. The case involved the company's contractual provisions that allowed it to withhold distributions otherwise owed to a partner who leaves the partnership and then competes with the partnership. The plaintiffs were six former partners who had their distributions, ranging from under $100,000 to over $5 million, withheld after they left Cantor Fitzgerald and joined competing businesses.The lower court held that these "forfeiture for competition" provisions were unenforceable, ruling they were unreasonable restraints on trade. However, the Supreme Court reversed this decision. It ruled that, under Delaware law, courts should enforce such agreements absent unconscionability, bad faith, or other extraordinary circumstances. The court emphasized the importance of freedom of contract, particularly in the context of sophisticated parties entering into a limited partnership agreement. It argued that public policy considerations favored enforcing the agreement, particularly as the parties had voluntarily agreed to the terms. As such, it held that Cantor Fitzgerald was within its rights to withhold the distributions based on the plaintiffs' competitive activities. The case was remanded to the lower court for further proceedings consistent with the Supreme Court's opinion. View "Cantor Fitzgerald, L.P. v. Ainslie" on Justia Law

In 2022, Fox Corporation and Snap Inc. amended their corporate charters to exculpate their officers from damages liability for breaches of the duty of care. The amendments were authorized by recent Delaware legislation. The companies' Class A non-voting common stockholders claimed that these amendments deprived them of their power to sue officers for damages for duty of care violations and, thus, a separate class vote was required to approve the amendments. However, the Supreme Court of the State of Delaware affirmed the Court of Chancery's decision that a separate class vote was not required. The court held that the ability to sue directors or officers for duty of care violations was a general right of the stockholders, not a class-based power stated in the corporate charter. Therefore, it was not a "power, preference, or special right" of the Class A common stock under Section 242(b)(2) of the Delaware General Corporation Law, which requires a separate class stockholder vote to amend a corporate charter if the amendment would adversely affect the powers, preferences, or special rights of the shares of such class. The holding was based on long-standing precedent and the court's interpretation of related sections of the Delaware General Corporation Law. View "In re Fox Corporation/Snap Inc. Section 242 Litigation" on Justia Law

In 2019, Jose Terreros was left in charge of his girlfriend's children. Upon returning home, his girlfriend was informed by her four-year-old daughter that Terreros had sexually abused her. The girlfriend immediately asked Terreros to leave and called the police. She later discovered concerning web searches on Terreros's phone, which he had left behind, including queries about how long saliva and fingerprints remain on bodies and clothes, and whether police can detect if a child has been raped. Based on this, investigators obtained a warrant to search Terreros's phone. They searched his messages, messaging apps, photos, videos, internet search history, GPS coordinates, and incoming and outgoing calls without any date restrictions. On trial, Terreros was found guilty of Sexual Abuse of a Child and Dangerous Crime Against a Child, but not guilty of Rape First Degree. Terreros appealed his conviction, arguing that the warrant was overbroad and that the verdicts were inconsistent. The Supreme Court of the State of Delaware agreed with Terreros regarding the warrant, finding it to be a general warrant and thus unconstitutional. The court held that all evidence obtained from the phone should have been suppressed. The court also remanded the inconsistent verdicts issue back to the lower court for further consideration, as it had not been fully addressed by the State. The court reversed Terreros's convictions and remanded the case for further proceedings. View "Terreros v. State" on Justia Law