Case Title: DeMatteis v. RISE Delaware, Inc.

Citation: 

Docket Number: 178, 2023

State: delaware

Court: Delaware Supreme Court

Date: 2024-04-12T00:00:00Z

Document:
IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
SECRETARY CLAIRE DEMATTEIS 
§ 
in her official capacity as Secretary of 
§ 
the Delaware Department of Human  
§  
No. 178, 2023D 
Resources and Co-Chair of the State  
§ 
Employee Benefits Committee,  
§  
Court Below:  Superior Court 
DIRECTOR CERRON CADE in his  
§ 
of the State of Delaware 
official capacity as Director of the  
§ 
 
Delaware Office of Management and  
§ 
C.A. No. N22C-09-526 
Budget and Co-Chair of the State 
§ 
 
Employee Benefits Committee,  
§ 
 
DELAWARE DEPARTMENT OF 
§ 
 
HUMAN RESOURCES, DELAWARE § 
STATE EMPLOYEE BENEFITS 
§ 
 
COMMITTEE, and DELAWARE  
§ 
DIVISION OF STATEWIDE  
§ 
BENEFITS  
§ 
 
 
 
§ 
 
Defendants Below, 
§ 
 
Appellants/Cross Appellees, 
§ 
 
 
§ 
 
v. 
§ 
 
 
§ 
RISEDELAWARE INC., KAREN  
§ 
  
PETERSON, and THOMAS PENOZA, § 
 
 
§ 
 
Plaintiffs Below,  
§ 
 
Appellees/Cross Appellants. 
§ 
 
 
 
Submitted: January 31, 2024 
 
 
Decided: 
April 12, 2024 
 
Before TRAYNOR, LEGROW, Justices; and ARRINGTON, Judge.1 
 
Upon appeal from the Superior Court of the State of Delaware.  REVERSED. 
 
 
1 Sitting by designation under Del. Const. art. IV, § 12 and Supreme Court Rules 2(a) and 4(a), to 
complete the quorum. 
 
 
Patricia 
A. 
Davis, 
Esquire, 
Adria 
Martinelli, 
Esquire, 
DELAWARE 
DEPARTMENT OF JUSTICE, Wilmington, Delaware; Max B. Walton, Esquire 
(argued), Shaun Michael Kelly, Esquire, Lisa R. Hatfield, Esquire, CONNOLLY 
GALLAGHER LLP, Wilmington, Delaware, for Appellants/ Cross Appellees 
Secretary Claire Dematteis in her official capacity as Secretary of the Delaware 
Department of Human Resources and Co-Chair of the State Employee Benefits 
Committee, Director Cerron Cade in his official capacity as Director of the 
Delaware Office of Management and Budget and Co-Chair of the State Employee 
Benefits Committee, Delaware Department of Human Resources, Delaware State 
Employee Benefits Committee, and Delaware Division of Statewide Benefits. 
 
 
Sidney S. Liebesman, Esquire (argued), Austen C. Endersby, Esquire, Nathan 
Barillo, Esquire, FOX ROTHSCHILD LLP, Wilmington, Delaware, for Appellees/ 
Cross Appellants RiseDelaware Inc., Karen Peterson, and Thomas Penoza. 
 
LEGROW, Justice: 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
This is an appeal from a decision of the Superior Court (1) finding that the 
decision of the State Employee Benefits Committee (“SEBC”) adopting a Medicare 
Advantage Plan for State retirees was subject to the requirements of Delaware’s 
Administrative Procedures Act (“APA”); (2) granting Appellees’ Motion to Stay the 
implementation of the Medicare Advantage Plan; and (3) requiring the State to keep 
its retirees’ Medicare Supplement Plan in full force and effect.  On cross-appeal, 
Appellees challenge the Superior Court’s decision denying their application for 
attorneys’ fees.   
The core question before us is one of statutory interpretation: under the APA, 
is the SEBC’s selection of a particular type of Medicare plan a “regulation” as the 
General Assembly has defined that term?  Because the statute relevantly limits a 
regulation to a “rule or standard,” and the SEBC’s choice of a statutorily authorized 
Medicare plan does not fall within the plain meaning of the terms “rule” or 
“standard,” we conclude that the SEBC’s decision was not a regulation.  
Accordingly, the Superior Court did not have jurisdiction to enter the challenged 
stay, and we reverse the decision on appeal.  The important policy considerations 
that attend the selection of healthcare coverage for State retirees are questions 
appropriately addressed to the legislative and executive branches. 
 
2 
 
I. 
RELEVANT FACTUAL AND PROCEDURAL BACKGROUND2 
A. 
SEBC process  
The SEBC is responsible for implementing, overseeing, and managing State 
employee benefits.3  The agency’s powers and duties are codified in 29 Del. C. §§ 
9602(b) and 5210(1-5).  Those responsibilities and powers include the “[s]election 
of the carriers or third-party administrators deemed to offer the best plan to satisfy 
the interests of the State and its employees and pensioners in carrying out the intent 
of this chapter.”4  The Delaware Code cabins the SEBC’s discretion by specifying 
the types of coverage it must provide, including that the SEBC must select “a plan 
which is supplemental to Medicare parts A and B, or constructed as a plan under 
Medicare part C, for eligible pensioners entitled to services, rights or benefits under 
the federal Medicare Program.”5  Before 2023, the State retirees’ health insurance 
plan was a Medicare part A and B supplemental plan titled “Highmark BCBS 
Special Medicfill Supplemental Plan.”6 
 
2 Unless otherwise noted, the recited facts are taken from the Superior Court’s October 19, 2022 
Order.  See RiseDelaware Inc. v. DeMatteis, 2022 WL 11121549 (Del. Super. Oct. 19, 2022) 
(hereinafter “Stay Order at __.”). 
3 Corrected Appellants’ Opening Brief at 5 (hereinafter, “Appellants’ Opening Br. at __”).  Title 
29, Section 9602(a) of the Delaware Code establishes the members of the SEBC.  
4 29 Del. C. § 5210(3). 
5 29 Del. C. § 5203(b). 
6 Appellants’ Opening Br. at 6 (citing App. to Appellants’ Opening Br. at A27, A67).  See 
Appellees’ Answering Br. on Appeal and Cross-Appellants’ Opening Br. on Cross Appeal at 10 
(hereinafter, “Appellees’ Answering Br. at __.”) (containing an explanation of retirees’ healthcare 
benefits).  
 
3 
 
The SEBC held a meeting on February 28, 2022, at which it unanimously 
approved a motion to move the retirees to a Group Medicare Advantage plan, which 
is a plan under Medicare part C.7  “At the March 14th meeting, the Committee 
approved the implementation of the Medicare Advantage plan for the January 1, 
2023 plan year.”8  The SEBC met again on April 25, 2022, and “approved the rates 
for the Medicare pensioner plan options and those proposed options were voted on 
to replace the [then-existing plans].”9  At the same meeting, “a motion was adopted 
to approve Medicare Advantage plan with prescription as the only Medicare 
pensioner option.”10  On June 1, 2022, an introductory mailing was sent to eligible 
Medicare pensioners about the transition to a Medicare Advantage Plan beginning 
January 1, 2023.11 
 
7 App. to Appellants’ Opening Br. at A234. 
8 Stay Order at *1. 
9 Id. 
10 Id.  The parties, especially Appellees, spent a substantial portion of their briefs detailing the 
SEBC’s process for considering the Medicare Advantage Plan and the notice provided to the public 
regarding that process.  There is no dispute, however, that if the SEBC’s adoption of a Medicare 
Advantage Plan fell within Delaware’s Administrative Procedures Act, the SEBC did not meet the 
requirements of that Act.  Conversely, if the SEBC’s decision did not fall within the Act, the 
process it followed is not relevant because Appellees are not pursuing any other claim.  
Accordingly, we do not recite in detail the various meetings and decision points on which 
Appellees focus.  
11 App. to Appellants’ Opening Br. at A72. 
 
4 
 
The Medicare Advantage contract was awarded on February 28, 2022, and 
finalized on September 28, 2022.12  Two days later, on September 30, 2022, “the 
State updated information on its website providing an 11-page document labeled 
“Frequently Asked Questions” (“FAQs”) under its information tab in Medicare 
Benefits explaining this shift in health care coverage to Medicare Advantage.”13  On 
October 12, 2022, after this action was filed in the Superior Court, an overview was 
made available on the State’s website that explained the prior authorization process 
that the new plan would require for certain medical procedures.14 
B. 
Complaint filed in Superior Court  
On September 25, 2022, Appellees/Plaintiffs below, RiseDelaware Inc.;15 
Karen Peterson; and Thomas Penoza (collectively, “Appellees” or “RiseDelaware”) 
filed a Complaint in the Superior Court against Appellants/Defendants below, 
Secretary Claire DeMatteis, in her official capacity as Secretary of the Delaware 
Department of Human Resources and Co-Chair of the SEBC; Director Cerron Cade, 
in his official capacity as Director of the Delaware Office of Management and 
 
12 Id. at A130. 
13 Stay Order at *2 (“The FAQs document explained the policy requires State retirees to enroll in 
a Medicare Advantage plan with prescription or lose their State-funded health insurance.”). 
14 Id.  The website was labeled “Highmark Blue Cross Blue Shield of Delaware Freedom Blue 
Medicare Advantage PPO Prior Authorization Overview.” Id. 
15 RiseDelaware Inc. is a nonprofit corporation which “was established and is managed by 
Delaware retirees to act as a sentinel on issues involving State health care benefits provided for 
Medicare-eligible Delaware retirees[.]” App. to Appellees’ Answering Br. at B4. 
 
5 
 
Budget and Co-Chair of the SEBC;  the SEBC; the Delaware Department of Human 
Resources (“DHR”); and the Delaware Division of Statewide Benefits (“DSB”) 
(collectively, “Appellants” or “SEBC”).16  The Complaint contained three counts 
and sought two forms of relief: (1) declaratory relief under 10 Del. C. § 6501 and 29 
Del. C. § 10141, and (2) a stay order under 29 Del. C. § 10144 preventing Appellants 
from executing a contract with Highmark or further implementing a Medicare 
Advantage Plan pending judicial review.17  Given the expectation that open 
enrollment for the new plan was scheduled to begin on October 3, 2022, the parties 
engaged in expedited proceedings in the Superior Court.18 
C. 
Motion to Stay and Stay Order 
On October 4, 2022, Appellees filed a Motion to Stay “implementation of the 
new Highmark Medicare Advantage Plan for State retirees and the open enrollment 
period currently in effect for State retirees” under 29 Del. C. § 10144.19  Appellants 
filed their Answering Brief in Opposition to the Motion to Stay on October 11, 
2022.20  On October 17, 2022, the Superior Court heard oral argument on the Motion 
 
16 Id. at B1–38. 
17 Id. (“Count One. Violation of the Administrative Procedures Act, 29 Del. C. §§ 10115–10118. 
. . . Count Two. Violation of the Administrative Procedures Act, 29 Del. C. §§ 101414. . . . Count 
Three. Declaratory Relief under 10 Del. C. § 6501 and 29 Del. C. § 10141.”). 
18 App. to Appellants’ Opening Br. at A34. 
19 App. to Appellees’ Answering Br. at B89. 
20 App. to Appellants’ Opening Br. at A17. 
 
6 
 
to Stay and reserved its decision.21  On October 19, 2022, the Superior Court issued 
an Order granting the Motion to Stay (the “Stay Order”).22   
In granting the Motion to Stay, the Superior Court held that it had authority to 
enter a stay under 29 Del. C. § 10144 because “the decision of the SEBC is 
considered a regulation under the Delaware Administrative Procedures Act[.]”23  
The court first noted that under the APA, a “[r]egulation means any statement of 
law, procedure, policy, right, requirement or prohibition formulated and 
promulgated by an agency as a rule or standard, or as a guide for the decision of 
cases thereafter by it or by any other agency, authority or court.”24   Further, the court 
noted that the SEBC exercised its authority—which is granted under Title 21 
Sections 9602 and 5210 of the Delaware Code—when it “enacted a policy requiring 
retirees to move from their State-subsidized Medicare Plan to Medicare Advantage 
plan or stay with traditional Medicare and give up their State-subsidized benefits.  
Therefore, such policy change is a regulation under the APA.”25  The court rejected 
Appellants’ argument that, under this Court’s decision in Free-Flow Packaging Int’l, 
 
21 Id. at A9. 
22 Stay Order at *1. 
23 Id. at *3. 
24 Id.; 29 Del. C. § 10102(7). 
25 Stay Order at *3. 
 
7 
 
Inc. v. Sec’y of Dep’t of Nat. Res. & Env’t Control of State,26 29 Del. C. §§ 9602 and 
5210 “authorized [the] SEBC to change retirees’ healthcare plans without following 
the formal APA requirements.”27  The court held that “[h]ere, there is no specific 
statutory directive for SEBC to force all retirees from their State-subsidized benefits 
to a Medicare Advantage plan or lose benefits[,]” and “[t]herefore, Free-Flow does 
not apply.”28 
 
The court next assessed the merits of Appellees’ arguments for a stay, 
including the likelihood of success on the merits and imminent harm, finding that 
there was a likelihood of success on the merits and that retirees in the present and 
future would face irreparable harm if the stay was not granted.29  Further, the court 
found that a stay would not harm the public and concluded that “the harm to 
[Appellees] far outweighs the harm to [Appellants] and the public.”30  
 
In granting the Appellees’ Motion to Stay, which effectively meant State 
retirees would retain their current benefits for the immediately foreseeable future, 
the court stated that “implementation of a Medicare Advantage Plan for State retirees 
and acceptance of enrollment into the Plan, including by way of automatic 
 
26 Free-Flow Packaging Int’l, Inc. v. Sec’y of Dep’t of Nat. Res. & Env’t Control of State, 861 
A.2d 1233 (Del. 2004). 
27 Stay Order at *3. 
28 Id. 
29 Id. at *3–4.  
30 Id. at *5. 
 
8 
 
enrollment in the open enrollment period currently in effect for State retirees is 
stayed until further Order by this Court.”31  The court also required the State to 
ensure “that the healthcare insurance and benefits available to State retirees prior to 
October 3, 2022, or in which they were enrolled prior to that time, remain in full 
force and effect.”32  Further, the court scheduled a trial on the merits to make final 
factual determinations.33  Not long after that, the trial was removed from the calendar 
at the parties’ request.34 
D. 
Petition for Attorneys’ Fees  
On November 14, 2022, Appellees filed a Motion for Attorneys’ Fees (the 
“Fee Motion”), arguing that the APA allows an award of fees when there is success 
in achieving a stay order and that the Appellants’ conduct warranted fee-shifting in 
this case.35  On February 8, 2023, the court issued an order denying Appellees’ Fee 
Motion.36 
 
31 Id. 
32 Id. 
33 Id. 
34 App. to Appellants’ Opening Br. at A8 (11/9/2022 Stipulation and [Proposed] Order for 
Resolution of Remaining Claims and Issues, D.I. No. 36). 
35 App. to Appellees’ Answering Br. at B340–61. 
36 Id. at B288–94. 
 
9 
 
E. 
Stipulations for Final Judgment  
On November 18, 2022, the parties filed a Joint [Proposed] Stipulation and 
Order for Resolution of Remaining Claims and Issues.37  The proposed joint 
stipulation and order provided: (1) that Appellants would file a memorandum in 
opposition to Appellees’ Fee Motion; (2) the timelines for filings and procedures if 
the court were to rule in favor of the Fee Motion; (3) the procedure the parties would 
follow upon resolution of the Fee Motion; and (4) that “[u]pon entry of final 
judgment, each party shall be permitted to appeal as authorized by law.  Nothing in 
this stipulation shall be deemed a waiver of any applicable right of appeal nor shall 
it be deemed to preclude any arguments on appeal that were raised in the underlying 
proceedings.”38  On December 6, 2022, the court refused to enter the November 18, 
2022 stipulation and proposed order, requesting that the parties “[p]lease file a 
stipulation reflective of the resolution of the case. It seems that the parties are at the 
point of over litigating this case.”39 
On December 16, 2022, the parties filed another Stipulation and [Proposed] 
Order for Entry of Final Judgment asking the court to enter a Final Order stating 
that: (1) the action was ripe for entry of final judgment on all matters except the 
 
37 Id. at B270–72. 
38 Id. 
39 Id. at B274–78. 
 
10 
 
court’s ruling on the Motion to Amend40 and the Fee Motion; (2) “[u]pon rendering 
its rulings on the Motion to Amend and Fee Petition, the Court may enter the form 
of Order, attached hereto as Exhibit 1, as its Order and Final Judgment, fully 
disposing of all matters in the Action[;]” and (3) “[u]pon entry of the attached form 
of Order, each party shall be permitted to appeal as authorized by law. Nothing in 
this stipulation shall be deemed a waiver of any applicable right of appeal; nor shall 
it be deemed to preclude any arguments on appeal that were raised in the underlying 
proceedings.”41  For reasons that are not clear from the record before us, the court 
never entered this proposed stipulation and order. 
F. 
Appellants’ First Appeal  
On February 15, 2023, following the ruling denying the Fee Motion, the 
Appellants filed their Notice of Appeal in this Court.42  Because the court had not 
entered a final order, the Appellants’ first appeal was dismissed as interlocutory and 
remanded to the Superior Court.43 
 
40 On December 2, 2022, the Appellees filed a Motion to Amend and Supplement their Complaint, 
which the court denied on December 19, 2022.  Id. at B444; Appellants’ Opening Br. at 12. 
41 App. to Appellees’ Answering Br. at B279–87. 
42 Appellants’ Opening Br. at 13. 
43 DeMatteis v. RiseDelaware Inc., 295 A.3d 1098, 2023 WL 2761690, at *2 (Del. Apr. 3, 2023) 
(TABLE). 
 
11 
 
G. 
Appellants’ Motion for Final Order and the Trial Court’s Order on Final 
Judgment  
After dismissal of Appellants’ first appeal, Appellants submitted a Motion and 
[Proposed] Order for Entry of Final Judgment.44  Appellees opposed that motion, 
and the court heard oral argument.45  On May 22, 2023, the court issued its Order on 
Final Judgment (the “Final Order”).46  The Superior Court’s Final Order did not 
adopt the language proposed by the SEBC.47  Appellants filed their notice of appeal 
in this Court on the same day.  On June 21, 2023, Appellees filed their notice of 
cross-appeal. 
II. 
STANDARD OF REVIEW 
This Court reviews questions of law, including the interpretation of a statute, 
de novo.48  “The goal of statutory construction is to determine and give effect to 
legislative intent.”49  When the unambiguous language of the statute clearly reflects 
the legislature’s intent, the plain meaning of the statutory language controls.50  “A 
 
44 App. to Appellees’ Answering Br. at B301–12. 
45 Plaintiffs’ Opp. To Defendants’ Motion for Entry of Final Judgment (Super. Ct. D.I. No. 64); 
App. to Appellees’ Answering Br. at B313–29. 
46 RiseDelaware Inc. v. DeMatteis, 2023 WL 3625996 (Del. Super. May 22, 2023) (hereinafter 
“Final Order at __.”). 
47 Id.; App. to Appellees’ Answering Br. at B301–05. 
48 City of Wilm. v. Nationwide Ins. Co., 154 A.3d 1124, 1127 (Del. 2017); Clark v. Clark, 47 A.3d 
513, 517 (Del. 2012). 
49 Eliason v. Englehart, 733 A.2d 944, 946 (Del. 1999). 
50 Spielberg v. State, 558 A.2d 291, 293 (Del. 1989); Eliason, 733 A.2d at 946. 
 
12 
 
statute is ambiguous ‘if it is reasonably susceptible of different constructions or 
interpretations’ or ‘if a literal reading of the statute would lead to an unreasonable 
or absurd result not contemplated by the legislature.’” 51 
We review an attorneys’ fee award for abuse of discretion.52  Delaware law 
follows the American Rule, under which litigants are generally responsible for 
paying their own litigation costs.53  Courts recognize “limited equitable exceptions” 
to the American Rule, including one for a party’s “bad faith” conduct throughout 
litigation.54  Although there is no all-encompassing definition of “bad faith” conduct, 
Delaware courts have granted attorneys’ fees where a party “unnecessarily 
prolonged or delayed litigation, falsified records, or knowingly asserted frivolous 
claims.”55  In Delaware, the “bad faith” exception only applies in “extraordinary 
circumstances.”56  Its purpose is “to deter abusive litigation and protect the integrity 
of the judicial process.”57 
 
51 LeVan v. Independence Mall, Inc., 940 A.2d 929, 933 (Del. 2007) (quoting Newtowne Vill. Serv. 
Corp. v. Newtowne Rd. Dev. Co., 772 A.2d 172, 175 (Del. 2001)). 
52 Bako Pathology LP v. Bakotic, 288 A.3d 252, 266 (Del. 2022); Bhole, Inc. v. Shore Invs., Inc., 
67 A.3d 444, 449 (Del. 2013); Sternberg v. Nanticoke Mem'l Hosp., Inc., 62 A.3d 1212, 1220 (Del. 
2013); Johnston v. Arbitrium (Cayman Is.) Handels AG, 720 A.2d 542, 546 (Del. 1998). 
53 Mahani v. Edix Media Group, Inc., 935 A.2d 242, 245 (Del. 2007); Johnston, 720 A.2d at 545. 
54 Montgomery Cellular Holding Co., Inc. v. Dobler, 880 A.2d 206, 227 (Del. 2005). 
55 Johnson, 720 A.2d at 546. 
56 Brice v. State Dept. of Correction, 704 A.2d 1176, 1179 (Del. 1998). 
57 Montgomery Cellular, 880 A.2d at 227. 
 
13 
 
III. 
ANALYSIS 
There are two main issues on appeal.  First, Appellants assert that the Superior 
Court erred in holding that the SEBC’s decision adopting a Medicare Advantage 
plan was a regulation as that term is defined in the APA.  Second, on cross-appeal, 
Appellees argue that the Superior Court erred by refusing to grant their application 
for attorneys’ fees.  
A. 
The Superior Court erred in holding that the SEBC’s decision was a 
regulation as defined in Delaware’s Administrative Procedures Act. 
Appellants contend that the SEBC is not required to promulgate a regulation 
when it enters into a contract for the administration of health care benefits for State 
retirees or employees.58  Appellants argue that the SEBC’s decision to move State 
retirees to a Medicare part C plan was consistent with a specific statutory directive 
authorizing that step and that the canons of statutory construction show that the 
selection of a carrier is not a “regulation” as the APA defines that term.59  Because 
the SEBC’s Medicare Advantage decision is not governed by the APA, Appellants 
contend that the Superior Court’s Stay Order, which was issued under the APA, must 
be reversed.60 
 
58 Appellants’ Opening Br. at 14.  
59 Id. at 14, 19. 
60 Id. at 24. 
 
14 
 
In response, Appellees argue that Appellants are legally foreclosed from 
challenging the Stay Order in this appeal because: (1) Appellants “did not ask the 
Superior Court at the final judgment stage to lift the Stay Order’s injunction against 
the implementation of Medicare Advantage; and” (2) Appellants’ “Opening Brief 
did not challenge the Final Order so that their arguments seeking to have the Stay 
Order overturned amount to an untimely interlocutory appeal not in compliance with 
Superior Court Rule 42[.]”61  Appellees further argue that, if this Court reaches the 
merits of the issue on appeal, the Stay Order should be upheld because the SEBC’s 
decision to move to a Medicare Advantage Plan is a “policy change” and therefore 
is a regulation within the meaning of the APA.  Appellees argue that the SEBC’s 
adoption of Medicare Advantage was not pursuant to a specific legislative directive 
and no statutory provision negated the APA’s binding rule-making obligations on 
the SEBC.62 
1. 
The issue on appeal may be considered on its merits. 
Before addressing the substance of Appellants’ position, Appellees advance 
several procedural arguments that they contend bar our consideration of this appeal.  
Appellees first urge us to remand without addressing the merits of Appellants’ 
 
61 Appellees’ Answering Br. at 31.  
62 Id. at 38–43. 
 
15 
 
arguments because the appeal challenges an interlocutory order.63  Appellees assert 
that Appellants only dispute the Stay Order, that this Court dismissed as 
interlocutory Appellants’ previous attempt to appeal that order,64 and that Appellants 
did not “argue the Stay Order was merged into and affected the Final Order, such 
that the Stay Order could be appealed on that basis.”65  Appellees further argue that 
“[t]he Superior Court’s Final Order was affected not by the Stay Order, but rather 
[by] the parties’ own actions to resolve the matter after the Stay Order was 
entered.”66   
We confess that this argument is both puzzling and challenging to address 
because of the unusual order of proceedings in the Superior Court.  We conclude, 
however, that Appellees’ procedural arguments lack merit.  Although Appellees are 
correct that the Final Order does not expressly merge with the Stay Order, the Final 
Order refers to the Stay Order multiple times.67  The trial court’s clear intent was to 
enter a final, appealable order as to all the issues in the case.  Moreover, Appellees 
 
63 Id. at 32. 
64 Id. See DeMatteis v. RiseDelaware Inc., 295 A.3d 1098, 2023 WL 2761690, at *2 (Del. Apr. 3, 
2023) (TABLE) (“[T]he Superior Court's failure to enter the proposed order for entry of final 
judgment—again, submitted at the Superior Court's request and the form and substance of which 
was agreed to by the parties—renders the finality and scope of the Order and the Decision 
uncertain. Accordingly, we must dismiss this appeal for the State’s failure to comply with Rule 42 
when taking an appeal from an interlocutory order.”). 
65 Appellees’ Answering Br. at 33. 
66 Id. 
67 Final Order at *2. 
 
16 
 
conceded at oral argument that they had agreed that the issue was ripe for appeal and 
“the [Appellees] were more than happy to come on to an appeal on the issue of 
whether the APA applied.” 68  
Appellees support their contention that this appeal is interlocutory by citing 
Tyson Foods, Inc. v. Aetos Corp.69 Tyson stands for the proposition that “[a]n 
aggrieved party can appeal to this Court only after a final judgment is entered by the 
trial court. . . . [and] a final judgment is one that determines all the claims as to all 
the parties.”70  But Appellees’ reliance on Tyson is misplaced; unlike the appellant 
in Tyson, the Appellants here filed a timely appeal of the trial court’s subsequent 
judgment, which was the Final Order.  The Final Order was entered a month after 
this Court remanded the matter to the trial court after holding that the Stay Order 
was interlocutory.71  The trial court and the parties intended the Final Order to be a 
final judgment.  To remand the matter again as interlocutory would be absurd and 
would put the courts in a perpetual loop, ignoring the clear intent of the trial court 
 
68 Oral Argument at 18:12–19:20. 
69 809 A.2d 575, 580 (Del. 2001); Appellees’ Answering Br. at 34. 
70 Tyson Foods, 809 A.2d at 579 (“The test for whether an order is final and therefore ripe for 
appeal is whether the trial court has clearly declared its intention that the order be the court's ‘final 
act’ in a case.”) (citing Del. Const. art. IV, § 11(1)(a); Harrison v. Ramunno, 730 A.2d 653 (Del. 
1999)).  See J.I. Kislak Mortgage Corp. v. William Matthews Builder, Inc., 303 A.2d 648, 650 
(Del. 1973) (holding order is deemed final if decision is trial court’s last act in disposing of all 
justiciable matters within its jurisdiction). 
71 The Final Order was issued on May 22, 2023.  Final Order at *1.  This Court issued its decision 
in the initial appeal on April 3, 2023.  DeMatteis v. RiseDelaware Inc., 295 A.3d 1098, 2023 WL 
2761690, at *2 (Del. Apr. 3, 2023) (TABLE). 
 
17 
 
and the parties.  Dismissal of the appeal also would leave the SEBC without a clear 
directive as to whether the APA applies to its selection of health plans for State 
employees and retirees.   
Appellees also make a “merger” argument, citing a series of non-Delaware 
cases72 that explain that a “provisional remedy designed to retain the status quo while 
the action was pending [] does not ‘necessarily affect’ the final judgment, and thus 
the appeal does not bring it up for review.”73  Although it is true that a provisional 
remedy may not always “affect” the final judgment, here the Stay Order does just 
that.  The trial court’s conclusion that the APA applied to the SEBC’s decision 
effectively resolved the merits of the parties’ dispute and ended the need for further 
litigation in the Superior Court.  Given the facts of this case, the language of the 
proposed stipulations and the Final Order, and the fact that there were no other 
readily apparent steps available to Appellants to seek review of the trial court’s legal 
conclusions regarding the scope of the APA, the requirements for merger are met. 
Appellees’ argument that Appellants are legally foreclosed from challenging 
the Stay Order on the basis of waiver is equally unavailing.  The parties agreed to 
 
72 See Camesi v. Univ. of Pittsburgh Med. Ctr., 729 F.3d 239, 244–45 (3d Cir. 2013) (“Under the 
‘merger rule,’ prior interlocutory orders merge with the final judgment in a case, and the 
interlocutory orders (to the extent that they affect the final judgment) may be reviewed on appeal 
from the final order.”) (citing and quoting In re Westinghouse Sec. Litig., 90 F.3d 696, 706 (3d 
Cir. 1996)). 
73 Two Guys From Harrison-NY v. S.F.R. Realty Assocs., 186 A.D.2d 186, 189(N.Y. App. Div. 
1992); Appellees’ Answering Br. at 33. 
 
18 
 
two stipulations—on November 18, 2022 and December 16, 2022—that express 
their shared intent that a final judgment be entered.74  The stipulated final orders 
proposed by the parties would have made merger clear.  Further, at oral argument 
the trial court recognized that the “cased ended outside of court” with “no trial” and 
no “findings of fact or conclusions of law,” and the only issue left to address by the 
court was the request for attorneys’ fees.75 
These stipulations contained clear language that “[w]ith the exception of the 
Court’s rulings on the Motion to Amend and Fee Petition, the Action is ripe for entry 
of final judgment.”76  Further, the December 16, 2022 stipulation provided that upon 
a ruling on the Motion to Amend and Fee Petition, all matters in the action were 
fully disposed, and “[n]othing in this stipulation shall be deemed a waiver of any 
applicable right of appeal; nor shall it be deemed to preclude any arguments on 
appeal that were raised in the underlying proceedings.”77  Appellants argue that:  
Although the Superior Court did not sign this particular proposed order, 
choosing to use its own form of order, both parties agreed that the 
conclusions of law to date disposed of the issues, other than 
[Appellees’] request for attorneys’ fees, at the lower court level. The 
parties presented the stipulation to the Court with full knowledge that 
 
74 App. to Appellees’ Answering Br. at B270–72, B279–87. 
75 Id. at B315.  
76 Id. at B280. 
77 Id. at B281. 
 
19 
 
the other side would be appealing any adverse decision of the Superior 
Court.78 
 
We agree with this reasoning.  Although the court did not enter either proposed 
stipulation, the fact remains that the parties agreed to their terms, and nothing in 
Appellants’ actions can fairly be construed as a waiver of their right to appeal the 
trial court’s legal holding.  Appellees cite no authority for their assertion that 
Appellants waived the issue by failing to ask the trial court to lift the Stay Order, 
and we cannot discern a legal or practical reason to find waiver under these 
circumstances.  
Appellees also argue that the appeal was mooted by the SEBC’s later actions, 
particularly (1) a September 7, 2023 agreement signed by the State and Highmark 
Blue Cross Blue Shield terminating the contract at issue in the trial court; and (2) a 
decision and vote by the SEBC on October 2, 2023 to solicit bids for a Medicare 
supplement plan that “duplicates the current plan without deviation.”79  The issue of 
mootness was raised at oral argument, but it was not properly presented in the 
parties’ briefs and rests on facts that are not part of the appellate record.80  In any 
event, the plain language of the Stay Order required Appellants to “take all necessary 
 
78 Appellants’ Reply Br. on Appeal and Cross-Appellees’ Answering Br. on Cross-Appeal at 23 
(hereinafter, “Appellants’ Reply Br. at __.”) (citing App. to Appellees’ Answering Br. at B261, 
B272, B311). 
79 Oral Argument at 21:18–22:47. 
80 Id. at 21:09–24:59. 
 
20 
 
and proper steps to ensure that the healthcare insurance and benefits available to 
State retirees prior to October 3, 2022, or in which they were enrolled prior to that 
time, remain in full force and effect.”81  The Court cannot conclude that the SEBC’s 
actions in compliance with the trial court’s order mooted the SEBC’s appeal 
challenging that order.  There is a live controversy about the Stay Order, which the 
next section of this opinion addresses.  
2. 
The challenged agency decision was not a “Regulation” under the 
relevant statute. 
The APA grants the Superior Court the authority to stay enforcement of an 
agency regulation under 29 Del. C. § 10144, which states: 
When an action is brought in the Court for review of an agency 
regulation or decision, enforcement of such regulation or decision by 
the agency may be stayed by the Court only if it finds, upon a 
preliminary hearing, that the issues and facts presented for review are 
substantial and the stay is required to prevent irreparable harm. 
 
There is no dispute that the Superior Court’s authority to issue a stay under Section 
10144 is limited to actions challenging an agency regulation or decision.  Neither 
side argues that the SEBC’s action was a “decision,” which is specifically limited 
by statute to circumstances not at issue in this case.82  Whether the SEBC’s action in 
adopting a Medicare Advantage Plan was a regulation is the only aspect of the trial 
 
81 Stay Order at *5. 
82 29 Del. C. §§ 10102(3), 10142. 
 
21 
 
court’s decision that Appellants challenge.  If it was, the APA applies, and the SEBC 
concedes that it did not comply with the APA’s procedures when it selected the 
Medicare Advantage Plan.83  
The issue before us is a straightforward statutory interpretation question.  
“Regulation” is defined in 29 Del. C. § 10102.  The code states that “Regulation”: 
means any statement of law, procedure, policy, right, requirement or 
prohibition formulated and promulgated by an agency as a rule or 
standard, or as a guide for the decision of cases thereafter by it or by 
any other agency, authority or court. Such statements do not include 
locally operative highway signs or markers, or an agency's explanation 
of or reasons for its decision of a case, advisory ruling or opinion given 
upon a hypothetical or other stated fact situation or terms of an 
injunctive order or license.84 
 
Neither party argues that the definition of “Regulation” is ambiguous.  Section 9602 
establishes the SEBC and its members85 and broadly defines its powers, duties, and 
functions.86  29 Del. C. § 5210 further describes the SEBC’s powers and duties, 
 
83 Appellees argue that the statutory interpretation issue was not raised below.  Appellees’ 
Answering Br. at 36 (“Defendants did not dispute below, nor do they now on appeal, that the SEBC  
is subject to the APA governing the adoption regulations.”).  This argument embraces an 
unworkable and unhelpful view of the court’s role by implying that the court should ignore the 
plain language of the statute because the parties did not sufficiently focus on it below. 
84 29 Del. C. § 10102(7). 
85 29 Del. C. § 9602(a).  
86 29 Del. C. § 9602(b)(1)–(5).  The SEBC’s powers, duties, and functions include: “. . . (2) 
Selection of all carriers or third-party administrators necessary to provide coverages to State 
employees.  (3) Authority to contract on an insured or self insured basis.  (4) Authority to adopt 
rules and regulations for the general administration of the employee benefit coverages.  (5) 
Authority to make and enter into any and all contracts with any agency of the State, or any outside 
agency, for the purpose of assisting in the general administration of this section.”  Id. 
 
22 
 
which include controlling and managing the group health insurance program for 
State employees and retirees.87   
When interpreting a statute, we attempt to ascertain and give effect to the 
General Assembly’s intent.88   
First, we must determine whether the relevant statute is ambiguous.  A 
statute is ambiguous when it can reasonably be interpreted in two or 
more different ways “or if a literal reading of its terms ‘would lead to 
an unreasonable or absurd result not contemplated by the legislature.’”  
If we determine that a statute is unambiguous, we give the statutory 
language its plain meaning.  If we determine that a statute is ambiguous, 
“we consider the statute as a whole, rather than in parts, and we read 
each section in light of all others to produce a harmonious whole.”  We 
presume that the General Assembly purposefully chose particular 
language and therefore construe statutes to avoid surplusage if 
reasonably possible.89 
 
87 Among the powers, duties, and functions the SEBC is granted, Section 5210 details that the 
SEBC shall: “(1) Control and management of the State employees group health insurance program 
provided for in this chapter.  (2) Authority to establish the State employees group health insurance 
program on an insured or self-insured basis.  (3) Selection of the carriers or third-party 
administrators deemed to offer the best plan to satisfy the interests of the State and its employees 
and pensioners in carrying out the intent of this chapter.  (4) Authority to adopt rules and 
regulations for the general administration of the State employees group health insurance program.  
(5) Authority to make and enter into any and all contracts with any agency of the State, or any 
outside agency, for the purpose of assisting in the general administration of this chapter. . . .” 29 
Del. C. § 5210(1)–(5). 
88 Sussex Cty. Dep’t of Elections v. Sussex Cty. Republican Comm., 58 A.3d 418, 422 (Del. 2013). 
89 Id. (footnotes omitted). 
 
23 
 
“[U]ndefined code terms must be construed according to their common and 
approved usage,”90 and this Court regularly refers to dictionaries in defining code 
terms.91 
 
In Free-Flow, this Court addressed the scope of the APA and recognized that 
not all agency actions fall within the Act.92  Our decision in Free-Flow offers a 
helpful framework for this appeal.  First,  
as a general rule, when an agency adopts a regulation, it must comply 
with the APA's procedures for adopting a regulation; and when an 
agency decides whether a named party is violating a law or regulation, 
it must comply with the APA's procedures for case decisions. But, when 
an agency carries out other functions, as when it implements a specific 
and detailed statutory directive, it may operate outside the scope of the 
APA.93 
 
Second, whether an agency action is a regulation does not depend on the label given 
to it by the agency.94 
 
90 Moore v. Wilm. Hous. Auth., 619 A.2d 1166, 1173 (Del. 1993). 
91 See, e.g., Id. at 1174 (citing WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY (1986) for the 
definitions of the words “building” and “public” to define the code term “public building”). 
92 Free-Flow, 861 A.2d at 1236. 
93 Id. 
94 Baker v. Delaware Dep’t of Nat. Res. & Envtl. Control, 2015 WL 5971784, at *13 (Del. Super. 
Oct. 7, 2015), aff’d, 137 A.3d 122 (Del. 2016) (agency action that meets the broad definition of 
regulation “must be subject to the rigors of the APA whether they are located in documents 
captioned ‘Regulations’ or whether they are contained in some other document”); Christina Educ. 
Ass’n v. Delaware State Bd. of Educ., 1994 WL 637000, at *4 (Del. Super. May 25, 1994) (action 
designated by agency as a “calendar change” was a de facto regulation). 
 
24 
 
Free-Flow did not, however, further explore the meaning of “regulation,” and 
we therefore turn to that question now.  The APA’s definition of “regulation” 
contains three parts that are relevant to the parties’ dispute.  “Regulation” means any 
[(1)] statement of law, procedure, policy, right, requirement or prohibition [(2)] 
formulated and promulgated by an agency [(3)] as a rule or standard, or as a guide 
for the decision of cases . . .” 95  Each of these elements must be satisfied for an 
agency action to be a regulation. 
First, a regulation must be a “statement of law, procedure, policy, right, 
requirement or prohibition.”96  Appellees urge that the SEBC’s selection of a 
Medicare Advantage plan was a “policy” because that action—if implemented—
would affect many people and would be “substantively transformational.”97  
Specifically, Appellees emphasize the “drastic, adverse consequences on Retiree 
healthcare rights” that the switch to Medicare Advantage would have, concluding 
that the decision therefore is a “policy.”98  But this argument raises more questions 
than it answers.  Focusing on the effect of an agency’s decision seems to us 
 
95 29 Del. C. § 10102(7) (emphasis added).  The parties do not substantively engage on the second 
part of the definition, the issue of whether the SEBC’s actions were formulated and promulgated 
by an agency, and this factor therefore is not an element in our decision. 
96 Id. 
97 Appellees’ Answering. Br. at 37, 39. 
98 Id. at 1. See Oral Argument at 27:28–27:58 (“It was a significant difference from Medicare. . . . 
[it] impose[d] a lot of rules that are in the papers about prior authorizations out of network, [] out-
of-pocket expenses and things like that.  This was major.”). 
 
25 
 
subjective and unwieldy.  If the meaning of policy depends on an agency action’s 
ultimate effect, the agency would be required to know and weigh from the outset the 
effect of any proposed action.  That standard also would require an agency to predict 
how different people or groups would be affected, which will vary from case to case. 
Generally, a “policy” is defined as “a definite course or method of action 
selected from among alternatives and in light of given conditions to guide and 
determine present and future decisions” or “a high-level overall plan embracing the 
general goals and acceptable procedures especially of a governmental body.”99  The 
SEBC’s decision does not easily satisfy this meaning of “policy.”  To the contrary, 
29 Del. C. § 5203 expressly permits the SEBC to adopt a Medicare part C plan.100  
This specific statutory directive, which authorizes the challenged agency action, 
undermines Appellees’ position that this was a policy decision made by the SEBC.101  
Instead, the SEBC selected a type of plan from a list of options chosen by the General 
 
99 Policy, Merriam-Webster (2024) https://www.merriam-webster.com/dictionary/policy (Mar. 
14, 2024) (emphasis added). 
100 29 Del. C. § 5203(a)–(b) (“(a) The basic health care insurance plan for state employees shall be 
equivalent to the ‘minimum creditable coverage’ as defined by applicable federal law and include 
coverage for contraceptive methods under § 5203A of this title. . . . (b) The plan shall be for regular 
employees and eligible pensioners under 65 years of age and for employees and eligible pensioners 
over 65 years of age who are not entitled to services, rights or benefits under the federal Medicare 
Program (U.S. Public Law 89-97, as amended) [42 U.S.C. § 1395 et seq.]; and a plan which is 
supplemental to Medicare parts A and B, or constructed as a plan under Medicare part C, for 
eligible pensioners entitled to services, rights or benefits under the federal Medicare Program.”). 
101 This is consistent with Free-Flow, where this Court held that “[w]e disagree with the premise 
that all of what an agency does must culminate in a regulation or case decision.”  Free-Flow, 861 
A.2d at 1236. 
 
26 
 
Assembly.  Free-Flow establishes that “when an agency . . . implements a specific 
and detailed statutory directive, it may operate outside the scope of the APA.”102  
Here, the actions that the SEBC took when selecting a plan arguably were consistent 
with Free-Flow’s determination of when an agency action falls outside the APA’s 
scope.  Ultimately, however, we need not determine whether the SEBC’s action was 
a “policy” because, in any event, the challenged decision was not a “rule or 
standard.” 
 
The third part of the definition of “regulation” requires the agency action to 
be one that qualifies “as a rule or standard, or as a guide for the decision of cases 
thereafter . . .” 103  Appellees did not address in their brief and could not coherently 
answer at oral argument how the SEBC’s action to select a Medicare plan would be 
used “as a guide for the decision of cases thereafter.”  Instead, Appellees asserted, if 
obliquely, that the action was a “rule or standard.”  Appellees did not, however, 
engage with the plain meaning of those words, retreating instead to their focus on 
the significant (negative) effects felt by State retirees as a result of the SEBC’s 
action. 
 
102 Id. 
103 29 Del. C. § 10102(7) (emphasis added). 
 
27 
 
 
Merriam-Webster defines a “rule” as “a prescribed guide for conduct or 
action” or a “regulating principle.”104  “Standard” is defined as “something 
established by authority, custom, or general consent as a model or example.”105  Both 
words require the agency action to guide, regulate, or act as a model for future action.  
The SEBC’s adoption of a particular health plan permitted by statute does not meet 
any of these definitions.  To the contrary, the adoption of a particular plan, authorized 
in advance by the General Assembly, does not dictate future agency action and may 
be revisited in the future as the SEBC deems appropriate.  Because the agency action 
was not a “rule or standard,” it was not a regulation under the APA, and the Superior 
Court lacked jurisdiction to stay that action under Title 29, Section 10144. 
B. 
The cross-appeal challenging the Superior Court’s attorneys’ fee ruling 
is moot. 
On cross-appeal, Appellees contend that the Superior Court abused its 
discretion by not considering and granting an award of attorneys’ fees to 
Appellees.106  Specifically, Appellees argue that “by stopping [Appellants’] 
unilateral conversion of retirees’ healthcare plan to Medicare Advantage, 
[Appellees] achieved a substantial common benefit that merits an award of 
 
104 Rule, Merriam-Webster (2024) https://www.merriam-webster.com/dictionary/rule (Mar. 14, 
2024). 
105 Standard, Merriam-Webster (2024) https://www.merriam-webster.com/dictionary/standard 
(Mar. 14, 2024). 
106 Appellees’ Answering Br. at 44. 
 
28 
 
attorneys’ fees.”107  In response, Appellants contend that Appellees’ application for  
attorneys’ fees was properly rejected by the Superior Court because Appellees never 
pleaded a claim for fees and thereby waived that claim.108  Additionally, Appellants 
argue that the common benefit doctrine is inapplicable.109  At oral argument, 
Appellees withdrew their common benefit argument in light of this Court’s recent 
decision in In re Delaware Public Schools Litigation.110  As such, this opinion does 
not discuss the merits of that argument.  
In addition to their common benefit argument, Appellees maintain that the 
State officials’ “reprehensible conduct” supports an award of fees.111  In response, 
Appellants contend that Appellees’ reliance on the bad-faith exception to the 
American Rule fails because Appellees cannot establish “extraordinary 
circumstances here, nor can they establish by clear and convincing evidence that the 
SEBC acted in subjective bad faith[,]” and as such attorneys’ fees are not 
warranted.112 
 
107 Id. 
108 Appellants’ Reply Br. at 33. 
109 Id. at 34–39. 
110 In re Delaware Pub. Sch. Litig., --- A.3d ---, 2024 WL 332738 (Del. Jan. 30, 2024). 
111 Appellees’ Answering Br. at 50. 
112 Appellants’ Reply Br. at 39–42. 
 
29 
 
Delaware law follows the American Rule, under which litigants are generally 
responsible for paying their own litigation costs.113  Under the American Rule, “a 
prevailing party is responsible for the payment of his own counsel fees in the absence 
of statutory authority or contractual undertaking to the contrary.”114  Courts 
recognize “limited equitable exceptions” to the American Rule, including one for a 
party’s “bad faith” conduct throughout litigation.115   
Here, Appellees’ argument regarding bad faith is moot because fee shifting is 
available only against a losing party in favor of a prevailing party.116  By reversing 
the decision below, fee shifting is foreclosed, and it is not necessary for this Court 
to engage with Appellees’ bad faith arguments.  
IV. 
CONCLUSION 
For the foregoing reasons, we reverse the Superior Court’s order dated 
October 19, 2022 staying implementation of a Medicare Advantage Plan for State 
retirees and the Superior Court’s May 22, 2023 order entering final judgment in this 
case.  
 
113 Mahani, 935 A.2d at 245. 
114 Tandycrafts, Inc. v. Initio Partners, 562 A.2d 1162, 1164 (Del. 1989).   
115 Montgomery Cellular, 880 A.2d at 227. 
116 See Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 245 (1975) (noting that “the 
general ‘American rule’ [is] that the prevailing party may not recover attorneys’ fees as costs or 
otherwise” unless there is an applicable statutory authorization for such an award or the award falls 
within an exception to the American rule).