Case Title: NCM Group Holdings, LLC v. IVI Group Investments, LLC, et al.

Citation: 

Docket Number: 506, 2017

State: delaware

Court: Delaware Supreme Court

Date: 2018-10-01T00:00:00Z

Document:
IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
NCM GROUP HOLDINGS, LLC,  
 
Defendant/Counter- 
Plaintiff Below, 
Appellant, 
 
v. 
 
LVI GROUP INVESTMENTS, LLC,
 
Plaintiff/Counter- 
Defendant Below, 
 
and 
 
NORTHSTAR GROUP HOLDINGS, 
LLC and SCOTT STATE,  
 
Counter-Defendants Below, 
Appellees. 
         
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§  No. 506, 2017 
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§  Court Below—Court of Chancery 
§  of the State of Delaware 
§   
§  C.A. No. 12067 
§   
§ 
§ 
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§ 
§ 
§ 
§ 
§ 
§ 
§ 
§ 
Submitted:  September 26, 2018 
Decided:     October 1, 2018 
 
Before STRINE, Chief Justice; VALIHURA, VAUGHN, SEITZ and 
TRAYNOR, Justices, constituting the Court en banc. 
 
 
ORDER 
 
(1) 
In the Court of Chancery, former stockholders are litigating competing 
fraud claims arising out of a merger of their companies that created Northstar Group 
Holdings LLC.  To address confidentiality issues in document production, the parties 
entered into a protective order, following the form available as part of the Guidelines 
for Best Practices for Litigating Cases Before the Court of Chancery.  The form and 
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the version approved by the Court of Chancery in this litigation contains a restriction 
that discovery material “shall be used solely for purposes of this litigation and shall 
not be used for any other purpose, including … any other litigation or proceedings.”   
(2) 
Late in the litigation, NCM sought to modify the protective order to 
allow it to use information subject to the protective order to file fraud complaints in 
Illinois and New York against former LVI directors and officers who might not be 
subject to personal jurisdiction in Delaware.  According to NCM, without the 
requested amendment, it could not bring fraud claims outside of Delaware against 
the individuals because the claims might be time-barred before the Court of 
Chancery completed trial and NCM’s appellate rights were exhausted.  In a 
November 1, 2017 bench ruling, the Court of Chancery denied NCM’s request, 
finding that it had not shown good cause to modify the protective order.    
(3) 
We granted interlocutory review of the Court of Chancery’s bench 
ruling in part on the strength of NCM’s claim that it would be time-barred from 
bringing its fraud claims after the regular trial and appellate process.  The prejudice 
claimed by NCM was the kind of prejudice that, in the interests of justice, merited 
interlocutory review. 
(4) 
That has turned out not to be the case.  NCM has admitted that it was 
able to file a fraud complaint in New York against defendants who were not at the 
time parties to the Court of Chancery litigation.  On top of that, it failed to notify the 
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Court of Chancery before its bench ruling that it had filed the New York complaint, 
which undermined a substantial basis supporting its motion to amend the protective 
order.  Under the circumstances, interlocutory review is no longer warranted, and 
we do not express an opinion at this time on the merits of the Court of Chancery’s 
bench ruling.            
NOW, THEREFORE, IT IS HEREBY ORDERED that our February 6, 2018 
order accepting this interlocutory appeal is rescinded, and interlocutory review of 
the Court of Chancery’s November 1, 2017 bench ruling is refused.   
 
 
 
 
 
 
 
BY THE COURT: 
 
 
 
 
 
 
 
/s/ Collins J. Seitz, Jr. 
 
 
 
 
 
 
 
           Justice