Title: Icahn Partners, LCP, et al. v. DeSouza, et al.

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
ICAHN PARTNERS LP, ICAHN 
PARTNERS MASTER FUND LP, 
MATSUMURA FISHWORKS LLC, 
derivatively on behalf of 
ILLUMINA, INC., and individually 
on behalf of themselves and all other 
similarly-situated stockholders of 
ILLUMINA, INC., 
 
Plaintiffs Below, 
Appellants, 
 
v. 
 
FRANCIS DESOUZA, JOHN W. 
THOMPSON, FRANCIS ARNOLD, 
CAROLINE DORSA, ROBERT 
EPSTEIN, SCOTT GOTTLIEB, 
GARY GUTHART, PHILIP 
SCHILLER, and SUSAN SIEGEL, 
 
Defendants Below, 
Appellees 
 
and 
 
ILLUMINA, INC., 
Nominal Defendant Below, 
Appellee. 
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§  No. 107, 2024 
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§  Court Below—Court of Chancery  
§  of the State of Delaware 
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§  C.A. No. 2023-1045 
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  Submitted:    March 28, 2024 
 
 
 
 
   Decided:       April 11, 2024  
 
Before SEITZ, Chief Justice; VALIHURA and TRAYNOR, Justices. 
 
ORDER 
 
 
2 
 
 
After consideration of the notice and supplemental notice of interlocutory 
appeal and the exhibits, it appears to the Court that: 
(1) 
This interlocutory appeal arises from Icahn Partners LP, Icahn Partners 
Master Fund LP, and Matsumura Fishworks LLC’s (“Icahn Parties”) filing of a class 
and derivative complaint against current and former directors of nominal defendant 
Illumina, Inc.  Illumina moved to strike portions of the complaint, contending that 
those portions contained confidential and privileged information that an Illumina 
director, who was nominated to the board by the Icahn Parties and employed by an 
Icahn-affiliated entity, had improperly shared with the Icahn Parties.  The individual 
defendants joined in the motion to strike.  The Icahn Parties opposed the motion, 
arguing that it was permissible for the Icahn-affiliated director to share Illumina’s 
confidential and privileged information with the Icahn Parties. 
(2) 
In a letter opinion dated January 16, 2024, the Court of Chancery 
granted the motion to strike.1  The court held that the Icahn-affiliated director did 
not have the right to share Illumina’s confidential or privileged information with the 
Icahn Parties.2  As explained by the court, the Icahn-affiliated director’s lack of 
fiduciary role with the Icahn Parties and the Icahn Parties’ lack of contractual rights 
to designate directors to the Illumina board and limited voting power made the case 
 
1 Icahn Parties LP v. Souza, 2024 WL 180952 (Del. Ch. Jan. 16, 2024). 
2 Id. at *4-9. 
3 
 
distinguishable from cases holding a director may share confidential or privileged 
information with a stockholder.3   The court also emphasized that the Icahn-affiliated 
director had not abided by his agreement to comply with Illumina’s Code of 
Conduct, which prohibited the sharing of Illumina’s confidential information with 
others.4  On February 19, 2024, the court denied the Icahn Parties’ motion for 
reargument. 
(3) 
The Icahn Parties filed an application for certification of an 
interlocutory appeal from the January 16, 2024 letter opinion and the February 19, 
2024 order denying reargument (“Interlocutory Rulings”).  Illumina and the 
individual defendants opposed the application.  On March 20, 2024, the Court of 
Chancery refused the application for certification.    
(4) 
In refusing certification, the Court of Chancery first found that striking 
allegations from a pleading did not decide a substantial issue of material importance 
meriting appellate review before final judgment.  The court next considered the Rule 
42(b)(iii) criteria that the Icahn Parties identified as supporting interlocutory review.  
As to Rule 42(b)(iii)(A) (question of law resolved for the first time), the court held 
that the Interlocutory Rulings did not resolve a question of law for the first time, but 
simply applied existing legal precedent to the facts of the case.  The court next found 
 
3 Id. at *7. 
4 Id. at *9. 
4 
 
that Rule 42(b)(iii)(B) (conflicting trial court decisions on the question of law) did 
not support certification because the Icahn Parties had not identified any cases with 
similar facts that conflicted with the Interlocutory Rulings.  
(5) 
Turning to Rule 42(b)(iii)(G) (interlocutory review may terminate the 
litigation), the court recognized that the striking of allegations in the complaint 
would not terminate the litigation.  The court rejected the Icahn Parties’ contention 
that interlocutory review was appropriate because their complaint might not survive 
a motion to dismiss in the absence of the stricken information and that their 
possession of unique information could disqualify them from acting derivatively.  
The court found these claims speculative, noting that the complaint might survive a 
motion to dismiss and, if it did not, there would be a final judgment to appeal.  As 
to Rule 42(B)(iii)(H) (review of the interlocutory order may serve of considerations 
of justice), the court found that the Icahn Parties had simply rehashed arguments 
already found not to weigh in favor of certification.  Finally, the court balanced its 
consideration of the Rule 42(b)(iii) factors with its assessment that the most efficient 
and just way to resolve the case was to proceed in the ordinary course. 
(6) 
Applications for interlocutory review are addressed to the sound 
discretion of the Court.5  In the exercise of its discretion and giving due weight to 
Court of Chancery’s analysis, this Court has concluded that the application for 
 
5 Supr. Ct. R. 42(d)(v). 
5 
 
interlocutory review does not meet the strict standards  for certification under Rule 
42(b).  We agree with the Court of Chancery that the Rule 42(b)(iii) criteria do not 
weigh in favor of interlocutory review.  Exceptional circumstances that would merit 
interlocutory review of the Interlocutory Rulings do not exist in this case,6 and the 
potential benefits of interlocutory review do not outweigh the inefficiency, 
disruption, and probable costs caused by an interlocutory appeal.7 
NOW, THEREFORE, IT IS ORDERED that the interlocutory appeal is 
REFUSED.   
BY THE COURT: 
 
 
 
 
 
 
/s/ Karen L. Valihura 
 
 
 
 
 
Justice 
 
6 Id. R. 42(b)(ii). 
7 Id. R. 42(b)(iii).