Title: Sandys v. Pincus, et al.

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
THOMAS SANDYS, Derivatively on  
 
§  
Behalf of ZYNGA INC., 
 
§  No. 157, 2016 
 
 
 
§  
 
Plaintiff below, Appellant, 
 
§  Court Below: Court of 
 
 
 
§  Chancery of the State of 
 
v.   
 
§  Delaware 
 
 
 
§  
MARK J. PINCUS, REGINALD D. DAVIS, 
§  C.A. No. 9512-CB 
CADIR B. LEE, JOHN SCHAPPERT, DAVID §  
M. WEHNER, MARK VRANESH, WILLIAM §  
GORDON, REID HOFFMAN, JEFFREY 
§  
KATZENBERG, STANLEY J. MERESMAN, §  
SUNIL PAUL and OWEN VAN NATTA,  
§  
 
 
 
§ 
 
Defendants below, Appellees, 
 
§ 
 
 
 
 
§ 
 
and 
 
§ 
 
 
 
§ 
ZYNGA INC., a Delaware Corporation,   
§ 
 
 
 
§  
 
 
Nominal Defendant below,  
 
§  
 
Appellee. 
 
§  
 
 
 
   
Submitted: October 13, 2016 
Decided: 
December 5, 2016 
 
Before STRINE, Chief Justice; HOLLAND, VALIHURA, VAUGHN, and 
SEITZ, Justices, constituting the Court en Banc.  
 
Upon appeal from the Court of Chancery.  REVERSED. 
 
Norman M. Monhait, Esquire, P. Bradford deLeeuw, Esquire, Rosenthal, Monhait 
& Goddess, P.A., Wilmington, Delaware; Jeffrey S. Abraham, Esquire, (Argued), 
Philip T. Taylor, Esquire, Abraham, Fruchter & Twersky, LLP, New York, New 
York, Attorneys for Plaintiff-Below, Appellant, Thomas Sandys. 
 
 
 
Elena C. Norman, Esquire, Nicholas J. Rohrer, Esquire, Paul J. Loughman, 
Esquire, Young Conaway Stargatt & Taylor LLP, Wilmington, Delaware; Jordan 
Eth, Esquire, Anna Erickson White, Esquire, (Argued), Morrison & Foerster LLP, 
San Francisco, California, Attorneys for Defendants-Below, Appellees, Mark J. 
Pincus, Reginald D. Davis, Cadir B. Lee, John Schappert, David M. Wehner, Mark 
Vranesh, and Owen Van Natta, and Zynga Inc.  
 
Bradley D. Sorrels, Esquire, Jessica A Montellese, Esquire, Wilson Sonsini 
Goodrich & Rosati, P.C., Wilmington, Delaware; Steven M. Schatz, Esquire, 
(Argued), Nina (Nicki) Locker, Esquire, Benjamin M. Crosson, Esquire, Wilson 
Sonsini Goodrich & Rosati, P.C., Palo Alto, California, Attorneys for Defendants-
Below, Appellees, William Gordon, Reid Hoffman, Jeffrey Katzenberg, Stanley J. 
Meresman, and Sunil Paul.  
 
 
 
STRINE, Chief Justice, for the Majority: 
 
 
I. 
  
 
This appeal in a derivative suit brought by a stockholder of Zynga, Inc. turns 
on whether the Court of Chancery correctly found that a majority of the Zynga 
board could impartially consider a demand and thus correctly dismissed the 
complaint for failure to plead demand excusal under Court of Chancery Rule 23.1.  
This case again highlights the wisdom of the representative plaintiff bar heeding 
the repeated admonitions of this Court and the Court of Chancery to make a 
diligent pre-suit investigation into the board‘s independence so that a complaint 
can be filed satisfying the burden to plead particularized facts supporting demand 
excusal.  Here, the derivative plaintiff‘s lack of diligence compounded the already 
difficult task that the Court of Chancery faces when making close calls about 
pleading stage independence.  Fortunately for the derivative plaintiff, however, he 
was able to plead particularized facts regarding three directors that create a 
reasonable doubt that these directors can impartially consider a demand.  First, the 
plaintiff pled a powerful and unusual fact about one director‘s relationship to 
Zynga‘s former CEO and controlling stockholder which creates a reasonable doubt 
that she can impartially consider a demand adverse to his interests.  That fact is 
that the controlling stockholder and the director and her husband co-own an 
unusual asset, an airplane, which is suggestive of an extremely intimate personal 
friendship between their families.  Second, the plaintiff pled that two other 
2 
 
directors are partners at a prominent venture capital firm and that they and their 
firm not only control 9.2% of Zynga‘s equity as a result of being early-stage 
investors, but have other interlocking relationships with the controller and another 
selling stockholder outside of Zynga.  Although it is true that entrepreneurs like the 
controller need access to venture capital, it is also true that venture capitalists 
compete to fund the best entrepreneurs and that these relationships can generate 
ongoing economic opportunities.  There is nothing wrong with that, as that is how 
commerce often proceeds, but these relationships can give rise to human 
motivations compromising the participants‘ ability to act impartially toward each 
other on a matter of material importance.  Perhaps for that reason, the Zynga board 
itself determined that these two directors did not qualify as independent under the 
NASDAQ rules, which have a bottom line standard that a director is not 
independent if she has ―a relationship which, in the opinion of the Company‘s 
board of directors, would interfere with the exercise of independent 
judgment . . . .‖1  Although the plaintiff‘s lack of diligence made the determination 
as to these directors perhaps closer than necessary, in our view, the combination of 
these facts creates a pleading stage reasonable doubt as to the ability of these 
directors to act independently on a demand adverse to the controller‘s interests. 
When these three directors are considered incapable of impartially considering a 
                                                          
 
1 NASDAQ Marketplace Rule 5605(a)(2). 
3 
 
demand, a majority of the nine member Zynga board is compromised for Rule 23.1 
purposes and demand is excused.  Thus, the dismissal of the complaint is reversed. 
II. 
 
 
The plaintiff alleges two derivative claims, each centering on allegations that 
certain top managers and directors at Zynga—including its former CEO, 
Chairman, and controlling stockholder Mark Pincus—were given an exemption to 
the company‘s standing rule preventing sales by insiders until three days after an 
earnings announcement.  According to the plaintiff, top Zynga insiders sold 20.3 
million shares of stock for $236.7 million as part of a secondary offering before 
Zynga‘s April 26, 2012 earnings announcement, an announcement that the plaintiff 
contends involved information that placed downward pressure on Zynga‘s stock 
price.2  The plaintiff alleges that these insiders sold their shares at $12.00 per share 
and that, immediately after the earnings announcement, the market price dropped 
9.6% to $8.52.  Three months later, following the release of additional negative 
information, which the plaintiff alleges was known by Zynga management and the 
board when it granted the exemption, Zynga‘s market price declined to $3.18, a 
decrease of 73.5% from the $12.00 per share offering price.  In this suit, the 
plaintiff alleges that the insiders who participated in the sale breached their 
                                                          
 
2 These shares were sold as part of a secondary public offering that increased Zynga‘s public 
float, which at that time consisted of fewer than 150 million shares, compared to approximately 
688 million shares held by Zynga directors, officers, employees, former employees, and other 
pre-IPO investors.  Appellee‘s Answering Br. at 7. 
4 
 
fiduciary duties by misusing confidential information when they sold their shares 
while in possession of adverse, material non-public information and also asserts a 
duty of loyalty claim against the directors who approved the sale.  
 
The defendants moved to dismiss this action under Court of Chancery Rule 
23.1 for plaintiff‘s failure to make a pre-suit demand on the board.3  The Court of 
Chancery‘s decision turned on its evaluation of the pleading stage independence of 
the Zynga board at the time the complaint was filed,4 which was comprised of the 
following nine directors: Mark Pincus, Reid Hoffman, Jeffrey Katzenberg, Stanley 
J. Meresman, William Gordon, John Doerr, Ellen Siminoff, Sunil Paul, and Don 
Mattrick.  In addressing demand excusal, the Court of Chancery applied the 
standard set forth in this Court‘s decision in Rales v. Blasband5 to determine if at 
least five of Zynga‘s nine directors were independent for pleading stage purposes.  
The Court of Chancery first determined that the two directors who participated in 
the transaction, Pincus and Hoffman, were interested in the transaction, and 
therefore could not impartially consider a demand.6  The Court of Chancery then 
                                                          
 
3 See Ct. Ch. R. 23.1 (―The complaint shall also allege with particularity the efforts, if any, made 
by the plaintiff to obtain the action the plaintiff desires from the directors or comparable 
authority and the reasons for the plaintiff‘s failure to obtain the action or for not making the 
effort.‖). 
4 Rales v. Blasband, 634 A.2d 927, 934 (Del. 1993) (noting that demand futility is assessed at the 
time the complaint is filed).  
5 Id.  
6 Although the defendants assert that the Court of Chancery did not reach this conclusion, we 
disagree.  The Court of Chancery conducted a simple analysis finding Pincus and Hoffman 
interested in the transaction when it stated: 
5 
 
examined the independence of directors Katzenberg, Meresman, Gordon, Doerr, 
and Siminoff.  The Court of Chancery found that all five of these directors were 
independent and thus, that demand was not excused.  The Court of Chancery did 
not analyze the independence of directors Paul and Mattrick.  But, the Court of 
Chancery did include a footnote stating that it ―would reach the same conclusion 
regarding Paul, who did not participate in the Secondary Offering or even vote to 
approve it.‖7  At the time of the complaint, Mattrick had replaced Pincus as CEO.  
The remaining seven directors were outsiders. 
 
The Court of Chancery properly determined that directors Pincus and 
Hoffman were interested in the transaction.  Furthermore, Mattrick is Zynga‘s 
CEO.  Zynga‘s controlling stockholder, Pincus, is interested in the transaction 
under attack, and therefore, Mattrick cannot be considered independent.  Thus, the 
question for us is whether the plaintiff pled particularized facts that create a 
reasonable doubt about the independence of two of the remaining six Zynga 
                                                                                                                                                                                           
Because Hoffman and Pincus are the only members of the Demand Board who 
sold shares in the Secondary Offering and received a benefit from the alleged 
wrongdoing, they are the only members of the Demand Board who face potential 
liability under Brophy. Consequently, the other seven directors on the Demand 
Board are not interested in Count I for purposes of the Rales test, and I need only 
to determine whether plaintiff has created a reasonable doubt about their 
independence. 
Sandys v. Pincus, 2016 WL 769999, at *7 (Del. Ch. Feb. 29, 2016). 
7 Id. at *14 n.70.  
6 
 
directors.8  If the plaintiff convinces us that he did, then we must reverse the Court 
of Chancery‘s dismissal under Rule 23.1.  We review this question de novo.9   
 
On appeal, neither party contests the applicability of the Rales standard 
employed by the Court of Chancery.  Therefore, we use it in our analysis to 
determine whether the Court of Chancery erred in finding that a majority of the 
board was independent for pleading stage purposes.  To plead demand excusal 
under Rales, the plaintiff must plead particularized factual allegations that ―create a 
reasonable doubt that, as of the time the complaint [was] filed, the board of 
directors could have properly exercised its independent and disinterested business 
judgment in responding to a demand.‖10  At the pleading stage, a lack of 
independence turns on ―whether the plaintiffs have pled facts from which the 
director‘s ability to act impartially on a matter important to the interested party can 
be doubted because that director may feel either subject to the interested party‘s 
dominion or beholden to that interested party.‖11  ―Our law requires that all the 
pled facts regarding a director‘s relationship to the interested party be considered 
in full context in making the, admittedly imprecise, pleading stage determination of 
                                                          
 
8 The plaintiff does not dispute the Court of Chancery‘s finding that directors Katzenberg and 
Meresman are independent. 
9 Del. Cty. Emps. Ret. Fund v. Sanchez, 124 A.3d 1017, 1021 (Del. 2015); Beam v. Stewart, 845 
A.2d 1040, 1048 (Del. 2004). 
10 Rales, 634 A.2d at 934.   
11 Sanchez, 124 A.3d at 1024 n.25. 
7 
 
independence.‖12  ―[A]lthough the plaintiff is bound to plead particularized facts in 
pleading a derivative complaint, so too is the court bound to draw all inferences 
from those particularized facts in favor of the plaintiff, not the defendant, when 
dismissal of a derivative complaint is sought.‖13   
 
For many years, this Court and the Court of Chancery have advised 
derivative plaintiffs to take seriously their obligations to plead particularized facts 
justifying demand excusal.14  This case presents the unusual situation where a 
plaintiff who sought books and records to plead his complaint somehow only asked 
for records relating to the transaction he sought to redress and did not seek any 
books and records bearing on the independence of the board.15  Furthermore, 
although purporting to be a fitting representative for investors in a technology 
company, the plaintiff appears to have forgotten that one of the most obvious tools 
at hand is the rich body of information that now can be obtained by conducting an 
internet search.16  As a result of the plaintiff‘s failure, he made the task of the Court 
                                                          
 
12 Id. at 1022.  
13 Id.  
14 See, e.g., Rales, 634 A.2d at 934 n.10; Brehm v. Eisner, 746 A.2d 244, 266-67 (Del. 2000);  
Guttman v. Huang, 823 A.2d 492, 504 (Del. Ch. 2003); Ash v. McCall, 2000 WL 1370341, at 
*15 n.56 (Del. Ch. Sept. 15, 2000). 
15 Verified Complaint Pursuant to 8 Del. C. § 220, Sandys v. Zynga Inc., C.A. No. 8450-ML 
(Del. Ch.). 
16 Of course, as with any source of information, including a traditional library, the internet should 
be used with care.  Ultimately, any fact pleading has to be based on a source that provides a good 
faith basis for asserting a fact.  Thus, as with any search, an internet search will only have utility 
if it generates information of a reliable nature.  But with that key caveat in mind, we can take 
judicial notice that internet searches can generate articles in reputable newspapers and journals, 
8 
 
of Chancery more difficult than was necessary and hazarded an adverse result for 
those he seeks to represent.  Despite that failure, the plaintiff did plead some 
particularized facts and we are bound to draw all reasonable inferences from those 
facts in the plaintiff‘s favor in determining whether dismissal was appropriately 
granted.17   
A.  
 
In conducting this analysis, we first focus on director Ellen Siminoff.  The 
Court of Chancery found that Siminoff was independent even though she and her 
husband co-own a private airplane18 with Pincus.19  In his complaint, the plaintiff 
pled that ―Siminoff and her husband have an existing business relationship with 
defendant Pincus as co-owners of a private airplane,‖20 and in his briefing in the 
Court of Chancery, the plaintiff characterized Siminoff as a ―close family friend‖ 
of Pincus,21 which the Court of Chancery took into account as if it was a pled 
                                                                                                                                                                                           
postings on official company websites, and information on university websites that can be the 
source of reliable information. 
17 Sanchez, 124 A.3d at 1022. 
18 During oral arguments, there was a question raised by the Court over whether this was an 
airplane or a jet.  The plaintiff‘s lawyer proceeded to characterize it as a jet during his rebuttal.  
But, Zynga‘s Proxy Statement and the plaintiff‘s complaint both state ―private airplane,‖ and 
therefore we call it an airplane.  Regardless of whether it is an airplane or a jet, we reach the 
same conclusion.   
19 Zynga, Inc. Definitive Proxy Statement (Form 14A), at 1 (Apr. 25, 2013) (noting that Ms. 
Siminoff, her spouse, and Mr. Pincus ―co-own a small private airplane, which was not used for 
Company travel‖). 
20 App. to Appellant‘s Opening Br. at A071 (Verified Shareholder Derivative Complaint).  
21 Id. at A145. 
9 
 
fact.22  Had the plaintiff been more thorough in his research by using all of the 
―tools at hand,‖23 including the tool provided by the company whose name has 
become a verb—or another internet search engine—he likely would have 
discovered more information about Siminoff‘s relationship with Pincus.  Not only 
was the plaintiff‘s research cursory, the plaintiff did not focus on the most likely 
inference from the co-ownership of the private airplane between Pincus and 
Siminoff—which is not that the private airplane was a business venture—but that it 
signaled an extremely close, personal bond between Pincus and Siminoff, and 
between their families.  Thus, the Court of Chancery was stuck with the limited 
factual allegations made by the plaintiff and, citing our decision in Beam v. 
Stewart,24 the Court of Chancery determined that these allegations of friendship 
and shared ownership of an asset were not enough to create a reasonable pleading 
                                                          
 
22 Sandys, 2016 WL 769999, at *8.  
23 See, e.g., Rales v. Blasband, 634 A.2d 927, 935 n.10 (1993).  This Court noted that although 
derivative plaintiffs may believe it is difficult to meet the particularization requirement in their 
pleadings: 
[They] have many avenues available to obtain information bearing on the subject 
of their claims. For example, there is a variety of public sources from which the 
details of a corporate act may be discovered, including the media and 
governmental agencies such as the Securities and Exchange Commission. In 
addition, a stockholder who has met the procedural requirements and has shown a 
specific proper purpose may use the summary procedure embodied in 8 Del. C. 
§ 220 to investigate the possibility of corporate wrongdoing.   
Id.  
24 845 A.2d 1040 (Del. 2004).  
10 
 
stage inference that Siminoff could not act impartially in considering a demand 
implicating Pincus.25 
 
Although we acknowledge the difficult position that the Court of Chancery 
was placed in, we reach a different conclusion.  The Siminoff and Pincus families 
own an airplane together.  Although the plaintiff made some strained arguments 
below, it made one argument in relation to this unusual fact that does create a 
pleading stage inference that Siminoff cannot act independently of Pincus.  That 
argument is that owning an airplane together is not a common thing, and suggests 
that the Pincus and Siminoff families are extremely close to each other and are 
among each other‘s most important and intimate friends.  Co-ownership of a 
private plane involves a partnership in a personal asset that is not only very 
expensive, but that also requires close cooperation in use, which is suggestive of 
detailed planning indicative of a continuing, close personal friendship.  In fact, it is 
suggestive of the type of very close personal relationship that, like family ties, one 
would expect to heavily influence a human‘s ability to exercise impartial 
judgment.26  As we noted recently, although a plaintiff has a pleading stage burden 
                                                          
 
25 Sandys, 2016 WL 769999, at *8. 
26 See In re MFW S’holders Litig., 67 A.3d 496, 509 n.37 (Del. Ch. 2013), aff’d sub nom. Kahn 
v. M & F Worldwide Corp., 88 A.3d 635 (Del. 2014) (noting that if a friendship ―was one where 
the parties had served as each other‘s maids of honor, had been each other‘s college roommates, 
shared a beach house with their families each summer for a decade, and are as thick as blood 
relations, that context would be different from parties who occasionally had dinner over the 
years, go to some of the same parties and gatherings annually, and call themselves ‗friends‘‖); 
Del. Cty. Emps. Ret. Fund v. Sanchez, 124 A.3d 1017, 1022 (Del. 2015) (finding that a director 
11 
 
that is elevated in the demand excusal context, that standard does not require a 
plaintiff to plead a detailed calendar of social interaction to prove that directors 
have a very substantial personal relationship rendering them unable to act 
independently of each other.27  A plaintiff is only required to plead facts supporting 
an inference28—or in the words of Rales, ―create a reasonable doubt‖29—that a 
director cannot act impartially.  Here, the facts support an inference that Siminoff 
would not be able to act impartially when deciding whether to move forward with 
a suit implicating a very close friend with whom she and her husband co-own a 
private plane.   
B.  
 
We next turn to the plaintiff‘s argument that he created a reasonable doubt 
that two other directors—William Gordon and John Doerr—are not independent 
for pleading stage purposes.  In his complaint, the plaintiff included the following 
facts pertaining to Gordon and Doerr: both are partners at Kleiner Perkins Caufield 
& Byers,30 which controls approximately 9.2% of Zynga‘s equity;31 and, Kleiner 
Perkins is also invested in One Kings Lane, a company that Pincus‘s wife co-
                                                                                                                                                                                           
was not independent for pleading stage purposes because the director had a friendship of over 50 
years with an interested party and the director‘s primary employment was as an executive of a 
company over which the interested party had substantial influence). 
27 124 A.3d at 1020–22. 
28 Id. at 1019.  
29 Rales, 634 A.2d at 934. 
30 App. to Appellant‘s Opening Br. at A071 (Verified Shareholder Derivative Complaint). 
31 Id. at A020. 
12 
 
founded.32  Not only that, defendant Reid Hoffman—an outside director of Zynga 
who was one of the directors and officers given an exemption to sell in the 
secondary offering—and Kleiner Perkins both have investments in Shopkick, Inc., 
and Hoffman serves on that company‘s board along with yet another partner at 
Kleiner Perkins.33  These relationships, suggest the plaintiff, indicate that Gordon 
and Doerr have a mutually beneficial network of ongoing business relations with 
Pincus and Hoffman that they are not likely to risk by causing Zynga to sue them.  
Amplifying this argument, says the plaintiff, is the voice of Gordon‘s and Doerr‘s 
fellow Zynga directors who did not consider them to be independent directors.   
According to its own public disclosures, the Zynga board determined that Gordon 
and Doerr do not qualify as independent directors under the NASDAQ Listing 
Rules.34  Importantly, however, Zynga did not disclose why its board made this 
determination,35 and the plaintiff failed to request this information in its books and 
records demand.36   
 
Despite these factual allegations, the Court of Chancery found that Gordon 
and Doerr were independent for pleading stage purposes because the plaintiff 
failed to specifically allege why Gordon and Doerr lack independence under the 
                                                          
 
32 Id. at A072. 
33 Id.  
34 Id. 
35 Zynga, Inc. Definitive Proxy Statement (Form 14A), at 1 (Apr. 25, 2013). 
36 Verified Complaint Pursuant to 8 Del. C. § 220, Sandys v. Zynga Inc., C.A. No. 8450-ML 
(Del. Ch.). 
13 
 
NASDAQ rules, and the other circumstances pled by the plaintiff were 
―insufficient to question their independence under Delaware law.‖37  In so ruling, 
the Court of Chancery seemed to place heavy weight on the presumptive 
independence of directors under our law.38  But, to have a derivative suit dismissed 
on demand excusal grounds because of the presumptive independence of directors 
whose own colleagues will not accord them the appellation of independence 
creates cognitive dissonance that our jurisprudence should not ignore.   
 
We agree with the Court of Chancery that the Delaware independence 
standard is context specific and does not perfectly marry with the standards of the 
stock exchange in all cases,39 but the criteria NASDAQ has articulated as bearing 
on independence are relevant under Delaware law and likely influenced by our 
law.40  The NASDAQ rules outline the following list of relationships that 
automatically preclude a finding of independence:  
(A) 
 
a director who is, or at any time during the past three years was, 
 
employed by the Company; 
 
(B) 
 
a director who accepted or who has a Family Member who 
 
accepted any compensation from the Company in excess of 
 
$120,000 during any period of twelve consecutive months 
                                                          
 
37 Sandys, 2016 WL 769999, at *10. 
38 Id.  
39 Id. at *9. 
40 See In re MFW S’holders Litig., 67 A.3d at 510 (noting that stock exchange rules governing 
director independence ―were influenced by experience in Delaware and other states and were the 
subject of intensive study by expert parties‖ and ―[t]hey cover many of the key factors that tend 
to bear on independence . . . and they are a useful source for this court to consider when 
assessing an argument that a director lacks independence‖). 
14 
 
 
within the three years preceding the determination of 
 
independence, other than the following: 
 
(i) 
compensation for board or board committee 
service; 
 
(ii) 
compensation paid to a Family Member who is an 
employee (other than an Executive Officer) of the 
Company; or 
 
(iii) 
benefits under a tax-qualified retirement plan, or 
non-discretionary compensation. 
 
 
Provided, however, that in addition to the requirements 
 
contained in this paragraph (B), audit committee members are 
 
also subject to additional, more stringent requirements under 
 
Rule 5605(c)(2). 
 
(C) 
 
a director who is a Family Member of an individual who is, or 
 
at any time during the past three years was, employed by the 
 
Company as an Executive Officer; 
 
(D) 
 
a director who is, or has a Family Member who is, a partner in, 
 
or a controlling Shareholder or an Executive Officer of, any 
 
organization to which the Company made, or from which the 
 
Company received, payments for property or services in the 
 
current or any of the past three fiscal years that exceed 5% of 
 
the recipient‘s consolidated gross revenues for that year, or 
 
$200,000, whichever is more, other than the following: 
 
(i) 
payments arising solely from investments in the 
Company‘s securities; or 
 
(ii) 
payments 
under 
non-discretionary 
charitable 
contribution matching programs. 
 
(E) 
 
a director of the Company who is, or has a Family Member 
 
who is, employed as an Executive Officer of another entity 
 
where at any time during the past three years any of the 
15 
 
 
Executive Officers of the Company serve on the compensation 
 
committee of such other entity; or 
 
(F) 
  a director who is, or has a Family Member who is, a current 
 
partner of the Company‘s outside auditor, or was a partner or 
 
employee of the Company‘s outside auditor who worked on the 
 
Company‘s audit at any time during any of the past three years. 
 
(G)  in the case of an investment company, in lieu of paragraphs 
 
(A)-(F), a director who is an ―interested person‖ of the 
 
Company as defined in Section 2(a)(19) of the Investment 
 
Company Act of 1940, other than in his or her capacity as a 
 
member of the board of directors or any board committee.41 
 
Most importantly, under the NASDAQ rules there is a fundamental determination 
that a board must make to classify a director as independent, a determination that is 
also relevant under our law.  The bottom line under the NASDAQ rules is that a 
director is not independent if she has a ―relationship which, in the opinion of the 
Company‘s board of directors, would interfere with the exercise of independent 
judgment in carrying out the responsibilities of a director.‖42  The NASDAQ rules‘ 
focus on whether directors can act independently of the company or its managers 
has important relevance to whether they are independent for purposes of Delaware 
law.  Our law is based on the sensible intuition that deference ought to be given to 
the business judgment of directors whose interests are aligned with those of the 
company‘s stockholders.43  Precisely because of that deference, if our law is to 
                                                          
 
41 NASDAQ Marketplace Rule 5605(a)(2).  
42 Id.  
43 See Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984) (―The business judgment rule is an 
acknowledgment of the managerial prerogatives of Delaware directors under Section 141(a).  It 
16 
 
have integrity, Delaware must be cautious about according deference to directors 
unable to act with objectivity.  To consider directors independent on a Rule 23.1 
motion generates understandable skepticism in a high-salience context where that 
determination can short-circuit a merits determination of a fiduciary duty claim. 
 
We presume that the Zynga board did not lightly classify Gordon and Doerr 
as having a ―relationship which, in the opinion of the Company‘s board of 
directors, would interfere with the exercise of independent judgment in carrying 
out the responsibilities of a director.‖44  And, although we do not know the exact 
reason the board made this determination,45 we do know this.  In the case of a 
company like Zynga, which has a controlling stockholder, Pincus, who wields 61% 
of the voting power, if a director cannot be presumed capable of acting 
independently because the director derives material benefits from her relationship 
with the company that could weigh on her mind in considering an issue before the 
board, she necessarily cannot be presumed capable of acting independently of the 
company‘s controlling stockholder.  That a director sits on a controlled company 
                                                                                                                                                                                           
is a presumption that in making a business decision the directors of a corporation acted on an 
informed basis, in good faith and in the honest belief that the action taken was in the best 
interests of the company.‖). 
44 NASDAQ Marketplace Rule 5605(a)(2). 
45 The Proxy Statement states that ―the Board has affirmatively determined that Messrs. 
Hoffman, Katzenberg, Meresman and Paul and Ms. Siminoff do not have any relationships that 
would interfere with the exercise of independent judgment in carrying out the responsibilities of 
a director and that each of these directors is ‗independent,‘‖ without further explanation as to 
why the excluded directors were found to be non-independent.  Zynga, Inc. Definitive Proxy 
Statement (Form 14A), at 1 (Apr. 25, 2013). 
17 
 
board is not, and cannot of course, be determinative of director independence at the 
pleading stage, as that would make the question of independence tautological.  But, 
our courts cannot blind themselves to that reality when considering whether a 
director on a controlled company board has other ties to the controller beyond her 
relationship at the controlled company.   
 
As to this reality, we consider it likely that the other facts pled by the 
plaintiff were taken into account by the Zynga board in determining that Gordon 
and Doerr were not independent directors.  These facts include that: Gordon and 
Doerr are partners at Kleiner Perkins, which controls 9.2% of Zynga‘s equity; 
Kleiner Perkins is also invested in One Kings Lane, a company co-founded by 
Pincus‘s wife; and, Hoffman and Kleiner Perkins are both invested in Shopkick, 
and Hoffman serves on its board with another Kleiner Perkins partner.  Of course, 
the defendants now argue that the relationships among these directors flowed all in 
one direction and that it is Pincus who is likely beholden to Gordon, Doerr, and 
Kleiner Perkins for financing.  But, the reality is that firms like Kleiner Perkins 
compete with others to finance talented entrepreneurs like Pincus, and networks 
arise of repeat players who cut each other into beneficial roles in various situations.  
There is, of course, nothing at all wrong with that.  In fact, it is crucial to 
commerce and most human relations.  But, precisely because of the importance of 
a mutually beneficial ongoing business relationship, it is reasonable to expect that 
18 
 
sort of relationship might have a material effect on the parties‘ ability to act 
adversely toward each other.  Causing a lawsuit to be brought against another 
person is no small matter, and is the sort of thing that might plausibly endanger a 
relationship.  When, as here, pled facts suggest such a relationship exists and the 
company‘s own board has determined that the directors whose ability to consider a 
demand impartially is in question cannot be considered independent, a reasonable 
doubt exists under Rales. 
 
Finally, consistent with our prior admonition, why the Zynga board 
determined that Gordon and Doerr are non-independent is precisely the sort of 
issue for which the use of a targeted request for books and records would have 
been helpful to the plaintiff, and thereby to both the Court of Chancery and us.  
The plaintiff‘s lack of diligence put the Court of Chancery in a compromised and 
unfair position to make an important determination regarding these directors‘ 
pleading stage independence.  That is regrettable, and the plaintiff is fortunate that 
his failure to do a pre-suit investigation has not resulted in dismissal. 
III. 
 
 
Because we have determined that the plaintiff has met his pleading stage 
burden to create a reasonable doubt that a majority of the Zynga board could act 
impartially in considering a demand implicating Zynga‘s CEO and controlling 
19 
 
stockholder, we reverse the Court of Chancery‘s dismissal under Rule 23.1 and 
remand the matter for further proceedings consistent with this opinion.46 
                                                          
 
46 As indicated, on appeal, the parties raised numerous other issues, including an argument to 
dismiss the claims against certain defendants under Court of Chancery Rule 12(b)(6) based on 
this Court‘s decision in In re Cornerstone Therapeutics Inc., Stockholder Litig., 115 A.3d 1173 
(Del. 2015).  Although the defendants ask us to reach these questions now, we consider that 
imprudent and believe that it is important for our Court of Chancery, which is the expert in these 
cases, to consider these issues in the first instance.  
1 
 
VALIHURA, Justice, dissenting: 
 
In a thoughtful forty-two page opinion, the Chancellor determined that the 
plaintiff had failed to demonstrate that demand would have been futile with respect 
to the claims in the Complaint.  For the reasons set forth herein, I would affirm his 
well-reasoned decision. 
 
This is a close case, and the plaintiff did not aid his cause in failing to direct 
a books and records request to the issues bearing on the board‘s independence.1  
Demand futility required the plaintiff to demonstrate that five of the nine directors 
were interested or lacked independence.  In my view, the Court of Chancery 
correctly determined that directors Katzenberg, Meresman, Gordon, and Doerr 
were independent.  Plaintiff raises no challenge in this Court as to the 
independence of directors Katzenberg and Meresman.2  Although the trial court did 
not separately analyze director Paul, it did state in a footnote that it ―would reach 
the same conclusion regarding Paul, who did not participate in the Secondary 
                                                          
 
1 To his credit, his counsel was candid about this at oral argument before this Court.  See Oral 
Argument at 5:23, Sandys v. Pincus, No. 157, 2016 (Del. Oct. 19, 2016) [hereinafter ―Oral 
Argument‖], https://livestream.com/DelawareSupremeCourt/events/6511893/videos/139287026 
(―Your Honor, at the time we started the process, a majority of the board had been sellers in the 
Secondary Offering, so it didn‘t seem quite as critical at that point in time.  I guess with the 
benefit of hindsight if I had to do it again we would have sought that.‖). 
2 The Verified Shareholder Derivative Complaint (the ―Complaint‖) contains no allegations 
regarding Katzenberg‘s relationship with Hoffman or Pincus.  The Complaint‘s only allegation 
regarding Meresman‘s independence is that both he and Hoffman serve on LinkedIn‘s board.  
Verified S‘holder Derivative Compl. at A71 ¶ 117(i), Sandys v. Pincus (Del. Ch. Apr. 4, 2014) 
[hereinafter ―Compl. at A__‖], available at A12-78.  Directors Siminoff and Doerr joined the 
Board after the events at issue in this action and are not named as defendants; and directors 
Gordon, Katzenberg, Meresman, and Paul are outside directors who were on the Board during 
the events at issue, but did not sell any stock in the Secondary Offering. 
2 
 
Offering or even vote to approve it.‖3  Because I would conclude that directors 
Katzenberg, Meresman, Gordon, Doerr, Siminoff, and Paul were independent, I 
would affirm the Court of Chancery‘s determination that the plaintiff‘s complaint 
failed to create a reasonable doubt that at least five of the nine directors were 
disinterested or independent for pleading stage purposes. 
 
The plaintiff‘s arguments as to Gordon and Doerr‘s alleged lack of 
independence arise from their positions as partners at Kleiner Perkins Caufield & 
Byers (―Kleiner Perkins‖).  The plaintiff alleged that Kleiner Perkins has (i) 
invested alongside Hoffman in a company co-founded by Pincus‘s wife; (ii) 
invested in a company of which Hoffman is a director; and (iii) completed two 
financings with Hoffman‘s venture capital firm.4  As the Court of Chancery 
recognized, the plaintiff failed to plead any facts about the size, profits, or 
materiality to Gordon and Doerr of these investments or interests.  Absent more, 
the relationships among these venture capitalists and entrepreneurs, as alleged, are 
not sufficient to raise a reasonable doubt as to Gordon and Doerr‘s independence.  
Thus, I agree with the Chancellor‘s view that their relationships and overlapping 
                                                          
 
3 Sandys v. Pincus, 2016 WL 769999, at *14 n.70 (Del. Ch. Feb. 29, 2016).   
4 Compl. at A20 ¶¶ 17-18, A68 ¶¶ 114(c), (f), A71 ¶ 117(g), A72 ¶¶ 117(j-k).  The Chancellor 
appropriately declined to consider other information regarding certain officers‘ investments in 
Kleiner Perkins funds.  The plaintiff had raised this information in briefing and in an affidavit 
containing an excerpt from a public filing that was not incorporated by reference into or attached 
to the Complaint. 
3 
 
investments do not rise to the level of creating a reasonable doubt as to their 
independence. 
 
As to Gordon‘s and Doerr‘s designation as ―not independent‖ under the 
NASDAQ rules, the Court of Chancery correctly observed that independence 
under the NASDAQ rules is relevant to our analysis here but not dispositive.5  The 
plaintiff candidly acknowledged that he failed to allege why Gordon and Doerr 
lack independence under NASDAQ rules.6  As the trial court observed, ―neither the 
proxy statement nor the plaintiff specifies the reason for this[,]‖7 and so it is not 
clear whether Gordon and Doerr‘s ―non-independent‖ designation was due to a 
relationship with Zynga, Pincus, or another executive.  It is not difficult to come up 
with a scenario where a director might be deemed ―not independent‖ under the 
NASDAQ rules, or NYSE rules, yet deemed independent for demand futility 
purposes.8  A request pursuant to 8 Del. C. § 220 should have been targeted to this 
point, as plaintiff concedes.9   
                                                          
 
5 See, e.g., In re MFW S’holders Litig., 67 A.3d 496, 510 (Del. Ch. 2013) (―[T]he fact that 
directors qualify as independent under the NYSE rules does not mean that they are necessarily 
independent under our law in particular circumstances.‖ (citing In re Oracle Corp. Derivative 
Litig., 824 A.2d 917, 941 n.62 (Del. Ch. 2003))), aff’d, 88 A.3d 635 (Del. 2014). 
6 See Oral Argument at 12:13. 
7 Sandys, 2016 WL 769999, at *9. 
8 See, e.g., Teamsters Union 25 Health Servs. & Ins. Plan v. Baiera, 119 A.3d 44, 61 (Del. Ch. 
2015) (comparing the bright-line test for independence set forth in the NYSE rules with the 
―case-by-case fact specific inquiry based on well-pled factual allegations‖ required by Delaware 
law).  In Baiera, the Court of Chancery concluded that, ―[g]iven the peculiarities of the NYSE 
Rules, the fact that [the director] was not designated as ‗independent‘ under the NYSE Rules in 
Orbitz‘s April 2013 proxy statement carries little weight.‖  Id. at 62.  The court then found that 
―the factual allegations concerning [that director‘s] former relationship with Travelport [were] 
4 
 
In the demand futility context, directors are presumed independent,10 and it 
is the plaintiff‘s burden to plead facts ―with particularity‖ showing that a demand 
on the board would have been futile.11  Given this burden of proof, the presumption 
of independence, and the lack of any explanation as to why Gordon and Doerr 
were identified as ―not independent‖ for NASDAQ purposes, I do not believe that 
plaintiffs are entitled to an inference that Gordon and Doerr lack independence for 
purposes of the fact-specific demand futility determination here.  This is 
particularly true given that the allegations concerning Gordon and Doerr‘s 
interlocking business relationships fall short of suggesting that they are of a ―bias-
producing‖ nature.   
 
As to director Paul, the plaintiff argues that Paul lacked independence from 
Pincus because they co-founded a company over twenty years ago and Pincus 
serves in an advisory role and is an investor in Paul‘s company, SideCar.12  There 
are no allegations that demonstrate the materiality or magnitude of the present 
                                                                                                                                                                                           
insufficient in [its] view to cast reasonable doubt on his presumed independence under Delaware 
law.‖  Id. 
9 See Oral Argument at 14:00 (―We alleged certain business relationships.  It‘s true we didn‘t go 
through the 220 for that one and that was a deficiency in our process.  And I guess I fall on my 
sword for that one.‖). 
10 Beam v. Stewart, 845 A.2d 1040, 1048-49 (Del. 2004) (―The key principle upon which this 
area of our jurisprudence is based is that the directors are entitled to a presumption that they were 
faithful to their fiduciary duties.  In the context of presuit demand, the burden is upon the 
plaintiff in a derivative action to overcome that presumption.‖ (emphasis in original) (citations 
omitted)). 
11 Del. Ch. Ct. R. 23.1; see also Brehm v. Eisner, 746 A.2d 244, 254 (Del. 2000) (―Rule 23.1 is 
not satisfied by conclusory statements or mere notice pleading.‖). 
12 Compl. at A71 ¶ 117(f).   
5 
 
business relationship, which the plaintiff conceded could have been ―[s]omewhere 
between 10 cents and $10 billion.‖13  He also did not dispute the trial court‘s 
statement that the company Paul and Pincus co-founded was sold approximately 15 
years ago.14  Thus, based upon my review of the record,15 I would conclude that 
these allegations are insufficient to plead a lack of independence. 
Although I would not need to reach issues concerning Siminoff‘s 
independence had my view prevailed, I believe that a few points are worth making.  
The sum total of the allegations as to Siminoff‘s alleged lack of independence 
appear in paragraph 117(h) of the Complaint, which states that ―Siminoff and her 
husband have an existing business relationship with defendant Pincus as co-
owners of a private airplane and, therefore, Siminoff would not initiate litigation 
against her business partner defendant Pincus as it would substantially and 
irreparably harm their ongoing business relationship.‖16   
Before the trial court, both parties referred to statements in Zynga‘s public 
filings with the Securities and Exchange Commission, although the Complaint did 
                                                          
 
13 Transcript of Oral Argument on Defs.‘ Mots. to Dismiss & Stay at A410-411 (Tr. 49:23-50:6), 
Sandys v. Pincus, No. 9512-CB (Del. Ch. Nov. 17, 2015), available at A362-435. 
14 Id. at A410 (Tr. 49:19-22). 
15 Beam, 845 A.2d at 1048 (―This Court reviews de novo a decision of the Court of Chancery to 
dismiss a derivative suit under Rule 23.1[,]‖ and ―[t]he scope of this Court‘s review is plenary.‖ 
(italics added) (citations omitted)). 
16 Compl. at A71 ¶ 117(h) (emphasis added). 
6 
 
not expressly incorporate these statements by reference.17  In briefing on the 
defendants‘ motion to dismiss or stay, the defendants attached a proxy statement in 
which Zynga disclosed the ―relationship between Ms. Siminoff and her spouse and 
Mr. Pincus, who co-own a small private airplane, which was not used for Company 
travel.‖18  The Chancellor also acknowledged an unsupported reference in the 
plaintiff‘s brief describing Siminoff as a ―close personal friend‖ of Pincus.  At oral 
argument on the defendants‘ motion to dismiss, the Chancellor offered counsel for 
Sandys an opportunity to expand on the nature of the relationship, but counsel was 
unable to do so.19 
 
Given the plaintiff‘s failure to allege any specific facts as to the materiality 
of the co-owned asset (apparently a small plane, not a jet),20 whether there were 
                                                          
 
17 E.g., Zynga Inc., Definitive Proxy Statement (Form 14A) (Apr. 25, 2013), excerpt available at 
B210-21; Zynga Inc., Prospectus (Mar. 29, 2012), excerpt available at B125-60. 
18 Zynga Inc., Definitive Proxy Statement (Form 14A), at 1 (Apr. 25, 2013), excerpt available at 
B210-21.   
19 Transcript of Oral Argument on Defs.‘ Mots. to Dismiss & Stay at A410 (Tr. 49:7-16). 
20 Zynga Inc., Definitive Proxy Statement (Form 14A), at 1 (Apr. 25, 2013), excerpt available at 
B210-21.  Plaintiff‘s counsel referred to the plane as a ―jet‖ during argument before this Court.  
See Oral Argument at 42:35 (―Your Honor I know you faulted Plaintiff for not doing a more 
complete books and records, but in the context of this case Defendants placed into the record 
many of the facts in the form of a proxy statement and a registration statement.  And in the 
argument down below I did invite the Chancellor to look at all the facts in the registration 
statement and the proxy and both sides cited to those facts.  So -- that it‘s a plane or a jet, the fact 
that it is a jet is properly before the Court just based upon the Defendants putting that document 
before the Court, to the extent there is a difference between a plane and a jet.‖).  The proxy 
statement does not refer to the plane as a ―jet,‖ as the Majority acknowledges.  See Majority Op. 
at 8 n.18.  At oral argument, when asked whether the plane is a $40,000 Piper Cub or a $40 
million Gulfstream jet, counsel for plaintiff merely responded that he never considered that the 
plane could be a smaller plane ―given the positions of these individuals‖ and that he thought ―it‘s 
reasonable to infer that a private plane is a relatively weighty purchase and a weighty 
investment.‖  Oral Argument at 10:00. 
7 
 
other owners, or the nature of the Siminoff/Pincus relationship,21 I am sympathetic 
to the Chancellor‘s view that ―Plaintiff‘s allegations concerning co-ownership of 
an asset and friendship do not reveal a sufficiently deep personal connection to 
Pincus so as to raise a reasonable doubt about Siminoff‘s independence from 
Pincus.‖22  Given the plaintiff‘s burden, the Chancellor‘s decision to err on the 
dismissal side of this fault line is not unreasonable. 
The Majority states that ―the most likely inference‖ to draw from co-
ownership of the small plane is ―not that the private airplane was a business 
venture‖ but that there was ―an extremely close, personal bond between Pincus and 
Siminoff‖ and that ―the Pincus and Siminoff families are extremely close to each 
other and are among each other‘s most important and intimate friends.‖23  I 
respectfully disagree given that the plaintiff has chosen to plead only a business 
relationship.  Nothing more is alleged, let alone facts suggesting that kind of 
familial loyalty and intimate friendship.   
To render a director unable to consider demand, a relationship must be of a 
―bias-producing nature.‖24  In Beam, this Court reaffirmed that a reasonable 
inference cannot be made that a particular friendship raises a reasonable doubt 
                                                          
 
21 See Compl. at A71 ¶ 117(h). 
22 Sandys, 2016 WL 769999, at *8. 
23 Majority Op. at 9-10 (emphasis added). 
24 Beam, 845 A.2d at 1050. 
8 
 
―without specific factual allegations to support such a conclusion.‖25  In Beam, this 
Court affirmed dismissal of a complaint that had pled that certain directors were a 
―longtime personal friend,‖ a ―longstanding friend[,]‖ and had a ―longstanding 
personal relationship with defendant Stewart.‖26  Given this plaintiff‘s decision to 
allege the existence of a business relationship only, he is left to argue that co-
ownership of a small airplane is simply the kind of fact that, in and of itself, creates 
a reasonable doubt as to Siminoff‘s independence from Pincus.  This is a close call.  
Although it may be reasonable to infer some kind of collaborative relationship 
given the nature of the asset, I do not believe the bare allegation in the Complaint 
rises to the level of creating a reasonable doubt as to Siminoff‘s ability to carry out 
her fiduciary duties, to properly consider a demand, and to put at risk her 
reputation by disregarding her duties. 
Thus, this case stands in contrast to Sanchez,27 for example, where the 
plaintiff pled that the director had a fifty-year friendship with the interested party, 
that the director‘s primary employment (and that of his brother) was as an 
executive of a company over which the interested party had substantial influence, 
and the director made thirty to forty percent of his annual income from his 
                                                          
 
25 Id. (quoting Beam v. Stewart, 833 A.2d 961, 979 (Del. Ch. 2003)) (internal quotation marks 
omitted).  
26 Id. at 1045-47. 
27 Del. Cnty. Emps. Ret. Fund v. Sanchez, 124 A.3d 1017 (Del. 2015). 
9 
 
directorship.28  Here, the bare reference to a ―close friendship‖ appears only as an 
unsupported assertion in a brief.29  This unsupported and unverified reference 
should not be considered and should not serve as a basis upon which to draw any 
inferences.  For me, this is not a mere technicality.  Court of Chancery Rule 3(aa) 
requires that all complaints ―be verified.‖30  This means that every pleading ―shall 
be under oath or affirmation by the party filing such pleading that the matter 
contained therein insofar as it concerns the party‘s act and deed is true, and so far 
as relates to the act and deed of any other person, is believed by the party to be 
true.‖31  Unverified and unsupported statements in a brief should not be considered 
as if they were pleaded facts. 
In Sanchez, we warned that, ―[i]t is not fair to the defendants, to the Court of 
Chancery, or to this Court, nor is it proper under the rules of either court, for the 
plaintiffs to put facts outside the complaint before us.‖32  We further cautioned that 
―this approach hazards dismissal with prejudice on the basis of a record the 
plaintiffs had the fair chance to shape and that omitted facts they could have, but 
failed to, plead.‖33  Here, the plaintiff failed to heed that warning and unnecessarily 
complicated the task of both courts in exercising their best efforts to reach a just 
                                                          
 
28 Id. at 1020-21. 
29 Brief of Pl. in Opp‘n to Defs.‘ Mots. to Stay or Dismiss at A145, Sandys v. Pincus, No. 9512-
CB (Del. Ch. Apr. 17, 2015), available at A82-150. 
30 Del. Ct. Ch. R. 3(aa). 
31 Id. 
32 Sanchez, 124 A.3d at 1021 n.14. 
33 Id. 
10 
 
result.34  Even assuming that our law cannot ―ignore the social nature of 
humans[,]‖35 there is no equity here in asking the reviewing courts to speculate that 
the pleaded Siminoff/Pincus business relationship is of such a nature to render her 
beholden to him or so under his influence that her directorial discretion is 
sterilized. 
 
Accordingly, because I would affirm the Court of Chancery‘s decision, I 
respectfully dissent. 
 
 
                                                          
 
34 Finally, regarding the Majority‘s repeated suggestions (both in its Opinion and at oral 
argument) that plaintiffs should search the internet for facts in fashioning a complaint, see, e.g., 
Oral Argument at 6:05, 14:00, 21:10, although perhaps useful on some level, internet searches 
likely are not, in most cases, an adequate substitute for demands made pursuant to 8 Del. C. 
§ 220—particularly in terms of the reliability and trustworthiness of information discovered.  Of 
course, a court cannot engage in independent fact-finding, on the internet or otherwise, and the 
Majority is correct that the Court of Chancery was stuck with the limited factual allegations 
made by the plaintiff—and so is this Court.  The Majority suggests that, had the plaintiff 
undertaken an internet search, ―he likely would have discovered more information about 
Siminoff‘s relationship with Pincus.‖  Majority Op. at 9; see also Oral Argument at 21:30.  But 
the Majority never identifies what information likely would have been discovered.  Whatever it 
may be, it can have no bearing on our disposition since the record on appeal before us consists of 
―the original papers and exhibits‖ only.  Del. Sup. Ct. R. 9(a); see Tribbitt v. Tribbitt, 963 A.2d 
1128, 1131 (Del. 2008) (observing that, ―while a judge may take judicial notice of a fact outside 
the record, that fact must not be subject to reasonable dispute and the parties must be given prior 
notice and an opportunity to challenge judicial notice of that fact‖ (citations omitted)); Barks v. 
Herzberg, 206 A.2d 507, 509 (Del. 1965); Del. R. Evid. 201(e) (―A party is entitled upon timely 
request to an opportunity to be heard as to the propriety of taking judicial notice and the tenor of 
the matter noticed.  In the absence of prior notification, the request may be made after judicial 
notice has been taken.‖). 
35 Oracle, 824 A.2d at 938.