Opinion ID: 2176586
Heading Depth: 1
Heading Rank: 6

Heading: the award of restitutionary damages

Text: In their cross-appeal, Hibbard Brown, Martone, and Hart assert that the Court of Chancery erred by (1) affirming the section 7303(2) violation based on nondisclosure of Hibbard Brown's market maker status, (2) affirming the award of restitutionary damages to Krieger and Flynn through the retroactive application of 6 Del.C. § 7325(b), and (3) not modifying the Commissioner's revocation of the licenses of Martone and Hart. The first claim has already been addressed. The second and third claims are discussed below. The Commissioner ordered Hibbard Brown to pay approximately $48,000 of restitutionary damages to Krieger and Flynn to compensate them for their losses in the securities transactions recommended by Martone and Hart. This award was based on a retroactive application of 6 Del.C. § 7325(b), which was amended by 67 Del.Laws, c. 274, effective July 2, 1990. Section 7325(b), as amended, authorizes the Commissioner to order, inter alia, restitution to investors. Delaware courts have recognized the general principle that statutes will not be retroactively applied unless there is a clear legislative intent to do so. E.g. Chrysler Corp. v. State, Del.Supr., 457 A.2d 345, 351 (1983). Nevertheless, a statutory amendment is remedial, and may apply retroactively, when it relates to practice, procedure or remedies and does not affect substantive or vested rights. 2 Norman J. Singer, Sutherland Stat. Const. § 41.09, at 399 (5th ed. 1993). See also 82 C.J.S. Statutes § 421 (1953) (As a general rule statutes relating to remedies and procedure are given a retrospective construction). Accordingly, as the Superior Court has recognized, Statutes which retrospectively make reasonable change in remedy are not impermissible. Mergenthaler v. Asbestos Corp. of America, Inc., Del.Super., 534 A.2d 272, 277 (1987). In light of these principles, we find that the Court of Chancery was correct when it affirmed the award of restitutionary damages pursuant to 6 Del.C. § 7325(b). The new amendment to that section merely specifies the remedies that may be ordered by the Commissioner. The listing of remedies in section 7325(b) does not affect the substantive rights of Hibbard Brown and/or its agents because, under the Delaware Securities Act, they would have been liable for such damages in a suit brought by the defrauded investors. See 6 Del.C. § 7323(a)(2). The fact that section 7325(b) now makes clear that the Commissioner may order restitution to investors for such violations in the absence of a suit by the injured investors does not increase Hibbard Brown's ultimate liability or otherwise affect its substantive or vested rights. Accordingly, we affirm the Court of Chancery's decision to affirm the award of restitutionary damages as based on a correct analysis and application of the legal principles governing retroactive application of statutory changes.