Court Opinion

ID: 4635988
Source: CourtListenerOpinion
Date Created: 2020-11-24 22:29:37.21372+00
Date Added: 2024-06-11T07:58:27.859903
License: Public Domain

COURT OF CHANCERY
                                       OF THE
    SAM GLASSCOCK III
     VICE CHANCELLOR
                                 STATE OF DELAWARE                     COURT OF CHANCERY COURTHOUSE
                                                                                 34 THE CIRCLE
                                                                          GEORGETOWN, DELAWARE 19947

                                      November 24, 2020

    Ned Weinberger, Esquire                           Kevin G. Abrams, Esquire
    Derrick Farrell, Esquire                          Eric A. Veres, Esquire
    Labaton Sucharow LLP                              Stephen C. Childs, Esquire
    300 Delaware Avenue – Suite 1340                  Abrams & Bayliss LLP
    Wilmington, DE 19801                              20 Monthchanin Road, Suite 200
                                                      Wilmington, DE 19807

    Peter B. Andrews, Esquire                         Brian C. Ralston, Esquire
    Craig J. Springer, Esquire                        Caneel Radinson-Blasucci, Esquire
    David M. Sborz, Esquire                           Potter Anderson & Corroon LLP
    Andrews & Springer LLC                            Hercules Plaza, 6th Floor
    3801 Kennett Pike                                 1313 North Market Street
    Building C, Suite 305                             Wilmington, DE 19899
    Wilmington, DE 19807

                 Re:    In re Terraform Power, Inc. Stockholders Litigation
                        C.A. No. 2019-0757-SG

Dear Counsel:

         I have the Defendants’ Application for Certification of Interlocutory Appeal

of my Memorandum Opinion of October 30, 2020 (the “Opinion”),1 together with

the Plaintiffs’ Opposition thereto. Because the Opinion was not accompanied by an

order, I have filed a consistent order today and consider the Application for

1
    In re Terraform Power, Inc. Stockholders’ Litigation, C.A. No. 2019-0757-SG, Dkt. No. 84.
Certification to be addressed to that Order of November 24, 2020 (the “Order”).

After considering the parties’ submissions, I have concluded that this matter is

appropriate for interlocutory appeal and have attached an order granting leave to

appeal from the Order and Opinion, consistent with Supreme Court Form L.

          Supreme Court Rule 42 is a testament to the particularity with which the

Supreme Court considers interlocutory appeals. It is unsurprising that this is so;

interlocutory appeals tend to be inefficient for the Supreme Court, the trial courts

and litigants. It is a rare case in which such an appeal is justified. I find that this is

such a case, however.

          I am directed by Rule 42 to consider several factors in addressing whether an

interlocutory appeal is warranted. I first consider 42(b)(3)(iii)(G). 2 That factor

involves whether consideration of the appeal may end the litigation. The Opinion

and Order involved the Defendants’ contention that the matter should be dismissed

because the Plaintiffs lack standing to pursue their Complaint directly rather than

derivatively. The Plaintiffs have standing in this matter, if at all, under the doctrine

set forth in Gentile v. Rosette.3 I will not repeat in this brief Letter Opinion the

reasons for which the application of the Gentile doctrine has been questioned in light

of our Supreme Court’s overarching test for determining whether a stockholder-

2
    Supr. Ct. R. 42(b)(iii)(G) (“Review of the Interlocutory Order may terminate the litigation.”).
3
    906 A.2d 91 (Del. 2006).
                                                   2
plaintiff’s corporate litigation is direct or derivative, as set forth in Tooley v.

Donaldson, Lufkin, & Jenrette, Inc. 4 That discussion is set out in some detail in the

Opinion from which this interlocutory appeal is sought. 5 In consideration of the

instant motion, however, the issue of the continuing validity of the Gentile rationale,

in light of, inter alia, criticism from our Supreme Court, 6 indicates that factor

42(b)(3)(iii)(G)7 is implicated here. I note that the application of subsection (G), by

itself, it is unlikely to be sufficient to sustain an interlocutory appeal. Here, however,

I find that subsection (H) also comes into play. That factor directs me to consider

whether “[r]eview of the interlocutory appeal may serve considerations of justice.” 8

Again, in light of case law questioning the continued vitality of Gentile at the trial

court level, and in light of criticism at the Supreme Court level, I find it in the interest

of justice that the matter be available for review by the Supreme Court at this Motion

to Dismiss stage. A successful interlocutory appeal, before the parties undergo the

extensive litigation that will be required to bring this matter to a final resolution in

this Court, will avoid substantial useless effort on behalf of litigation by parties who

4
  845 A.2d 1031 (Del. 2004).
5
  See generally Mem. Op., In re Terraform Power, Inc. Stockholders’ Litigation, C.A. No. 2019-
0757-SG, Dkt. No. 84.
6
  See El Paso Pipeline GP Co., L.L.C. v. Brinckerhoff, 152 A.3d 1248, 1265–66 (Del. 2016)
(Strine, C.J., concurring).
7
  Supr. Ct. R. 42(b)(iii)(G).
8
  Supr. Ct. R. 42(b)(iii)(H).
                                              3
lack standing. An unsuccessful appeal will still serve the interests of justice, by

clarifying an area of law that appears to be in a state of flux.

      I appreciate the Plaintiffs’ forceful argument that a reliance solely upon the

last two factors of Rule 42(b)(iii) constitutes but a weak ground upon which to certify

interlocutory appeal. To my mind, this is the rare exception that proves that

proposition; of course, if the Supreme Court disagrees, it need only decline to accept

the appeal. I have therefore attached an Order certifying the interlocutory appeal.

      To the extent the foregoing requires an order to take effect, IT IS SO

ORDERED.

                                         Sincerely,

                                         /s/Sam Glasscock III

                                         Vice Chancellor

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