Court Opinion

ID: 9838145
Source: CourtListenerOpinion
Date Created: 2023-09-05 14:07:16.307864+00
Date Added: 2024-06-11T15:34:24.885895
License: Public Domain

COURT OF CHANCERY
                                   OF THE
                             STATE OF DELAWARE
  LORI W. WILL                                             LEONARD L. WILLIAMS JUSTICE CENTER
VICE CHANCELLOR                                              500 N. KING STREET, SUITE 11400
                                                            WILMINGTON, DELAWARE 19801-3734

                                   September 5, 2023

    Carmella P. Keener, Esquire                Michael A. Pittenger, Esquire
    Cooch and Taylor, P.A.                     Jacqueline A. Rogers, Esquire
    1000 N. West Street, Suite 1500            Potter Anderson & Corroon LLP
    Wilmington, Delaware 19899                 1313 N. Market Street
                                               Hercules Plaza, 6th Floor
    P. Bradford deLeeuw, Esquire               Wilmington, Delaware 19801
    deLeeuw Law LLC
    301 Walnut Green Road
    Wilmington, Delaware 19807

         RE:   In re Kraft Heinz Demand Refused Derivative Stockholder Litigation,
               C.A. No. 2022-0398-LWW

Dear Counsel,

         I have reviewed the parties’ submissions regarding defendant 3G Capital

Inc.’s Motion to Bifurcate Rule 23.1 and Rule 12(b)(6) Motion to Dismiss

Proceedings (the “Motion”).1 The “3G Defendants” assert that their arguments

under Rules 23.1 and 12(b)(6) are “independently dispositive” and ask that I

“bifurcate these motions and first consider briefing and argument on the motion to

1
 Def. 3G Capital Inc.’s Mot. to Bifurcate Rule 23.1 and Rule 12(b)(6) Mots. to Dismiss
Proceedings (Dkt. 57) (“Mot.”); Opp’n to Def. 3G Capital Inc.’s Mot. to Bifurcate Rule
23.1 and Rule 12(b)(6) Mots. to Dismiss Proceedings (Dkt. 60). The “3G Defendants” are
3G Capital, Inc., 3G Capital Partners Ltd., 3G Capital Partners II LP, 3G Global Food
Holdings GP LP, 3G Global Food Holdings LP, and HK3 18 LP. Mot. 1.
C.A. No. 2022-0398-LWW
September 5, 2023
Page 2 of 3

dismiss under Rule 23.1.”2 To the extent that the Motion is not moot, it is denied.

         This court “possesses the inherent power to manage its own docket . . . on the

basis of comity, efficiency, or simple common sense.”3 On comity, I am sympathetic

to the complexities and burdens presented by briefing two different sets of dismissal

arguments at once. But efficiency and common sense cut against bifurcation in this

instance. To potentially hold two rounds of motion to dismiss briefing, argument,

and decision-making would risk even greater inefficiency and burdens for the parties

and the court.

         At present, it is impossible for me to say whether the defendants’ Rule 23.1

arguments are arguably dispositive such that I need not hear their Rule 12(b)(6)

arguments.4 Often, issues of demand futility (or refusal) are intertwined with the

merits; the court routinely hears Rule 23.1 and Rule 12(b)(6) motions simultaneously

for that reason. If I can promote efficiency in this action by limiting the scope of

2
    Mot. ¶ 2.
3
    Paolino v. Mace Sec. Intern., Inc., 985 A.2d 392, 397 (Del. Ch. 2009).
4
  This is not a situation where threshold jurisdictional issues may prevent the court from
addressing substantive matters. E.g., Harris v. Harris, 289 A.3d 310, 343 (Del. Ch. 2023)
(deferring consideration of a Rule 12(b)(6) motion until the court ruled on a Rule 12(b)(2)
motion and determined that it had personal jurisdiction over the defendant); S’holder Rep.
Servs., LLC v. HPI Hldgs., 2023 WL 3092895, at *3 (Del. Ch. Apr. 26, 2023) (resolving a
motion for lack of subject matter jurisdiction and improper venue before addressing Rule
12(b)(6) motions). Rule 23.1 may raise questions of standing—but not this court’s power
to rule on the defendants’ defenses.
C.A. No. 2022-0398-LWW
September 5, 2023
Page 3 of 3

oral argument after reviewing the parties’ briefs, I will alert the parties promptly.

For now, the defendants should endeavor to brief all pleading-stage grounds for

dismissal and present them together.5

      Accordingly, the Motion is denied. To the extent necessary for this decision

to take effect, IT IS SO ORDERED.

                                             Sincerely yours,

                                             /s/ Lori W. Will

                                             Lori W. Will
                                             Vice Chancellor

cc: All counsel of record (via File&ServeXpress)

5
  I note that the defendants’ opening briefs were filed while the Motion was under
submission. Dkts. 64-65, 67.