Court Opinion

ID: 4327257
Source: CourtListenerOpinion
Date Created: 2018-11-02 16:13:48.511212+00
Date Added: 2024-06-11T14:47:19.508666
License: Public Domain

COURT OF CHANCERY
                                  OF THE
                            STATE OF DELAWARE
                                                                    417 S. State Street
JOSEPH R. SLIGHTS III                                             Dover, Delaware 19901
 VICE CHANCELLOR                                                Telephone: (302) 739-4397
                                                                Facsimile: (302) 739-6179

                         Date Submitted: October 1, 2018
                         Date Decided: November 2, 2018

John L. Reed, Esquire                        Thad J. Bracegirdle, Esquire
Ethan H. Townsend, Esquire                   Scott B. Czerwonka, Esquire
DLA Piper LLP                                Wilks, Lukoff & Bracegirdle, LLC
1201 N. Market Street, Suite 2100            4350 Lancaster Pike, Ste. 200
Wilmington, DE 19801                         Wilmington, DE 19805

                          William D. Johnston, Esquire
                          Tammy L. Mercer, Esquire
                          Young Conaway Stargatt & Taylor, LLP
                          1000 North King Street
                          Wilmington, DE 19801

       Re:    Quantlab Group GP, LLC, et al. v. Eames, et al.
               C.A. 2018-0553-JRS

Dear Counsel:

       Defendants have moved for reargument under Court of Chancery Rule 59(f)

(the “Motion”) following the Court’s September 18, 2018, bench ruling

(the “Ruling”) in which I denied Defendants’ Motion to Dismiss or Stay. For the

reasons that follow, the Motion is denied.
Quantlab Group GP, LLC, et al. v. Eames, et al.
C.A. 2018-0553-JRS
November 2, 2018
Page 2

        This case is the latest chapter in the parties’ ongoing dispute regarding the

de jure management of Quantlab Group, LP (“Quantlab Group), a Delaware limited

partnership.1 I laid out the basic factual background of the dispute at some length in

a previous decision, so I will not repeat that background here.2

        “A motion for reargument under Court of Chancery Rule 59(f) will be denied

unless the court has overlooked a controlling decision or principle of law that would

have controlling effect, or the court has misapprehended the law or the facts so that

the outcome of the decision would be different.”3 Reargument motions may not be

used to relitigate matters already fully litigated or to present arguments or evidence

that could have been presented before the court entered the order from which

1
    Compl. ¶¶ 32–42.
2
    Eames v. Quantlab Group, LLC, 2018 WL 2041548 (Del. Ch. May 1, 2018).
3
 Those Certain Underwriters at Lloyd’s, London v. Nat’l Installment Ins. Servs., 2008
WL 2133417, at *1 (Del. Ch. May 21, 2008).
Quantlab Group GP, LLC, et al. v. Eames, et al.
C.A. 2018-0553-JRS
November 2, 2018
Page 3

reargument is sought.4 In other words, a motion for reargument may not rehash old

arguments or invent new ones.5

         When the decision that is the subject of reargument rests on the court’s

exercise of its discretion, such as a decision to grant or deny a stay of Delaware

litigation,6 “no fact or legal precedent may ‘compel’ a different result absent a

showing of abuse of discretion.”7 Here, Defendants do not argue that I have abused

4
    Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 2810.1.
5
  Reserves Dev. LLC v. Severn Sa. Bank, FSB, 2007 WL 4644708, at *1 (Del. Ch. Dec. 31,
2007) (citing Miles, Inc. v. Cookson Am., Inc., 677 A.2d 505, 506 (Del. Ch. 1995)).
(“Reargument under Court of Chancery Rule 59(f) is only available to re-examine the
existing record; therefore, new evidence generally will not be considered on a Rule 59(f)
motion”); Sunrise Ventures, LLC v. Rehoboth Canal Ventures, LLC, 2010 WL 975581,
at *1 (Del. Ch. Mar. 4, 2010) (“[A] motion for reargument is ‘not a mechanism for litigants
to relitigate claims already considered by the court,’ or to raise new arguments that they
failed to present in a timely way.” (quoting Am. Legacy Found. v. Lorillard Tobacco Co.,
895 A.2d 874, 877 (Del. Ch. 2005)); Miles, 677 A.2d at 506 (“Where . . . the motion for
reargument represents a mere rehash of arguments already made at trial and during post-
trial briefing, the motion must be denied.”).
6
  Pl.’s Mot. for Rearg. (the “Motion”) at 4; Defs.’ Opp’n to Pl.’s Mot. for Rearg. (“Defs.’
Opp’n Br.”) at 1, 2. See also Adirondack GP, Inc. v. Am. Power Corp., 1996 WL 684376,
at *6 (Del. Ch. Nov. 13, 1996) (“The granting of a stay is not a matter of right, but rests
within the sound discretion of the court.”) (citing McWane Cast Iron Pipe Corp. v.
McDowell-Wellman Eng’g Co., 263 A.2d 281 (Del.1970)).
7
    Rich v. Chong, 2013 WL 3353965, at *1 (Del. Ch. July 2, 2013).
Quantlab Group GP, LLC, et al. v. Eames, et al.
C.A. 2018-0553-JRS
November 2, 2018
Page 4

my discretion. Instead, after presenting comprehensive data on the educational

background of judicial officers in Harris County, the resume of the Judge presiding

over the Texas Action (in favor of which Defendants would have me stay this case),

the size of the Texas economy and the GDP and census results in Harris County,

Defendants argue that I erred in concluding that the Texas court was incapable of

providing complete justice under McWane. Of course, my finding in that regard had

absolutely nothing to do with the competence of the presiding judge in Texas or the

fitness of the Harris County court system. 8 Rather, I determined that certain of the

issues raised in this action raised important questions regarding the internal affairs

and governance of a Delaware entity that: (1) Defendants had previously indicated

were not at issue in the Texas action; and (2) in any event, ought to be decided by a

Delaware court.

      The dispositive McWane factor that drove my decision on the motion to

dismiss or stay was whether the two actions involved the same parties and the same

8
 Indeed, as I made abundantly clear during the hearing on the motion to dismiss or stay,
and at a previous hearing, I have “tremendous respect for notions of comity” and every
confidence that my colleague in Texas is more than capable of deciding the issues involved
here in and Texas. Sept. 18, 2018 Tr. at 76, 78; July 20, 2018 Tr. at 36:7–21. For
Defendants to suggest that I held otherwise is, at best, disingenuous.
Quantlab Group GP, LLC, et al. v. Eames, et al.
C.A. 2018-0553-JRS
November 2, 2018
Page 5

issues. Defendants acknowledge that Quantlab Group is not a party in the Texas

Action,9 and that it is, at least nominally, a party (in my view a necessary party) in

this action.10 As noted, Quantlab Group is a Delaware entity. Its limited partnership

agreement contains a clear Delaware choice of law provision. The claims for

declaratory relief Plaintiffs have brought here will require that I interpret this

Delaware entity’s limited partnership agreement under Delaware law in order to

adjudicate a claim arising under Delaware statutes. To put it simply, this dispute

belongs in Delaware.11

           For the foregoing reasons, the Motion is DENIED.

           IT IS SO ORDERED.

                                            Very truly yours,

                                            /s/ Joseph R. Slights III

9
    Mot. at 8.
10
     Id.
11
  See In re Topps Co. S’holders Litig., 924 A.2d 951, 958 (Del. Ch. 2007) (“The authority
of a state to regulate the internal affairs of the corporations it charters is one of the oldest
and most firmly established doctrines in American corporation law.”);
CTS Corp. v. Dynamics Corp. of America, 481 U.S. 69, 89, 107 S. Ct. 1637, 95 L. Ed. 2d
67 (1987) (“No principle of corporation law is more firmly established than a state's
authority to regulate domestic corporations.”).