Court Opinion

ID: 9403089
Source: CourtListenerOpinion
Date Created: 2023-06-20 14:03:33.648129+00
Date Added: 2024-06-11T17:20:04.575753
License: Public Domain

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

                                        June 20, 2023

Blake A. Bennett, Esquire                         Raymond J. DiCamillo, Esquire
Cooch and Taylor, P.A.                            Richards, Layton & Finger, P.A.
1007 North Orange Street, Suite 1120              920 North King Street
Wilmington, DE 19801                              Wilmington, DE 19801

Via Electronic Mail:
Francine McKenna
TheDig@Substack.com

            RE: Richard Frank v. Michael Mullen, et al.,
                Civil Action No. 2023-0381-MTZ

  Dear Counsel:

            This action was initiated on March 30, 2023, with the filing of a confidential

  complaint.1 A public, redacted version of the complaint was filed on April 5.2 On

  May 8, the Court docketed a letter from Francine McKenna, “an independent

  journalist and full-time lecturer in accounting at the Wharton School at the

  University of Pennsylvania,” challenging “the Order to grant confidential

  treatment” of the complaint.3 The Court entered a minute order later that day

  1
      Docket Item (“D.I.”) 1.
  2
      D.I. 5.
  3
      D.I. 9 at 1.
Richard Frank v. Michael Mullen, et al.,
Civil Action No. 2023-0381-MTZ
June 20, 2023
Page 2 of 6

informing the parties that the Court was treating McKenna’s letter as a notice of

challenge under Court of Chancery Rule 5.1(f).4

         This Court has a constitutional mandate to ensure its proceedings are open to

the public.5 A party may rather keep pleadings under seal; members of the public,

and press, may file notices of challenge to require that party to show good cause

for maintaining them under seal.6         Rule 5.1(f) governs those challenges to

confidential treatment, and sets firm deadlines with mandatory consequences for

missing them. Under Rule 5.1(f)(2), which governs documents for which a public

version is required, “any person may seek continued Confidential Treatment for

the Confidential Information redacted from the public version by filing a motion

within five days after the filing of the challenger’s notice.”7 If no such motion is

4
    D.I. 10.
5
 Soligenix, Inc. v. Emergent Prod. Dev. Gaithersburg, Inc., 289 A.3d 667, 671 (Del. Ch.
2023) (citing Del. Const. art. I, § 9); Horres v. Chick-fil-A, Inc., 2013 WL 1223605, at
*1–2 (Del. Ch. Mar. 27, 2013).
6
  Ct. Ch. R. 5.1(f) (“Any person may challenge the Confidential Treatment of a
Confidential Filing by filing a notice raising the challenge with the Register in
Chancery.”); see, e.g., In re Boeing Co. Deriv. Litig., 2021 WL 392851 (Del. Ch. Feb. 1,
2021) (confidentiality challenge from “Dow Jones & Company, Inc., publisher of The
Wall Street Journal” and a Wall Street Journal reporter); P’r Invs., L.P. v. Theranos,
Inc., 2018 WL 1906085 (Del. Ch. Apr. 23, 2018) (confidentiality challenge from a
“journalist and documentary film maker”); Okla. Firefighters Pension Ret. Sys. v. Corbat,
2017 WL 5484125 (Del. Ch. Nov. 15, 2017) (confidentiality challenge from a Wall Street
Journal reporter).
7
    Ct. Ch. R. 5.1(f)(2).
Richard Frank v. Michael Mullen, et al.,
Civil Action No. 2023-0381-MTZ
June 20, 2023
Page 3 of 6

filed within five days, “then the Confidential Filing shall become part of the public

record, and the Register in Chancery shall permit access to the Confidential Filing

on the docket system to the same extent as any other public filing.”8 If a motion is

timely filed, “[t]he person challenging Confidential Treatment shall have five days

to file an opposition.”9 “If an opposition to the motion is not timely filed, then the

challenge shall be deemed withdrawn and the Confidential Filing shall continue to

receive Confidential Treatment.”10

           Under Rule 5.1, McKenna’s challenge required the defendants to file a

motion for continued confidential treatment by May 15.             On May 15, the

defendants filed an updated public version of the complaint that included fewer

redactions.11 After the 5:00 p.m. filing deadline passed,12 the defendants also

attempted to file a Motion for Continued Confidential Treatment of Documents

Filed Under Seal (the “Motion”) responding to “[c]hallenger Francine McKenna”

and requesting that the Court keep the complaint confidential. That Motion was

filed without a proposed order, and was therefore rejected. The defendants refiled

8
    Id.
9
    Id.
10
     Id.
11
     D.I. 12.
12
     Ct. Ch. R. 79.2.
Richard Frank v. Michael Mullen, et al.,
Civil Action No. 2023-0381-MTZ
June 20, 2023
Page 4 of 6

on the sixth day, May 16, making the Motion untimely.13            The Motion was

accompanied by a certificate of service, which omitted McKenna but included the

plaintiff in this action.14

           Indeed, the defendants did not serve McKenna with the Motion upon filing.

Rather, on May 30, over two weeks later, the defendants notified the Court that

they had neglected to serve McKenna, and represented that “[t]oday, Defendants

are serving Ms. McKenna with a copy of the Motion by email and by registered

mail.”15 Based on this representation, the defendants suggested “that the time for

Ms. McKenna to respond (should she choose to respond) begin today or

tomorrow.”16

           On June 14, the Court requested a notice of service for McKenna,17 which

the defendants filed that same day.18 That notice provides proof of service by

registered mail to “The Digging Company LLC” sent May 30, but no proof of

13
     D.I. 13.
14
     Id. at Certificate of Service.
15
     D.I. 14 at 1.
16
     Id.
17
     D.I. 15.
18
     D.I. 16.
Richard Frank v. Michael Mullen, et al.,
Civil Action No. 2023-0381-MTZ
June 20, 2023
Page 5 of 6

service by email, and no proof of service on McKenna herself.19 In the absence of

proof of service by email, service by mail affords the recipient three additional

days to take any required action.20 No opposition to the Motion has been received.

         In sum, the defendants failed to timely file their Motion; failed to serve

McKenna at the time of filing; represented to the Court they would serve her by

email and certified mail on May 30 and the Court should start the clock for

McKenna’s opposition on May 30 or 31; failed to provide proof of service until

requested; and only provided proof of service by mail, not email, and on an entity,

not McKenna. If the Court had accepted that the Motion had been timely filed and

served by email, McKenna’s silence five days after that service would have

19
  D.I. 16, Ex. A. The notice of service states that the Motion was served on June 3. D.I.
16. Under Court of Chancery Rule 5(b), “Service by mail is complete upon mailing.” Ct.
Ch. R. 5(b). The Digging Company was served on May 30.
       The defendants have offered no explanation as to how service on The Digging
Company effectuated service on McKenna. I might infer from McKenna’s notice of
challenge that she is affiliated with The Digging Company, given that her newsletter is
named “The Dig,” her email address is TheDig@Substack.com, and her letterhead
contains a sketch of an excavator. D.I. 9. But her letterhead provides her letter
originated in Philadelphia, while The Digging Company was served in Chicago. Id.; D.I.
16, Ex. A. I cannot conclude the signature on the green card matches her notice of
challenge, and the recipient did not print their name. D.I. 9; D.I. 16, Ex. A. I cannot
conclude that McKenna was actually served.
20
     Ct. Ch. R. 6(e).
Richard Frank v. Michael Mullen, et al.,
Civil Action No. 2023-0381-MTZ
June 20, 2023
Page 6 of 6

compelled the erroneous conclusion that her notice of challenge was withdrawn,

and that the complaint should remain confidential.21

         But the defendants did not timely file their Motion on May 15.      They

succeeded in filing it on May 16. Rule 5.1(f)(2) mandates that if a motion seeking

continued confidential treatment is not timely filed, “then the Confidential Filing

shall become part of the public record.”22 The defendants filed the Motion a day

late.     The Motion is DENIED:       the Register in Chancery shall unseal the

complaint.

                                                    Sincerely,

                                                    /s/ Morgan T. Zurn

                                                    Vice Chancellor

MTZ/ms

cc:      All Counsel of Record, via File & ServeXpress

21
     Ct. Ch. R. 5.1(f)(2).
22
     Id. (emphasis added).