Court Opinion

ID: 9959607
Source: CourtListenerOpinion
Date Created: 2024-04-12 14:02:43.028379+00
Date Added: 2024-06-11T08:18:38.630568
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF DELAWARE

SECRETARY CLAIRE DEMATTEIS       §
in her official capacity as Secretary of
                                 §
the Delaware Department of Human §                     No. 178, 2023D
Resources and Co-Chair of the State
                                 §
Employee Benefits Committee,     §                     Court Below: Superior Court
DIRECTOR CERRON CADE in his      §                     of the State of Delaware
official capacity as Director of the
                                 §
Delaware Office of Management and§                     C.A. No. N22C-09-526
Budget and Co-Chair of the State §
Employee Benefits Committee,     §
DELAWARE DEPARTMENT OF           §
HUMAN RESOURCES, DELAWARE        §
STATE EMPLOYEE BENEFITS          §
COMMITTEE, and DELAWARE          §
DIVISION OF STATEWIDE            §
BENEFITS                         §
                                 §
     Defendants Below,           §
     Appellants/Cross Appellees, §
                                 §
     v.                          §
                                 §
RISEDELAWARE INC., KAREN         §
PETERSON, and THOMAS PENOZA, §
                                 §
     Plaintiffs Below,           §
     Appellees/Cross Appellants. §

                                 Submitted: January 31, 2024
                                 Decided:   April 12, 2024

Before TRAYNOR, LEGROW, Justices; and ARRINGTON, Judge.1

Upon appeal from the Superior Court of the State of Delaware. REVERSED.

1
 Sitting by designation under Del. Const. art. IV, § 12 and Supreme Court Rules 2(a) and 4(a), to
complete the quorum.
Patricia A. Davis, Esquire, Adria Martinelli, Esquire, DELAWARE
DEPARTMENT OF JUSTICE, Wilmington, Delaware; Max B. Walton, Esquire
(argued), Shaun Michael Kelly, Esquire, Lisa R. Hatfield, Esquire, CONNOLLY
GALLAGHER LLP, Wilmington, Delaware, for Appellants/ Cross Appellees
Secretary Claire Dematteis in her official capacity as Secretary of the Delaware
Department of Human Resources and Co-Chair of the State Employee Benefits
Committee, Director Cerron Cade in his official capacity as Director of the
Delaware Office of Management and Budget and Co-Chair of the State Employee
Benefits Committee, Delaware Department of Human Resources, Delaware State
Employee Benefits Committee, and Delaware Division of Statewide Benefits.

Sidney S. Liebesman, Esquire (argued), Austen C. Endersby, Esquire, Nathan
Barillo, Esquire, FOX ROTHSCHILD LLP, Wilmington, Delaware, for Appellees/
Cross Appellants RiseDelaware Inc., Karen Peterson, and Thomas Penoza.

LEGROW, Justice:
      This is an appeal from a decision of the Superior Court (1) finding that the

decision of the State Employee Benefits Committee (“SEBC”) adopting a Medicare

Advantage Plan for State retirees was subject to the requirements of Delaware’s

Administrative Procedures Act (“APA”); (2) granting Appellees’ Motion to Stay the

implementation of the Medicare Advantage Plan; and (3) requiring the State to keep

its retirees’ Medicare Supplement Plan in full force and effect. On cross-appeal,

Appellees challenge the Superior Court’s decision denying their application for

attorneys’ fees.

      The core question before us is one of statutory interpretation: under the APA,

is the SEBC’s selection of a particular type of Medicare plan a “regulation” as the

General Assembly has defined that term? Because the statute relevantly limits a

regulation to a “rule or standard,” and the SEBC’s choice of a statutorily authorized

Medicare plan does not fall within the plain meaning of the terms “rule” or

“standard,” we conclude that the SEBC’s decision was not a regulation.

Accordingly, the Superior Court did not have jurisdiction to enter the challenged

stay, and we reverse the decision on appeal. The important policy considerations

that attend the selection of healthcare coverage for State retirees are questions

appropriately addressed to the legislative and executive branches.
      I.     RELEVANT FACTUAL AND PROCEDURAL BACKGROUND2

A.         SEBC process

           The SEBC is responsible for implementing, overseeing, and managing State

employee benefits.3 The agency’s powers and duties are codified in 29 Del. C. §§

9602(b) and 5210(1-5). Those responsibilities and powers include the “[s]election

of the carriers or third-party administrators deemed to offer the best plan to satisfy

the interests of the State and its employees and pensioners in carrying out the intent

of this chapter.”4 The Delaware Code cabins the SEBC’s discretion by specifying

the types of coverage it must provide, including that the SEBC must select “a plan

which is supplemental to Medicare parts A and B, or constructed as a plan under

Medicare part C, for eligible pensioners entitled to services, rights or benefits under

the federal Medicare Program.”5 Before 2023, the State retirees’ health insurance

plan was a Medicare part A and B supplemental plan titled “Highmark BCBS

Special Medicfill Supplemental Plan.”6

2
  Unless otherwise noted, the recited facts are taken from the Superior Court’s October 19, 2022
Order. See RiseDelaware Inc. v. DeMatteis, 2022 WL 11121549 (Del. Super. Oct. 19, 2022)
(hereinafter “Stay Order at __.”).
3
 Corrected Appellants’ Opening Brief at 5 (hereinafter, “Appellants’ Opening Br. at __”). Title
29, Section 9602(a) of the Delaware Code establishes the members of the SEBC.
4
    29 Del. C. § 5210(3).
5
    29 Del. C. § 5203(b).
6
  Appellants’ Opening Br. at 6 (citing App. to Appellants’ Opening Br. at A27, A67). See
Appellees’ Answering Br. on Appeal and Cross-Appellants’ Opening Br. on Cross Appeal at 10
(hereinafter, “Appellees’ Answering Br. at __.”) (containing an explanation of retirees’ healthcare
benefits).

                                                2
          The SEBC held a meeting on February 28, 2022, at which it unanimously

approved a motion to move the retirees to a Group Medicare Advantage plan, which

is a plan under Medicare part C.7 “At the March 14th meeting, the Committee

approved the implementation of the Medicare Advantage plan for the January 1,

2023 plan year.”8 The SEBC met again on April 25, 2022, and “approved the rates

for the Medicare pensioner plan options and those proposed options were voted on

to replace the [then-existing plans].”9 At the same meeting, “a motion was adopted

to approve Medicare Advantage plan with prescription as the only Medicare

pensioner option.”10 On June 1, 2022, an introductory mailing was sent to eligible

Medicare pensioners about the transition to a Medicare Advantage Plan beginning

January 1, 2023.11

7
    App. to Appellants’ Opening Br. at A234.
8
    Stay Order at *1.
9
    Id.
10
   Id. The parties, especially Appellees, spent a substantial portion of their briefs detailing the
SEBC’s process for considering the Medicare Advantage Plan and the notice provided to the public
regarding that process. There is no dispute, however, that if the SEBC’s adoption of a Medicare
Advantage Plan fell within Delaware’s Administrative Procedures Act, the SEBC did not meet the
requirements of that Act. Conversely, if the SEBC’s decision did not fall within the Act, the
process it followed is not relevant because Appellees are not pursuing any other claim.
Accordingly, we do not recite in detail the various meetings and decision points on which
Appellees focus.
11
     App. to Appellants’ Opening Br. at A72.

                                                3
          The Medicare Advantage contract was awarded on February 28, 2022, and

finalized on September 28, 2022.12 Two days later, on September 30, 2022, “the

State updated information on its website providing an 11-page document labeled

“Frequently Asked Questions” (“FAQs”) under its information tab in Medicare

Benefits explaining this shift in health care coverage to Medicare Advantage.”13 On

October 12, 2022, after this action was filed in the Superior Court, an overview was

made available on the State’s website that explained the prior authorization process

that the new plan would require for certain medical procedures.14

B.        Complaint filed in Superior Court

          On September 25, 2022, Appellees/Plaintiffs below, RiseDelaware Inc.;15

Karen Peterson; and Thomas Penoza (collectively, “Appellees” or “RiseDelaware”)

filed a Complaint in the Superior Court against Appellants/Defendants below,

Secretary Claire DeMatteis, in her official capacity as Secretary of the Delaware

Department of Human Resources and Co-Chair of the SEBC; Director Cerron Cade,

in his official capacity as Director of the Delaware Office of Management and

12
     Id. at A130.
13
  Stay Order at *2 (“The FAQs document explained the policy requires State retirees to enroll in
a Medicare Advantage plan with prescription or lose their State-funded health insurance.”).
 Id. The website was labeled “Highmark Blue Cross Blue Shield of Delaware Freedom Blue
14

Medicare Advantage PPO Prior Authorization Overview.” Id.
15
  RiseDelaware Inc. is a nonprofit corporation which “was established and is managed by
Delaware retirees to act as a sentinel on issues involving State health care benefits provided for
Medicare-eligible Delaware retirees[.]” App. to Appellees’ Answering Br. at B4.

                                                4
Budget and Co-Chair of the SEBC; the SEBC; the Delaware Department of Human

Resources (“DHR”); and the Delaware Division of Statewide Benefits (“DSB”)

(collectively, “Appellants” or “SEBC”).16 The Complaint contained three counts

and sought two forms of relief: (1) declaratory relief under 10 Del. C. § 6501 and 29

Del. C. § 10141, and (2) a stay order under 29 Del. C. § 10144 preventing Appellants

from executing a contract with Highmark or further implementing a Medicare

Advantage Plan pending judicial review.17               Given the expectation that open

enrollment for the new plan was scheduled to begin on October 3, 2022, the parties

engaged in expedited proceedings in the Superior Court.18

C.        Motion to Stay and Stay Order

          On October 4, 2022, Appellees filed a Motion to Stay “implementation of the

new Highmark Medicare Advantage Plan for State retirees and the open enrollment

period currently in effect for State retirees” under 29 Del. C. § 10144.19 Appellants

filed their Answering Brief in Opposition to the Motion to Stay on October 11,

2022.20 On October 17, 2022, the Superior Court heard oral argument on the Motion

16
     Id. at B1–38.
17
    Id. (“Count One. Violation of the Administrative Procedures Act, 29 Del. C. §§ 10115–10118.
. . . Count Two. Violation of the Administrative Procedures Act, 29 Del. C. §§ 101414. . . . Count
Three. Declaratory Relief under 10 Del. C. § 6501 and 29 Del. C. § 10141.”).
18
     App. to Appellants’ Opening Br. at A34.
19
     App. to Appellees’ Answering Br. at B89.
20
     App. to Appellants’ Opening Br. at A17.

                                                5
to Stay and reserved its decision.21 On October 19, 2022, the Superior Court issued

an Order granting the Motion to Stay (the “Stay Order”).22

          In granting the Motion to Stay, the Superior Court held that it had authority to

enter a stay under 29 Del. C. § 10144 because “the decision of the SEBC is

considered a regulation under the Delaware Administrative Procedures Act[.]”23

The court first noted that under the APA, a “[r]egulation means any statement of

law, procedure, policy, right, requirement or prohibition formulated and

promulgated by an agency as a rule or standard, or as a guide for the decision of

cases thereafter by it or by any other agency, authority or court.”24 Further, the court

noted that the SEBC exercised its authority—which is granted under Title 21

Sections 9602 and 5210 of the Delaware Code—when it “enacted a policy requiring

retirees to move from their State-subsidized Medicare Plan to Medicare Advantage

plan or stay with traditional Medicare and give up their State-subsidized benefits.

Therefore, such policy change is a regulation under the APA.”25 The court rejected

Appellants’ argument that, under this Court’s decision in Free-Flow Packaging Int’l,

21
     Id. at A9.
22
     Stay Order at *1.
23
     Id. at *3.
24
     Id.; 29 Del. C. § 10102(7).
25
     Stay Order at *3.

                                              6
Inc. v. Sec’y of Dep’t of Nat. Res. & Env’t Control of State,26 29 Del. C. §§ 9602 and

5210 “authorized [the] SEBC to change retirees’ healthcare plans without following

the formal APA requirements.”27 The court held that “[h]ere, there is no specific

statutory directive for SEBC to force all retirees from their State-subsidized benefits

to a Medicare Advantage plan or lose benefits[,]” and “[t]herefore, Free-Flow does

not apply.”28

           The court next assessed the merits of Appellees’ arguments for a stay,

including the likelihood of success on the merits and imminent harm, finding that

there was a likelihood of success on the merits and that retirees in the present and

future would face irreparable harm if the stay was not granted.29 Further, the court

found that a stay would not harm the public and concluded that “the harm to

[Appellees] far outweighs the harm to [Appellants] and the public.”30

           In granting the Appellees’ Motion to Stay, which effectively meant State

retirees would retain their current benefits for the immediately foreseeable future,

the court stated that “implementation of a Medicare Advantage Plan for State retirees

and acceptance of enrollment into the Plan, including by way of automatic

26
  Free-Flow Packaging Int’l, Inc. v. Sec’y of Dep’t of Nat. Res. & Env’t Control of State, 861
A.2d 1233 (Del. 2004).
27
     Stay Order at *3.
28
     Id.
29
     Id. at *3–4.
30
     Id. at *5.

                                              7
enrollment in the open enrollment period currently in effect for State retirees is

stayed until further Order by this Court.”31 The court also required the State to

ensure “that the healthcare insurance and benefits available to State retirees prior to

October 3, 2022, or in which they were enrolled prior to that time, remain in full

force and effect.”32 Further, the court scheduled a trial on the merits to make final

factual determinations.33 Not long after that, the trial was removed from the calendar

at the parties’ request.34

D.         Petition for Attorneys’ Fees

           On November 14, 2022, Appellees filed a Motion for Attorneys’ Fees (the

“Fee Motion”), arguing that the APA allows an award of fees when there is success

in achieving a stay order and that the Appellants’ conduct warranted fee-shifting in

this case.35 On February 8, 2023, the court issued an order denying Appellees’ Fee

Motion.36

31
     Id.
32
     Id.
33
     Id.
34
  App. to Appellants’ Opening Br. at A8 (11/9/2022 Stipulation and [Proposed] Order for
Resolution of Remaining Claims and Issues, D.I. No. 36).
35
     App. to Appellees’ Answering Br. at B340–61.
36
     Id. at B288–94.

                                               8
E.         Stipulations for Final Judgment

           On November 18, 2022, the parties filed a Joint [Proposed] Stipulation and

Order for Resolution of Remaining Claims and Issues.37              The proposed joint

stipulation and order provided: (1) that Appellants would file a memorandum in

opposition to Appellees’ Fee Motion; (2) the timelines for filings and procedures if

the court were to rule in favor of the Fee Motion; (3) the procedure the parties would

follow upon resolution of the Fee Motion; and (4) that “[u]pon entry of final

judgment, each party shall be permitted to appeal as authorized by law. Nothing in

this stipulation shall be deemed a waiver of any applicable right of appeal nor shall

it be deemed to preclude any arguments on appeal that were raised in the underlying

proceedings.”38 On December 6, 2022, the court refused to enter the November 18,

2022 stipulation and proposed order, requesting that the parties “[p]lease file a

stipulation reflective of the resolution of the case. It seems that the parties are at the

point of over litigating this case.”39

           On December 16, 2022, the parties filed another Stipulation and [Proposed]

Order for Entry of Final Judgment asking the court to enter a Final Order stating

that: (1) the action was ripe for entry of final judgment on all matters except the

37
     Id. at B270–72.
38
     Id.
39
     Id. at B274–78.

                                             9
court’s ruling on the Motion to Amend40 and the Fee Motion; (2) “[u]pon rendering

its rulings on the Motion to Amend and Fee Petition, the Court may enter the form

of Order, attached hereto as Exhibit 1, as its Order and Final Judgment, fully

disposing of all matters in the Action[;]” and (3) “[u]pon entry of the attached form

of Order, each party shall be permitted to appeal as authorized by law. Nothing in

this stipulation shall be deemed a waiver of any applicable right of appeal; nor shall

it be deemed to preclude any arguments on appeal that were raised in the underlying

proceedings.”41 For reasons that are not clear from the record before us, the court

never entered this proposed stipulation and order.

F.        Appellants’ First Appeal

          On February 15, 2023, following the ruling denying the Fee Motion, the

Appellants filed their Notice of Appeal in this Court.42 Because the court had not

entered a final order, the Appellants’ first appeal was dismissed as interlocutory and

remanded to the Superior Court.43

40
 On December 2, 2022, the Appellees filed a Motion to Amend and Supplement their Complaint,
which the court denied on December 19, 2022. Id. at B444; Appellants’ Opening Br. at 12.
41
     App. to Appellees’ Answering Br. at B279–87.
42
     Appellants’ Opening Br. at 13.
43
  DeMatteis v. RiseDelaware Inc., 295 A.3d 1098, 2023 WL 2761690, at *2 (Del. Apr. 3, 2023)
(TABLE).

                                              10
G.        Appellants’ Motion for Final Order and the Trial Court’s Order on Final
          Judgment

          After dismissal of Appellants’ first appeal, Appellants submitted a Motion and

[Proposed] Order for Entry of Final Judgment.44 Appellees opposed that motion,

and the court heard oral argument.45 On May 22, 2023, the court issued its Order on

Final Judgment (the “Final Order”).46 The Superior Court’s Final Order did not

adopt the language proposed by the SEBC.47 Appellants filed their notice of appeal

in this Court on the same day. On June 21, 2023, Appellees filed their notice of

cross-appeal.

                              II.    STANDARD OF REVIEW

          This Court reviews questions of law, including the interpretation of a statute,

de novo.48 “The goal of statutory construction is to determine and give effect to

legislative intent.”49 When the unambiguous language of the statute clearly reflects

the legislature’s intent, the plain meaning of the statutory language controls.50 “A

44
     App. to Appellees’ Answering Br. at B301–12.
45
  Plaintiffs’ Opp. To Defendants’ Motion for Entry of Final Judgment (Super. Ct. D.I. No. 64);
App. to Appellees’ Answering Br. at B313–29.
46
  RiseDelaware Inc. v. DeMatteis, 2023 WL 3625996 (Del. Super. May 22, 2023) (hereinafter
“Final Order at __.”).
47
     Id.; App. to Appellees’ Answering Br. at B301–05.
48
  City of Wilm. v. Nationwide Ins. Co., 154 A.3d 1124, 1127 (Del. 2017); Clark v. Clark, 47 A.3d
513, 517 (Del. 2012).
49
     Eliason v. Englehart, 733 A.2d 944, 946 (Del. 1999).
50
     Spielberg v. State, 558 A.2d 291, 293 (Del. 1989); Eliason, 733 A.2d at 946.

                                                 11
statute is ambiguous ‘if it is reasonably susceptible of different constructions or

interpretations’ or ‘if a literal reading of the statute would lead to an unreasonable

or absurd result not contemplated by the legislature.’” 51

          We review an attorneys’ fee award for abuse of discretion.52 Delaware law

follows the American Rule, under which litigants are generally responsible for

paying their own litigation costs.53 Courts recognize “limited equitable exceptions”

to the American Rule, including one for a party’s “bad faith” conduct throughout

litigation.54 Although there is no all-encompassing definition of “bad faith” conduct,

Delaware courts have granted attorneys’ fees where a party “unnecessarily

prolonged or delayed litigation, falsified records, or knowingly asserted frivolous

claims.”55 In Delaware, the “bad faith” exception only applies in “extraordinary

circumstances.”56 Its purpose is “to deter abusive litigation and protect the integrity

of the judicial process.”57

51
 LeVan v. Independence Mall, Inc., 940 A.2d 929, 933 (Del. 2007) (quoting Newtowne Vill. Serv.
Corp. v. Newtowne Rd. Dev. Co., 772 A.2d 172, 175 (Del. 2001)).
52
  Bako Pathology LP v. Bakotic, 288 A.3d 252, 266 (Del. 2022); Bhole, Inc. v. Shore Invs., Inc.,
67 A.3d 444, 449 (Del. 2013); Sternberg v. Nanticoke Mem'l Hosp., Inc., 62 A.3d 1212, 1220 (Del.
2013); Johnston v. Arbitrium (Cayman Is.) Handels AG, 720 A.2d 542, 546 (Del. 1998).
53
     Mahani v. Edix Media Group, Inc., 935 A.2d 242, 245 (Del. 2007); Johnston, 720 A.2d at 545.
54
     Montgomery Cellular Holding Co., Inc. v. Dobler, 880 A.2d 206, 227 (Del. 2005).
55
     Johnson, 720 A.2d at 546.
56
     Brice v. State Dept. of Correction, 704 A.2d 1176, 1179 (Del. 1998).
57
     Montgomery Cellular, 880 A.2d at 227.

                                                 12
                                      III.   ANALYSIS

          There are two main issues on appeal. First, Appellants assert that the Superior

Court erred in holding that the SEBC’s decision adopting a Medicare Advantage

plan was a regulation as that term is defined in the APA. Second, on cross-appeal,

Appellees argue that the Superior Court erred by refusing to grant their application

for attorneys’ fees.

A.        The Superior Court erred in holding that the SEBC’s decision was a
          regulation as defined in Delaware’s Administrative Procedures Act.

          Appellants contend that the SEBC is not required to promulgate a regulation

when it enters into a contract for the administration of health care benefits for State

retirees or employees.58 Appellants argue that the SEBC’s decision to move State

retirees to a Medicare part C plan was consistent with a specific statutory directive

authorizing that step and that the canons of statutory construction show that the

selection of a carrier is not a “regulation” as the APA defines that term.59 Because

the SEBC’s Medicare Advantage decision is not governed by the APA, Appellants

contend that the Superior Court’s Stay Order, which was issued under the APA, must

be reversed.60

58
     Appellants’ Opening Br. at 14.
59
     Id. at 14, 19.
60
     Id. at 24.

                                              13
          In response, Appellees argue that Appellants are legally foreclosed from

challenging the Stay Order in this appeal because: (1) Appellants “did not ask the

Superior Court at the final judgment stage to lift the Stay Order’s injunction against

the implementation of Medicare Advantage; and” (2) Appellants’ “Opening Brief

did not challenge the Final Order so that their arguments seeking to have the Stay

Order overturned amount to an untimely interlocutory appeal not in compliance with

Superior Court Rule 42[.]”61 Appellees further argue that, if this Court reaches the

merits of the issue on appeal, the Stay Order should be upheld because the SEBC’s

decision to move to a Medicare Advantage Plan is a “policy change” and therefore

is a regulation within the meaning of the APA. Appellees argue that the SEBC’s

adoption of Medicare Advantage was not pursuant to a specific legislative directive

and no statutory provision negated the APA’s binding rule-making obligations on

the SEBC.62

          1.         The issue on appeal may be considered on its merits.

          Before addressing the substance of Appellants’ position, Appellees advance

several procedural arguments that they contend bar our consideration of this appeal.

Appellees first urge us to remand without addressing the merits of Appellants’

61
     Appellees’ Answering Br. at 31.
62
     Id. at 38–43.

                                              14
arguments because the appeal challenges an interlocutory order.63 Appellees assert

that Appellants only dispute the Stay Order, that this Court dismissed as

interlocutory Appellants’ previous attempt to appeal that order,64 and that Appellants

did not “argue the Stay Order was merged into and affected the Final Order, such

that the Stay Order could be appealed on that basis.”65 Appellees further argue that

“[t]he Superior Court’s Final Order was affected not by the Stay Order, but rather

[by] the parties’ own actions to resolve the matter after the Stay Order was

entered.”66

           We confess that this argument is both puzzling and challenging to address

because of the unusual order of proceedings in the Superior Court. We conclude,

however, that Appellees’ procedural arguments lack merit. Although Appellees are

correct that the Final Order does not expressly merge with the Stay Order, the Final

Order refers to the Stay Order multiple times.67 The trial court’s clear intent was to

enter a final, appealable order as to all the issues in the case. Moreover, Appellees

63
     Id. at 32.
64
  Id. See DeMatteis v. RiseDelaware Inc., 295 A.3d 1098, 2023 WL 2761690, at *2 (Del. Apr. 3,
2023) (TABLE) (“[T]he Superior Court's failure to enter the proposed order for entry of final
judgment—again, submitted at the Superior Court's request and the form and substance of which
was agreed to by the parties—renders the finality and scope of the Order and the Decision
uncertain. Accordingly, we must dismiss this appeal for the State’s failure to comply with Rule 42
when taking an appeal from an interlocutory order.”).
65
     Appellees’ Answering Br. at 33.
66
     Id.
67
     Final Order at *2.

                                               15
conceded at oral argument that they had agreed that the issue was ripe for appeal and

“the [Appellees] were more than happy to come on to an appeal on the issue of

whether the APA applied.” 68

         Appellees support their contention that this appeal is interlocutory by citing

Tyson Foods, Inc. v. Aetos Corp.69 Tyson stands for the proposition that “[a]n

aggrieved party can appeal to this Court only after a final judgment is entered by the

trial court. . . . [and] a final judgment is one that determines all the claims as to all

the parties.”70 But Appellees’ reliance on Tyson is misplaced; unlike the appellant

in Tyson, the Appellants here filed a timely appeal of the trial court’s subsequent

judgment, which was the Final Order. The Final Order was entered a month after

this Court remanded the matter to the trial court after holding that the Stay Order

was interlocutory.71 The trial court and the parties intended the Final Order to be a

final judgment. To remand the matter again as interlocutory would be absurd and

would put the courts in a perpetual loop, ignoring the clear intent of the trial court

68
     Oral Argument at 18:12–19:20.
69
     809 A.2d 575, 580 (Del. 2001); Appellees’ Answering Br. at 34.
70
   Tyson Foods, 809 A.2d at 579 (“The test for whether an order is final and therefore ripe for
appeal is whether the trial court has clearly declared its intention that the order be the court's ‘final
act’ in a case.”) (citing Del. Const. art. IV, § 11(1)(a); Harrison v. Ramunno, 730 A.2d 653 (Del.
1999)). See J.I. Kislak Mortgage Corp. v. William Matthews Builder, Inc., 303 A.2d 648, 650
(Del. 1973) (holding order is deemed final if decision is trial court’s last act in disposing of all
justiciable matters within its jurisdiction).
71
   The Final Order was issued on May 22, 2023. Final Order at *1. This Court issued its decision
in the initial appeal on April 3, 2023. DeMatteis v. RiseDelaware Inc., 295 A.3d 1098, 2023 WL
2761690, at *2 (Del. Apr. 3, 2023) (TABLE).

                                                  16
and the parties. Dismissal of the appeal also would leave the SEBC without a clear

directive as to whether the APA applies to its selection of health plans for State

employees and retirees.

       Appellees also make a “merger” argument, citing a series of non-Delaware

cases72 that explain that a “provisional remedy designed to retain the status quo while

the action was pending [] does not ‘necessarily affect’ the final judgment, and thus

the appeal does not bring it up for review.”73 Although it is true that a provisional

remedy may not always “affect” the final judgment, here the Stay Order does just

that. The trial court’s conclusion that the APA applied to the SEBC’s decision

effectively resolved the merits of the parties’ dispute and ended the need for further

litigation in the Superior Court. Given the facts of this case, the language of the

proposed stipulations and the Final Order, and the fact that there were no other

readily apparent steps available to Appellants to seek review of the trial court’s legal

conclusions regarding the scope of the APA, the requirements for merger are met.

       Appellees’ argument that Appellants are legally foreclosed from challenging

the Stay Order on the basis of waiver is equally unavailing. The parties agreed to

72
   See Camesi v. Univ. of Pittsburgh Med. Ctr., 729 F.3d 239, 244–45 (3d Cir. 2013) (“Under the
‘merger rule,’ prior interlocutory orders merge with the final judgment in a case, and the
interlocutory orders (to the extent that they affect the final judgment) may be reviewed on appeal
from the final order.”) (citing and quoting In re Westinghouse Sec. Litig., 90 F.3d 696, 706 (3d
Cir. 1996)).
73
   Two Guys From Harrison-NY v. S.F.R. Realty Assocs., 186 A.D.2d 186, 189(N.Y. App. Div.
1992); Appellees’ Answering Br. at 33.

                                               17
two stipulations—on November 18, 2022 and December 16, 2022—that express

their shared intent that a final judgment be entered.74 The stipulated final orders

proposed by the parties would have made merger clear. Further, at oral argument

the trial court recognized that the “cased ended outside of court” with “no trial” and

no “findings of fact or conclusions of law,” and the only issue left to address by the

court was the request for attorneys’ fees.75

          These stipulations contained clear language that “[w]ith the exception of the

Court’s rulings on the Motion to Amend and Fee Petition, the Action is ripe for entry

of final judgment.”76 Further, the December 16, 2022 stipulation provided that upon

a ruling on the Motion to Amend and Fee Petition, all matters in the action were

fully disposed, and “[n]othing in this stipulation shall be deemed a waiver of any

applicable right of appeal; nor shall it be deemed to preclude any arguments on

appeal that were raised in the underlying proceedings.”77 Appellants argue that:

          Although the Superior Court did not sign this particular proposed order,
          choosing to use its own form of order, both parties agreed that the
          conclusions of law to date disposed of the issues, other than
          [Appellees’] request for attorneys’ fees, at the lower court level. The
          parties presented the stipulation to the Court with full knowledge that

74
     App. to Appellees’ Answering Br. at B270–72, B279–87.
75
     Id. at B315.
76
     Id. at B280.
77
     Id. at B281.

                                              18
          the other side would be appealing any adverse decision of the Superior
          Court.78

We agree with this reasoning. Although the court did not enter either proposed

stipulation, the fact remains that the parties agreed to their terms, and nothing in

Appellants’ actions can fairly be construed as a waiver of their right to appeal the

trial court’s legal holding. Appellees cite no authority for their assertion that

Appellants waived the issue by failing to ask the trial court to lift the Stay Order,

and we cannot discern a legal or practical reason to find waiver under these

circumstances.

          Appellees also argue that the appeal was mooted by the SEBC’s later actions,

particularly (1) a September 7, 2023 agreement signed by the State and Highmark

Blue Cross Blue Shield terminating the contract at issue in the trial court; and (2) a

decision and vote by the SEBC on October 2, 2023 to solicit bids for a Medicare

supplement plan that “duplicates the current plan without deviation.”79 The issue of

mootness was raised at oral argument, but it was not properly presented in the

parties’ briefs and rests on facts that are not part of the appellate record.80 In any

event, the plain language of the Stay Order required Appellants to “take all necessary

78
  Appellants’ Reply Br. on Appeal and Cross-Appellees’ Answering Br. on Cross-Appeal at 23
(hereinafter, “Appellants’ Reply Br. at __.”) (citing App. to Appellees’ Answering Br. at B261,
B272, B311).
79
     Oral Argument at 21:18–22:47.
80
     Id. at 21:09–24:59.

                                              19
and proper steps to ensure that the healthcare insurance and benefits available to

State retirees prior to October 3, 2022, or in which they were enrolled prior to that

time, remain in full force and effect.”81 The Court cannot conclude that the SEBC’s

actions in compliance with the trial court’s order mooted the SEBC’s appeal

challenging that order. There is a live controversy about the Stay Order, which the

next section of this opinion addresses.

          2.     The challenged agency decision was not a “Regulation” under the
                 relevant statute.

          The APA grants the Superior Court the authority to stay enforcement of an

agency regulation under 29 Del. C. § 10144, which states:

          When an action is brought in the Court for review of an agency
          regulation or decision, enforcement of such regulation or decision by
          the agency may be stayed by the Court only if it finds, upon a
          preliminary hearing, that the issues and facts presented for review are
          substantial and the stay is required to prevent irreparable harm.

There is no dispute that the Superior Court’s authority to issue a stay under Section

10144 is limited to actions challenging an agency regulation or decision. Neither

side argues that the SEBC’s action was a “decision,” which is specifically limited

by statute to circumstances not at issue in this case.82 Whether the SEBC’s action in

adopting a Medicare Advantage Plan was a regulation is the only aspect of the trial

81
     Stay Order at *5.
82
     29 Del. C. §§ 10102(3), 10142.

                                            20
court’s decision that Appellants challenge. If it was, the APA applies, and the SEBC

concedes that it did not comply with the APA’s procedures when it selected the

Medicare Advantage Plan.83

          The issue before us is a straightforward statutory interpretation question.

“Regulation” is defined in 29 Del. C. § 10102. The code states that “Regulation”:

          means any statement of law, procedure, policy, right, requirement or
          prohibition formulated and promulgated by an agency as a rule or
          standard, or as a guide for the decision of cases thereafter by it or by
          any other agency, authority or court. Such statements do not include
          locally operative highway signs or markers, or an agency's explanation
          of or reasons for its decision of a case, advisory ruling or opinion given
          upon a hypothetical or other stated fact situation or terms of an
          injunctive order or license.84

Neither party argues that the definition of “Regulation” is ambiguous. Section 9602

establishes the SEBC and its members85 and broadly defines its powers, duties, and

functions.86 29 Del. C. § 5210 further describes the SEBC’s powers and duties,

83
   Appellees argue that the statutory interpretation issue was not raised below. Appellees’
Answering Br. at 36 (“Defendants did not dispute below, nor do they now on appeal, that the SEBC
is subject to the APA governing the adoption regulations.”). This argument embraces an
unworkable and unhelpful view of the court’s role by implying that the court should ignore the
plain language of the statute because the parties did not sufficiently focus on it below.
84
     29 Del. C. § 10102(7).
85
     29 Del. C. § 9602(a).
86
   29 Del. C. § 9602(b)(1)–(5). The SEBC’s powers, duties, and functions include: “. . . (2)
Selection of all carriers or third-party administrators necessary to provide coverages to State
employees. (3) Authority to contract on an insured or self insured basis. (4) Authority to adopt
rules and regulations for the general administration of the employee benefit coverages. (5)
Authority to make and enter into any and all contracts with any agency of the State, or any outside
agency, for the purpose of assisting in the general administration of this section.” Id.

                                                21
which include controlling and managing the group health insurance program for

State employees and retirees.87

          When interpreting a statute, we attempt to ascertain and give effect to the

General Assembly’s intent.88

          First, we must determine whether the relevant statute is ambiguous. A
          statute is ambiguous when it can reasonably be interpreted in two or
          more different ways “or if a literal reading of its terms ‘would lead to
          an unreasonable or absurd result not contemplated by the legislature.’”
          If we determine that a statute is unambiguous, we give the statutory
          language its plain meaning. If we determine that a statute is ambiguous,
          “we consider the statute as a whole, rather than in parts, and we read
          each section in light of all others to produce a harmonious whole.” We
          presume that the General Assembly purposefully chose particular
          language and therefore construe statutes to avoid surplusage if
          reasonably possible.89

87
   Among the powers, duties, and functions the SEBC is granted, Section 5210 details that the
SEBC shall: “(1) Control and management of the State employees group health insurance program
provided for in this chapter. (2) Authority to establish the State employees group health insurance
program on an insured or self-insured basis. (3) Selection of the carriers or third-party
administrators deemed to offer the best plan to satisfy the interests of the State and its employees
and pensioners in carrying out the intent of this chapter. (4) Authority to adopt rules and
regulations for the general administration of the State employees group health insurance program.
(5) Authority to make and enter into any and all contracts with any agency of the State, or any
outside agency, for the purpose of assisting in the general administration of this chapter. . . .” 29
Del. C. § 5210(1)–(5).
88
     Sussex Cty. Dep’t of Elections v. Sussex Cty. Republican Comm., 58 A.3d 418, 422 (Del. 2013).
89
     Id. (footnotes omitted).

                                                22
“[U]ndefined code terms must be construed according to their common and

approved usage,”90 and this Court regularly refers to dictionaries in defining code

terms.91

           In Free-Flow, this Court addressed the scope of the APA and recognized that

not all agency actions fall within the Act.92 Our decision in Free-Flow offers a

helpful framework for this appeal. First,

           as a general rule, when an agency adopts a regulation, it must comply
           with the APA's procedures for adopting a regulation; and when an
           agency decides whether a named party is violating a law or regulation,
           it must comply with the APA's procedures for case decisions. But, when
           an agency carries out other functions, as when it implements a specific
           and detailed statutory directive, it may operate outside the scope of the
           APA.93

Second, whether an agency action is a regulation does not depend on the label given

to it by the agency.94

90
     Moore v. Wilm. Hous. Auth., 619 A.2d 1166, 1173 (Del. 1993).
91
  See, e.g., Id. at 1174 (citing WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY (1986) for the
definitions of the words “building” and “public” to define the code term “public building”).
92
     Free-Flow, 861 A.2d at 1236.
93
     Id.
94
  Baker v. Delaware Dep’t of Nat. Res. & Envtl. Control, 2015 WL 5971784, at *13 (Del. Super.
Oct. 7, 2015), aff’d, 137 A.3d 122 (Del. 2016) (agency action that meets the broad definition of
regulation “must be subject to the rigors of the APA whether they are located in documents
captioned ‘Regulations’ or whether they are contained in some other document”); Christina Educ.
Ass’n v. Delaware State Bd. of Educ., 1994 WL 637000, at *4 (Del. Super. May 25, 1994) (action
designated by agency as a “calendar change” was a de facto regulation).

                                               23
           Free-Flow did not, however, further explore the meaning of “regulation,” and

we therefore turn to that question now. The APA’s definition of “regulation”

contains three parts that are relevant to the parties’ dispute. “Regulation” means any

[(1)] statement of law, procedure, policy, right, requirement or prohibition [(2)]

formulated and promulgated by an agency [(3)] as a rule or standard, or as a guide

for the decision of cases . . .” 95 Each of these elements must be satisfied for an

agency action to be a regulation.

           First, a regulation must be a “statement of law, procedure, policy, right,

requirement or prohibition.”96 Appellees urge that the SEBC’s selection of a

Medicare Advantage plan was a “policy” because that action—if implemented—

would affect many people and would be “substantively transformational.”97

Specifically, Appellees emphasize the “drastic, adverse consequences on Retiree

healthcare rights” that the switch to Medicare Advantage would have, concluding

that the decision therefore is a “policy.”98 But this argument raises more questions

than it answers. Focusing on the effect of an agency’s decision seems to us

95
  29 Del. C. § 10102(7) (emphasis added). The parties do not substantively engage on the second
part of the definition, the issue of whether the SEBC’s actions were formulated and promulgated
by an agency, and this factor therefore is not an element in our decision.
96
     Id.
97
     Appellees’ Answering. Br. at 37, 39.
98
   Id. at 1. See Oral Argument at 27:28–27:58 (“It was a significant difference from Medicare. . . .
[it] impose[d] a lot of rules that are in the papers about prior authorizations out of network, [] out-
of-pocket expenses and things like that. This was major.”).

                                                 24
subjective and unwieldy. If the meaning of policy depends on an agency action’s

ultimate effect, the agency would be required to know and weigh from the outset the

effect of any proposed action. That standard also would require an agency to predict

how different people or groups would be affected, which will vary from case to case.

       Generally, a “policy” is defined as “a definite course or method of action

selected from among alternatives and in light of given conditions to guide and

determine present and future decisions” or “a high-level overall plan embracing the

general goals and acceptable procedures especially of a governmental body.”99 The

SEBC’s decision does not easily satisfy this meaning of “policy.” To the contrary,

29 Del. C. § 5203 expressly permits the SEBC to adopt a Medicare part C plan.100

This specific statutory directive, which authorizes the challenged agency action,

undermines Appellees’ position that this was a policy decision made by the SEBC.101

Instead, the SEBC selected a type of plan from a list of options chosen by the General

99
   Policy, Merriam-Webster (2024) https://www.merriam-webster.com/dictionary/policy (Mar.
14, 2024) (emphasis added).
100
    29 Del. C. § 5203(a)–(b) (“(a) The basic health care insurance plan for state employees shall be
equivalent to the ‘minimum creditable coverage’ as defined by applicable federal law and include
coverage for contraceptive methods under § 5203A of this title. . . . (b) The plan shall be for regular
employees and eligible pensioners under 65 years of age and for employees and eligible pensioners
over 65 years of age who are not entitled to services, rights or benefits under the federal Medicare
Program (U.S. Public Law 89-97, as amended) [42 U.S.C. § 1395 et seq.]; and a plan which is
supplemental to Medicare parts A and B, or constructed as a plan under Medicare part C, for
eligible pensioners entitled to services, rights or benefits under the federal Medicare Program.”).
101
   This is consistent with Free-Flow, where this Court held that “[w]e disagree with the premise
that all of what an agency does must culminate in a regulation or case decision.” Free-Flow, 861
A.2d at 1236.

                                                 25
Assembly. Free-Flow establishes that “when an agency . . . implements a specific

and detailed statutory directive, it may operate outside the scope of the APA.”102

Here, the actions that the SEBC took when selecting a plan arguably were consistent

with Free-Flow’s determination of when an agency action falls outside the APA’s

scope. Ultimately, however, we need not determine whether the SEBC’s action was

a “policy” because, in any event, the challenged decision was not a “rule or

standard.”

            The third part of the definition of “regulation” requires the agency action to

be one that qualifies “as a rule or standard, or as a guide for the decision of cases

thereafter . . .” 103 Appellees did not address in their brief and could not coherently

answer at oral argument how the SEBC’s action to select a Medicare plan would be

used “as a guide for the decision of cases thereafter.” Instead, Appellees asserted, if

obliquely, that the action was a “rule or standard.” Appellees did not, however,

engage with the plain meaning of those words, retreating instead to their focus on

the significant (negative) effects felt by State retirees as a result of the SEBC’s

action.

102
      Id.
103
      29 Del. C. § 10102(7) (emphasis added).

                                                26
          Merriam-Webster defines a “rule” as “a prescribed guide for conduct or

action” or a “regulating principle.”104         “Standard” is defined as “something

established by authority, custom, or general consent as a model or example.”105 Both

words require the agency action to guide, regulate, or act as a model for future action.

The SEBC’s adoption of a particular health plan permitted by statute does not meet

any of these definitions. To the contrary, the adoption of a particular plan, authorized

in advance by the General Assembly, does not dictate future agency action and may

be revisited in the future as the SEBC deems appropriate. Because the agency action

was not a “rule or standard,” it was not a regulation under the APA, and the Superior

Court lacked jurisdiction to stay that action under Title 29, Section 10144.

B.        The cross-appeal challenging the Superior Court’s attorneys’ fee ruling
          is moot.

          On cross-appeal, Appellees contend that the Superior Court abused its

discretion by not considering and granting an award of attorneys’ fees to

Appellees.106        Specifically, Appellees argue that “by stopping [Appellants’]

unilateral conversion of retirees’ healthcare plan to Medicare Advantage,

[Appellees] achieved a substantial common benefit that merits an award of

104
   Rule, Merriam-Webster (2024) https://www.merriam-webster.com/dictionary/rule (Mar. 14,
2024).
105
   Standard, Merriam-Webster (2024) https://www.merriam-webster.com/dictionary/standard
(Mar. 14, 2024).
106
      Appellees’ Answering Br. at 44.

                                           27
attorneys’ fees.”107 In response, Appellants contend that Appellees’ application for

attorneys’ fees was properly rejected by the Superior Court because Appellees never

pleaded a claim for fees and thereby waived that claim.108 Additionally, Appellants

argue that the common benefit doctrine is inapplicable.109                   At oral argument,

Appellees withdrew their common benefit argument in light of this Court’s recent

decision in In re Delaware Public Schools Litigation.110 As such, this opinion does

not discuss the merits of that argument.

            In addition to their common benefit argument, Appellees maintain that the

State officials’ “reprehensible conduct” supports an award of fees.111 In response,

Appellants contend that Appellees’ reliance on the bad-faith exception to the

American Rule fails because Appellees cannot establish “extraordinary

circumstances here, nor can they establish by clear and convincing evidence that the

SEBC acted in subjective bad faith[,]” and as such attorneys’ fees are not

warranted.112

107
      Id.
108
      Appellants’ Reply Br. at 33.
109
      Id. at 34–39.
110
      In re Delaware Pub. Sch. Litig., --- A.3d ---, 2024 WL 332738 (Del. Jan. 30, 2024).
111
      Appellees’ Answering Br. at 50.
112
      Appellants’ Reply Br. at 39–42.

                                                 28
          Delaware law follows the American Rule, under which litigants are generally

responsible for paying their own litigation costs.113 Under the American Rule, “a

prevailing party is responsible for the payment of his own counsel fees in the absence

of statutory authority or contractual undertaking to the contrary.”114                      Courts

recognize “limited equitable exceptions” to the American Rule, including one for a

party’s “bad faith” conduct throughout litigation.115

          Here, Appellees’ argument regarding bad faith is moot because fee shifting is

available only against a losing party in favor of a prevailing party.116 By reversing

the decision below, fee shifting is foreclosed, and it is not necessary for this Court

to engage with Appellees’ bad faith arguments.

                                     IV.     CONCLUSION

          For the foregoing reasons, we reverse the Superior Court’s order dated

October 19, 2022 staying implementation of a Medicare Advantage Plan for State

retirees and the Superior Court’s May 22, 2023 order entering final judgment in this

case.

113
      Mahani, 935 A.2d at 245.
114
      Tandycrafts, Inc. v. Initio Partners, 562 A.2d 1162, 1164 (Del. 1989).
115
      Montgomery Cellular, 880 A.2d at 227.
116
   See Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 245 (1975) (noting that “the
general ‘American rule’ [is] that the prevailing party may not recover attorneys’ fees as costs or
otherwise” unless there is an applicable statutory authorization for such an award or the award falls
within an exception to the American rule).

                                                  29