Court Opinion

ID: 6221524
Source: CourtListenerOpinion
Date Created: 2022-02-14 18:02:52.197261+00
Date Added: 2024-06-11T08:57:22.578038
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

SHAREHOLDER REPRESENTATIVE         )
SERVICES LLC, solely in its capacity as
                                   )
the Representative of the Stockholders,
                                   )
                                   )
          Plaintiff,               )
                                   )
      v.                           )         C.A. No. 2021-0465-KSJM
                                   )
DC CAPITAL PARTNERS FUND II, L.P., )
and CALIBURN HOLDINGS LLC (F/K/A )
JANUS HOLDCO LLC),                 )
                                   )
          Defendants.              )

                            MEMORANDUM OPINION

                          Date Submitted: November 4, 2021
                           Date Decided: February 14, 2022

Thomas A. Uebler, Joseph L. Christensen, Kathleen A. Murphy, MCCOLLOM D’EMILIO
SMITH UEBLER LLC, Wilmington, Delaware; Counsel for Plaintiff Shareholder
Representative Services LLC.

Philip Trainer, Jr., Marie M. Degnan, ASHBY & GEDDES, Wilmington, Delaware; Counsel
for Defendants DC Capital Partners Fund II, L.P. and Caliburn Holdings LLC.

McCORMICK, C.
       This is a contract dispute brought by sellers to compel buyers to pay indemnity

holdbacks owed under a stock purchase agreement. This decision denies the defendants’

motion to dismiss the complaint.

       The defendants’ lead argument in support of dismissal is that this court lacks subject

matter jurisdiction because this case involves a damages claim for breach of contract.

Historically, the Superior Court has had subject matter jurisdiction over this type of action.

In 1999, the Delaware General Assembly adopted Section 111 of the Delaware General

Corporation Law granting this court concurrent jurisdiction to interpret certain types of

instrument, including agreements for the sale of stock. Section 111 provides that this court

“may” exercise subject matter jurisdiction over claims within its scope. The defendants

argue that this language grants the court discretion to decline jurisdiction over claims

described by Section 111 that do not otherwise fall within the court’s subject matter. The

plaintiff argues that this language grants a litigant the right to elect to file such claims in

this court and that, once the election is made, the court may not decline jurisdiction. This

decision adopts the plaintiff’s interpretation and concludes that the court lacks the

discretion to decline jurisdiction once it is established under Section 111.

       The defendants also argue that aspects of the plaintiff’s claims should be dismissed

for lack of ripeness because final damages have not yet been awarded in the underlying

action giving rise to claims for indemnification, but this decision rejects that argument too.

At the very least, the plaintiff’s claims challenging the timeliness and other aspects of the

indemnification claims are ripe.
I.      FACTUAL BACKGROUND

        The facts are drawn from the Verified Complaint (the “Complaint”).1

        Defendant Caliburn Holdings LLC (“Caliburn”) acquired Janus ESOP Holdings

Inc. (the “Company”) pursuant to a Stock Purchase Agreement (the “Agreement”) dated

November 20, 2017.

        The Agreement established two indemnity holdbacks, which are amounts withheld

from the price paid by the buyer at closing to cover the seller’s indemnity obligations. The

first holdback in the amount of $1,775,000, the “Indemnification Holdback,” secured all

indemnifiable claims. The second holdback in the amount of $2,225,000, the “Special

Indemnity Holdback,” secured indemnity claims specific to litigation identified in the

Agreement. Sometimes parties stipulate to place holdback amounts in escrow, but the

parties here did not do so. Defendant DC Capital Partners Fund II, L.P. (“DC Capital” and

together with Caliburn, “Defendants”), however, guaranteed the holdbacks.

        The holdbacks became payable on their expiration date, subject to properly asserted

indemnification claims. The Indemnification Holdback expired 12 months after closing,

on December 15, 2018. The Special Indemnity Holdback expired 18 months after closing,

on June 15, 2019.

        Caliburn asserted three indemnification claims against the Indemnification

Holdback. The first claim was accepted and paid in full reducing the Indemnification

Holdback to $1,337,630. The second claim sought $2,062,270 for overbilling of the U.S.

1
    See C.A. No. 2021-0465-KSJM, Docket (“Dkt.”) 1 (“Compl.”).

                                             2
Department of State by a Caliburn subsidiary (the “DCAA Audit Claim”). The third claim

sought $6,201,920 for Caliburn’s tax liabilities to the Afghan Large Taxpayer Office (the

“Afghan Tax Claim”). Based on these claims, Caliburn did not release the Indemnification

Holdback to Plaintiff on December 15, 2018.

         Caliburn asserted three claims against the Special Indemnity Holdback. The first

claim was for $7,147,000 of projected losses from an ongoing audit by the Defense

Contract Audit Agency. The second and third claims were for $160,000 in settlement costs

and $3,919,020.98 in litigation costs, respectively, related to a suit with an entity named

Bestoon. Based on these claims, Caliburn did not release the Special Indemnity Holdback

on June 15, 2019.

         Plaintiff Shareholder Representative Services LLC (“Plaintiff”) represents sellers

under the Agreement. Plaintiff filed this action on May 27, 2021 to compel payment of the

holdbacks. Plaintiff also seeks pre-judgment interest at the contractually established rate

of 10.5% and attorneys’ fees.

         On June 24, 2021, Defendants moved to dismiss or, alternatively, stay the

Complaint. The motion was fully briefed on August 25, 2021,2 and the court heard oral

arguments on November 4, 2021.3

2
 Dkt. 10, Opening Br. in Supp. of Defs.’ Mot. to Dismiss or, in the Alt., to Stay (“Defs.’
Opening Br.”); Dkt. 12, Pl.’s Br. in Opp’n to Defs.’ Mot. to Dismiss or, in the Alt., to Stay;
Dkt. 14, Reply Br. in Further Supp. of Defs.’ Mot. to Dismiss or, in the Alt., to Stay (“Defs.’
Reply Br.”).
3
    Dkt. 18, Tr. of Oral Arg. on Defs.’ Motion to Dismiss or Stay (“Oral Arg. Tr.”).

                                              3
II.    LEGAL ANALYSIS

       Defendants have moved to dismiss this action for lack of subject matter jurisdiction.

Alternatively, Defendants have moved to dismiss or stay this action on the grounds that the

DCAA Audit Claim is not ripe.4

       A.     Subject Matter Jurisdiction

       The Court of Chancery is one “of ‘limited jurisdiction’; it acquires subject matter

jurisdiction ‘only when (1) the complaint states a claim for relief that is equitable in

character, (2) the complaint requests an equitable remedy when there is no adequate

remedy at law or (3) Chancery is vested with jurisdiction by statute.’”5 Plaintiff bears the

burden of establishing the court’s subject matter jurisdiction.6

       Plaintiff argues that this court has subject matter jurisdiction over this action under

8 Del. C. § 111. In relevant part, Section 111 provides that:

              [a]ny civil action to interpret, apply, enforce or determine the
              validity of the provisions of . . . [a]ny instrument, document or
              agreement . . . by which a corporation creates or sells, or offers
              to create or sell, any of its stock, or any rights or options
              respecting its stock . . . may be brought in the Court of
              Chancery, except to the extent that a statute confers exclusive

4
 In briefing, Defendants argued that both the Afghan Tax Claim and the DCAA Audit
Claim should be stayed because neither calculation is final. Defs.’ Opening Br. at 32.
Defendants later narrowed their ripeness argument to target the DCAA Audit Claim only.
Oral Arg. Tr. at 19:14–18.
5
 Vama F.Z. Co. v. WS02, Inc., 2021 WL 1174690, at *2 (Del. Ch. Mar. 29, 2021) (quoting
Perlman v. Vox Media, Inc., 2019 WL 2647520, at *4 (Del. Ch. June 27, 2019), aff’d, 2021
WL 1042985 (Del. Mar. 18, 2021) (TABLE)).
6
 See Hall v. Coupe, 2016 WL 3094406, at *2 (Del. Ch. May 25, 2016); Morgan v.
Carpenter, 2014 WL 7192476, at *3 (Del. Ch. Dec. 18, 2014); Pitts v. City of Wilm., 2009
WL 1204492, at *5 (Del. Ch. Apr. 27, 2009).

                                              4
                jurisdiction on a court, agency or tribunal other than the Court
                of Chancery.7

         Defendants concede that the Agreement is an instrument for the sale of stock within

the scope of Section 111.8 Defendants argue, however, that the court should nevertheless

decline jurisdiction. Defendants’ argument has three parts. They first argue that the

permissive language of Section 111 grants the Court of Chancery nonexclusive or

concurrent jurisdiction. They next argue that the court has the discretion to decline

jurisdiction over actions brought pursuant to Section 111. They last argue that the court

should exercise its discretion here to deny jurisdiction because Plaintiff’s claims do not

implicate this court’s specialized expertise.

         Defendants’ first premise is correct—Section 111 confers this court with

nonexclusive jurisdiction over actions within its scope, as is evident from the plain

language of Section 111. Other provisions of the DGCL expressly vest the Court of

Chancery with “exclusive jurisdiction” to hear matters brought under that particular

section.9 By contrast, the concluding phrase of Section 111(a) provides that actions

7
    8 Del. C. § 111(a) (emphasis added).
8
 Defs.’ Opening Br. at 23–24 (stating that “there is no question that the SPA at issue here
meets the definition of §111”).
9
  See 8 Del. C. § 145(k) (“The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise.” (emphasis added)); id. § 203(e)
(“The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine
all matters with respect to this section.” (emphasis added)); id. § 205(e) (“The Court of
Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions
brought under this section.” (emphasis added)); id. § 220(c) (“The Court of Chancery is

                                                5
thereunder “may be brought in the Court of Chancery, except to the extent that a statute

confers exclusive jurisdiction on a court, agency or tribunal other than the Court of

Chancery.”10 The word “may” in the first clause indicates that this court is a nonexclusive

option for litigants. Indeed, the exception found in the second clause that excludes actions

delegated to the exclusive jurisdiction of other agencies or tribunals is only necessary

because Section 111 creates concurrent and not exclusive jurisdiction. The nonexclusive

nature of Section 111 jurisdiction has been acknowledged by the General Assembly11 and

by multiple decisions of this court.12

hereby vested with exclusive jurisdiction to determine whether or not the person seeking
inspection is entitled to the inspection sought.” (emphasis added)).
10
     8 Del. C. § 111 (emphasis added).
11
  Del. S.B. 371, 148th Gen. Assembly, Synopsis (2016) (stating that “[t]he amendment to
Section 111(a)(2) permits the Court of Chancery to exercise non-exclusive subject matter
jurisdiction over civil actions” described in the statute (emphasis added)).
12
   See, e.g., Kraft v. WisdomTree Invs., Inc., 145 A.3d 969, 974 (Del. Ch. 2016) (observing
that “8 Del. C. § 111, . . . provides the Court of Chancery with nonexclusive jurisdiction to
interpret, apply, enforce or determine the validity of certificates of incorporation, bylaws,
stock instruments, and other corporate instruments” (citation omitted, emphasis added));
Duff v. Innovative Disc. LLC, 2012 WL 6096586, at *6 (Del. Ch. Dec. 7, 2012) (holding
that, with regard to Section 111’s analogue, 6 Del. C. § 18-111, “[d]efendant is correct that
the statute’s [Section 111 analogue, 6 Del. C. § 18-111] use of the word ‘may’ means that
the jurisdiction it authorizes is concurrent, as opposed to exclusive”). One case of the
Delaware Superior Court has been cited for the proposition that jurisdiction under Section
111 is effectively exclusive. In Albert v. Alex. Brown Mgmt. Servs., Inc., 2004 WL
2050527 (Del. Super. Ct. Sept. 15, 2004), two sets of limited partners brought suit against
general partners for breach of fiduciary duty. The defendants moved to dismiss for lack of
subject matter jurisdiction, arguing that this court had sole jurisdiction over the dispute
under Section 111’s DRULPA analogue, 6 Del. C. § 17-111. In granting the motion, the
court held that “Delaware courts have consistently interpreted § 17-111 as maintaining the
. . . rule that Chancery has sole jurisdiction over internal partnership affairs, except after
some event has occurred, such as an accounting or drafting a separate instrument, that
obviates equity’s superior ability to resolve all outstanding matters between the parties.”
Id. at *5. Litigants in this court have cited to this statement for the proposition that Section

                                               6
         Defendants’ second premise—that Section 111 is discretionary—involves a more

nettlesome analysis. Plaintiff disputes that Section 111 grants the court discretion to

decline jurisdiction over cases described in the statute, an interpretation that this decision

refers to as the “non-discretionary interpretation.” Defendants contend that the word

“may” renders this court’s exercise of subject matter jurisdiction under Section 111

discretionary, an interpretation that this decision refers to as the “discretionary

interpretation.”

         “The goal of statutory [interpretation] is to determine and give effect to legislative

intent.”13 The analysis starts and often ends with the plain language of the statute.14 If the

plain language is reasonably susceptible to multiple meanings, the court ascertains the

meaning of the statute through other sources and tools, including by reviewing the statute’s

legislative history and deploying canons of statutory construction.15

17-111 confers exclusive jurisdiction. But the Superior Court went on to qualify this
statement, concluding that for the Court of Chancery to have “sole jurisdiction” to interpret
partnership agreements “makes sense in light of the fact that disputes between partners will
almost always involve equitable issues.” Id. The court did not find that Section 17-111
confers exclusive jurisdiction over actions that do not involve equitable claims or remedies.
13
     Eliason v. Englehart, 733 A.2d 944, 946 (Del. 1999).
14
   See Bd. of Adjust. of Sussex Cty. v. Verleysen, 36 A.3d 326, 331 (Del. 2012) (“[W]hen a
statute is clear and unambiguous there is no need for statutory interpretation.” (citing State
v. Skinner, 632 A.2d 82, 85 (Del. 1993))); In re F. Mobile, Inc., --- A.3d ---, 2022 WL
322013, at *9 (Del. Ch. Feb. 3, 2022) (collecting cases concerning the principles of
statutory interpretation).
15
  Clark v. State, 184 A.3d 1292 (Del. 2018) (TABLE) (“When a statute is ambiguous, a
court may refer to the legislative history to interpret the statute.” (citing Arnold v. Soc’y for
Sav. Bancorp, Inc., 650 A.2d 1270, 1287 (Del. 1994))); Agar v. Judy, 151 A.3d 456, 473
(Del. Ch. 2017) (“When interpreting statutory language, Delaware courts deploy well-
established canons of statutory interpretation.”).

                                               7
          The plain language of Section 111 favors the non-discretionary interpretation. The

basis in the plain language for interpreting Section 111 as discretionary is the word “may.”

“May” is a helping modal verb used in conjunction with a main verb to indicate permission.

Here, the main verb (“be brought”) is phrased in the passive voice, forcing attention to the

direct object (“any civil action”), and requiring the reader to infer the identity of the subject-

actor who is granted permission to bring a civil action. But the inference is not difficult.

Who “brings” actions? Plaintiffs. Courts do not “bring” actions. The plain language of

Section 111 thus grants plaintiffs permission to bring actions described in that statute in

the Court of Chancery. The permissive language of Section 111 does not, on its face,

suggest that the General Assembly intended to grant this court the discretion to decline

jurisdiction over cases described in that statute.

          Although the Delaware Supreme Court has never interpreted the portion of Section

111 at issue, the non-discretionary interpretation finds support in this court’s Duff

decision.16 There, the court concluded that identical language in Section 111’s Delaware

Limited Liability Company Act analogue, 6 Del. C. § 18–111, did not grant the court the

discretion to decline subject matter jurisdiction.17 Like here, the defendants argued that

Section 18-111 created concurrent jurisdiction and that the court could exercise its

discretion to decline jurisdiction over actions described in the statute. The court agreed

16
     2012 WL 6096586.
17
     See id. at *6.

                                                8
that Section 18-111 created concurrent jurisdiction but rejected the rest of the argument,

holding that:

                  litigants . . . who state a claim under 6 Del. C. § 18-111, have
                  a choice of pursuing that claim in the Court of Chancery or in
                  another appropriate forum. But, [the movant] has not cited any
                  authority, nor does the Court know of any, that would imply
                  that once such a plaintiff has chosen to bring its claim here, this
                  Court still would have the discretion to refuse to hear it. As I
                  read the statute, this Court does not have such discretion.18

           Defendants root their discretionary interpretation of Section 111 in Helix, where this

court cited the permissive language of Section 111 when declining to assert subject matter

jurisdiction over a claim for breach of contract.19 In Helix, the court concluded that the

plaintiff had not adequately alleged a basis for subject matter jurisdiction in the complaint

and raised this concern sua sponte. In response, the plaintiff stretched to argue that Section

111 might provide a basis for jurisdiction, although the complaint did not expressly identify

it as a basis. In the alternative, the plaintiff requested jurisdictional discovery for the

purpose of demonstrating that Section 111 provided a basis for subject matter jurisdiction.

The court rejected the plaintiff’s request and transferred the matter to the Superior Court

pursuant to 10 Del. C. § 1902.20

           At the end of the Helix court’s analysis, the court cited in passing the permissive

language of Section 111(a) (“may be brought”) in support of the observation that “the

18
     Id.
19
  See Helix Generation LLC v. TransCan. Facility USA, Inc., 2019 WL 2068659, at *2
(Del. Ch. May 10, 2019).
20
     Id.

                                                  9
Superior Court has indisputable jurisdiction here: Section 111(a), to the extent it applies,

provides permissive, not mandatory jurisdiction.”21 Defendants point to this passage of

Helix as support for the discretionary interpretation, but the better take on this passage is

that the court was emphasizing that the Superior Court unquestionably had jurisdiction over

the matter in light of the concurrent nature of jurisdiction vested under Section 111. Helix

should not be read to support the discretionary interpretation.22

           To the extent that Duff and cases interpreting Helix demonstrate that the plain

language of Section 111 is reasonably susceptible to multiple meanings, the next best

indicators of legislative intent are contemporaneous legislative records.23         Here, the

synopsis does not directly inform the issue.24 And Section 111 passed through the judiciary

21
     Id.
22
   In fairness, the quoted passage of Helix could be read as supporting the discretionary
interpretation. Indeed, I flagged that Helix could be read in this manner in Legent. Legent
Gp., LLC v. Axos Fin., Inc., 2021 WL 73854, at *2 n.14 (Del. Ch. Jan. 8, 2021). And in
Online Healthnow, Inc. v. CIP OCL Investors, LLC, the Superior Court interpreted Helix
similarly and described Section 111 as conferring “discretionary jurisdiction.” 2020 WL
3047230, at *3 (Del. Super. Ct. May 28, 2020). In Legent, however, I jumped the analysis
and found that the exercise of jurisdiction was appropriate even if I had the discretion to
decline it. And in Online Healthnow, Section 111 was really just a side-issue. That case
involved the enforcement of a forum selection clause and did not require the court to
interpret the language of Section 111 directly. In the end, the plain language of Section
111 stands on its own and can be reconciled with Helix.
23
  See, e.g., Kent Gen. Hosp. (Inc.) v. Kent Cty. Bd. of Assessment, 1995 WL 478797, at *4
(Del. Ch. July 19, 1995) (stating that generally “[t]he synopsis of the bill is a proper source
from which the court can discern the legislative intent” (citing Carper v. New Castle Cty.
Bd. of Educ., 432 A.2d 1202, 1205 (Del. Ch. 1981))).
24
  See Del. S.B. 137, 140th Gen. Assembly, Synopsis (1999) (“Section 2. Section 111 is
new. It clarifies that the Court of Chancery may entertain actions to interpret, apply or
enforce any provision of the certificate of incorporation or bylaws of a corporation,
regardless of whether there is some independent basis for subject matter jurisdiction in that

                                              10
committees and the full chambers without substantive comment.25 The court may also look

to contemporaneous commentary as an indicator of legislative intent,26 but that

commentary is similarly uninformative on this issue.27

court. Section 111 is not intended to limit in any way the subject matter jurisdiction of the
Court of Chancery established under preexisting law.”).
25
   See House Judiciary Comm. Mins. from the June 9, 1999 Meeting at 2 (“The final item
on the agenda was SB137, related to the General Corporation Law. Secretary of State Freel
expressed his support of this bill. Without further discussion, the committee motioned to
release the bill. Rep Ewing made that motion, with Rep. Buckworth seconding. The vote
to release SB137 was 7 on its merits.” (emphasis and capitalization omitted)). When the
Senate voted unanimously in support of then-SB 137, the bill’s sponsor Senator Thomas
Sharp stated: “Senate Bill 137 is the annual legislation we get from the Delaware Bar
Association to update our general corporation laws. This bill has been cleared by the
corporation committee of the Delaware bar association, has been reviewed and approved
by the Secretary of State’s Office and all other people who have an interest in our
corporation laws.” Del. S.J. 140th Gen. Assembly 98 (1999) (statement of Senator Thomas
Sharp) (audio on file).
26
   See, e.g., Insituform of N. Am., Inc. v. Chandler, 534 A.2d 257, 265 (Del. Ch. 1987)
(looking to “contemporaneous and authoritative commentary” to inform legislative intent
behind a statutory amendment).
27
   The prevailing wisdom is that Section 111 was adopted to give “the Court of Chancery
jurisdiction over some subject matter that is not inherently equitable to take advantage of
the Court’s special corporate expertise.” Kraft, 145 A.3d at 974 (collecting authorities);
accord Lewis S. Black, Jr. & Frederick H. Alexander, Analysis of the 1999 Amendments to
the Delaware General Corporation Law 8-2 (1999) (“In light of the Court of Chancery’s
national reputation to handle business litigation, the drafters of the amendment believed
that giving the Chancery Court jurisdiction over all matters involving the interpretation of
corporate charters and by-laws was in the best interests of Delaware’s jurisprudence and
its corporate constituency.”); James L. Holzman & Thomas A. Mullen, 2000 Review of
Developments in Corporation Law 84 (2000) (“This new section confers upon the
Delaware Court of Chancery subject matter jurisdiction over actions to interpret, apply or
enforce the provisions of the certificate of incorporation or the bylaws. The statute affirms
the Court of Chancery’s jurisdiction over such intra-corporate disputes where equitable
jurisdiction may currently be uncertain. The new provision is not intended to limit the
subject matter jurisdiction of the Court of Chancery under prior law. Although the
provision was modeled upon Section 17-111 of the Delaware limited partnership statute
and Section 18-111 of the Delaware LLC statute, it contrasts with those provisions in that
it does not confer Chancery jurisdiction over all disputes involving the rights and duties of

                                             11
         In the absence of evidence of clear legislative intent, this court may resort to canons

of statutory construction. Providing soft support for the non-discretionary interpretation is

the canon that a statute should be read with a presumption against changes to the common

law.28 Defendants argue for an interpretation of Section 111 that allows the court to decline

jurisdiction whenever the cause of action does not implicate the court’s special expertise.29

Under common law, however, “great weight [is afforded] to plaintiff’s choice of forum,”

and a court will ignore that choice “only [in] extraordinary circumstances.”30 Interpreting

the corporation, the directors, and the stockholders.”). Proponents of both discretionary
and non-discretionary interpretations of Section 111 could wield this sentiment in their
favor. Proponents of a discretionary approach could argue that it is in the best interests of
the beneficiaries of this court to grant the court the discretion to limit filings on its docket
to those issues involving the court’s expertise. Proponents of a non-discretionary approach
could argue that allowing the court to decline jurisdiction as to a wide variety of claims
could lead to wasteful inefficiencies for corporate constituents pursuing litigation under
Section 111. In the end, the commentary cuts both ways and does not directly address
whether the legislature intended to grant this court the discretion to decline jurisdiction
under Section 111.
28
   See, e.g., Makin v. Mack, 336 A.2d 230, 234 (Del. 1975) (stating that the “repeal of
common law rights and duties is not favored and is to be announced only in clear cases”)
(citing Cohen v. Krigstein, 114 A.2d 225, 227 (Del. Super. Ct. 1955)); Weiss v. Weiss, 952
A.2d 149, 153 (Del. Ch. 2007) (noting that when a court interprets an ambiguous statutory
provision the court must assume that the common law was not displaced unless “clearly
indicated” by the statute’s language); Kulp v. Timmons, 944 A.2d 1023, 1031 (Del. Ch.
2002) (construing a statute against altering the common law because there was no evidence
the General Assembly intended to “displace the applicable principles of common law”);
Nelson v. Frank E. Best Inc., 768 A.2d 473, 482 (Del. Ch. 2000).
29
     See, e.g., Defs.’ Opening Br. at 24, 29.
30
   RWI Acq. LLC v. Todd, 2012 WL 1955279, at *6 (Del. Ch. May 30, 2012) (citations and
internal quotation marks omitted); see also Gramercy Emerging Mkts. Fund v. Allied Irish
Banks, P.L.C., 173 A.3d 1033, 1037 (Del. 2017) (“The short-hand phrase overwhelming
hardship emerged from the post Cryo–Maid case law, reflecting our courts’ reluctance to
lightly disturb a plaintiff’s first choice of fora.”) (citation and internal quotation marks
omitted); Taylor v. LSI Logic Corp., 689 A.2d 1196, 1198 (Del. 1997) (“Delaware courts
consistently uphold a plaintiff’s choice of forum except in rare cases.”) (citations omitted);

                                                12
Section 111 as discretionary under a special-expertise test would deviate from multiple

common law rules that give deference to a plaintiff’s choice of forum. This point favors a

non-discretionary interpretation.

       For these reasons, the court adopts the non-discretionary interpretation of Section

111.31 In light of this holding, the decision does not address the third part of Defendants’

argument—that the court should exercise its discretion to deny jurisdiction. This decision

also does not reach Plaintiff’s alternative arguments for invoking the court’s subject matter

jurisdiction.32 Because the parties do not dispute that the Complaint asserts a cause of

action under Section 111, this court has subject matter jurisdiction over this action. The

motion to dismiss for lack of subject matter jurisdiction is denied.

Aveta, Inc. v. Colon, 942 A.2d 603, 605 (Del. Ch. 2008) (“Delaware’s courts frequently
repeat the adage that only in rare cases can a defendant successfully defeat a plaintiff’s
choice of forum.”) (citations omitted); Asten v. Wangner, 1997 WL 634330, at *1 (Del.
Ch. Oct. 3, 1997) (“It is well recognized, however, that plaintiffs should not be denied their
choice of an appropriate forum absent significant countervailing circumstances related to
judicial economy, efficiency and fairness.”).
31
   To be clear, I admire the boldness of the discretionary interpretation and would love for
that to be the law of the land. After all, what more could a busy judge want than the ability
to unilaterally decline to hear certain cases brought before her or, perhaps as exciting, the
ability to gift cases to her sister court like they are cars on Oprah? Absent further direction
from the high court or the General Assembly, however, I am obligated to stick to the non-
discretionary interpretation for the reasons set out in this decision.
32
   Plaintiff also argues that its claims are equitable and thus the court has subject matter
jurisdiction under 10 Del C. § 341, but the court does not reach this issue subject matter
jurisdiction is appropriate under Section 111.

                                              13
           B.    Ripeness

           Delaware courts will decline to exercise jurisdiction over a case unless the

underlying controversy has “matured to a point where judicial action is appropriate.”33 The

purpose of the ripeness doctrine is twofold: first, it seeks to conserve limited judicial

resources, and second, it allows the court to “avoid rendering a legally binding decision

that could result in premature and possibly unsound lawmaking.”34

           Determining whether a claim is ripe requires a “common sense assessment” that

weighs the movant party’s interest in seeking immediate relief against the court’s concern

for conserving judicial resources by avoiding issuance of a premature decision. 35 If

“litigation sooner or later appears to be unavoidable and where the material facts are static,”

a case is ripe for consideration.36 However, “[i]f facts are still unknown or changing, . . .

the court should be reluctant to weigh into the controversy, for fear it might be offering

only advice and a premature binding decision.”37

           Defendants argue that the DCAA Audit Claim is not ripe because “[a] final decision

from the U.S. Army Corps of Engineers is pending,” and therefore the final indirect cost

33
  Stroud v. Milliken Enters., Inc., 552 A.2d 476, 480 (Del. 1989) (citing Schick Inc. v.
Amalg. Clothing & Textile Workers Union, 533 A.2d 1235, 1239 (Del. Ch. 1987)).
34
  XL Specialty Ins. Co. v. WMI Liquid. Tr., 93 A.3d 1208, 1217 (Del. 2014) (citing Stroud,
552 A.2d at 480).
35
     Id.
36
  Town of Cheswold v. Cent. Del. Bus. Park, 188 A.3d 810, 816 (Del. 2018) (quoting XL
Specialty, 93 A.3d at 1217).
37
 Id. (citing Calagione v. City of Lewes Plan. Comm’n, 2007 WL 4054668, at *3 (Del. Ch.
Nov. 13, 2007)).

                                               14
rates are uncertain.38 Defendants further contend that it is possible the U.S. Army Corps

of Engineers determines there are no damages, which would “obviate the need for judicial

intervention.”39

         Because Defendants’ ripeness argument is limited to the DCAA Audit Claim, and

Defendants contend that the other aspects of the case are ripe for resolution, the most

Defendants could reasonably achieve from their ripeness argument is a stay of proceeding

in connection with the DCAA Audit Claim. A stay in connection with the DCAA Audit

Claim is not warranted here.

         Although it is true that potential damages resulting from the DCAA Audit Claim are

not certain, the facts are sufficiently static so as to render the entire dispute ripe. Plaintiff’s

claim for the indemnification holdbacks accrued on December 15, 2018 and June 15, 2019,

when the holdbacks were due to be released. Defendants have yet to pay those amounts.

Plaintiff raises process deficiencies with the DCAA Audit Claim, arguing that it was

untimely and otherwise deficient because Caliburn failed to cooperate with Plaintiff in

defending against the proceedings, failed to keep Plaintiff reasonably informed, failed to

consult with Plaintiff prior to settlement, and failed to attempt to resolve its dispute with

Plaintiff in good faith. The court will need to evaluate the process disputes to determine

whether the holdbacks were proper. These aspects of the parties’ dispute over the DCAA

Audit Claim are ripe for judicial determination.

38
     Defs.’ Opening Br. at 31–32.
 Defs.’ Reply Br. at 19–20 (quoting XL Specialty, 93 A.3d at 1217–18 (internal quotation
39

marks omitted)).

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III.   CONCLUSION

       For the foregoing reasons, Defendants’ motion to dismiss or, in the alternative stay,

is DENIED.

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