Court Opinion

ID: 9393471
Source: CourtListenerOpinion
Date Created: 2023-05-10 15:03:19.03002+00
Date Added: 2024-06-11T17:18:53.254041
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

                                          May 10, 2023

Via Electronic Mail:
Alex Mathew
Alfromdc202@gmail.com

          RE: In re AMC Entertainment Holdings, Inc. Stockholder Litigation,
              Consol. Civil Action No. 2023-0215-MTZ

Dear Mr. Mathew:

       I write to address your two motions to recuse Special Master Amato.1 The
first is denied, and I reserve judgment on the second pending Special Master
Amato’s submission of an affidavit concerning her alleged conflict.
       The first motion begins with the premise that Special Master Amato has a
brother who edits movies and films “in the entertainment industry, specifically in
Hollywood.”2 It argues the nature of Hollywood is such that Special Master
Amato’s brother might face reprisal if her “rulings fall out with the industry.”3 I
interpret this motion to seek disqualification under Rule 2.11(A)(2)(c) of the
Delaware Judges’ Code of Judicial Conduct (the “Code of Judicial Conduct”).4
       The Code of Judicial Conduct has codified the standard for disqualification
based on an apparent or actual conflict or bias.5 And while Special Master Amato
is not a judicial officer, she is performing the duties of one subject to exception and
de novo review, and so I apply the same standards to her. Rule 2.11 governs
disqualification, and provides in relevant part:

1
    Docket Item (“D.I.”) 230; D.I. 241.
2
    D.I. 230 ¶ 3.
3
    Id. ¶ 5.
4
    Del. Judges’ Code of Judicial Conduct (2008) [hereinafter “Code Jud. Con.”].
5
 See Meso Scale Diagnostics, LLC v. Roche Diagnostics GmbH, 247 A.3d 229, 242 (Del.
2021).
In re AMC Entertainment Holdings, Inc. Stockholder Litigation,
Consol. Civil Action No. 2023-0215-MTZ
May 10, 2023
Page 2 of 4

          (A) A judge should disqualify himself or herself in a proceeding in
          which the judge’s impartiality might reasonably be questioned,
          including but not limited to instances where:
          (1) The judge has a personal bias or prejudice concerning a party[;]

          (2) The judge, . . . or a person within the third degree of relationship,
          calculated according to the civil law system,
          ...
          (c) is known by the judge to have an interest that could be
          substantially affected by the outcome of the proceeding[.]6
The Code of Judicial Conduct defines “third degree of relationship calculated
according to the civil law system” to include a judicial officer’s brother.7 Where
disqualification is sought under Rule 2.11(A)(2)(c), the standard is objective, any
subjective belief of impartiality “is irrelevant,” and the Court will undertake only
an objective inquiry.8
      For purposes of this motion, I will assume the motion is correct that Special
Master Amato has a brother who works in the entertainment industry in
Hollywood, California. (The motion does no more than point out that the two
share a surname.) It is difficult to imagine how Special Master Amato’s report and
recommendation on an AMC stockholder’s objection, letter of support, or motion
could “substantially affect[]” any interest her brother may have as an editor.9 I can
envision no set of circumstances in which any of Special Master Amato’s reports
or recommendations could so anger Hollywood’s entertainment industry that it
would blacklist or otherwise retaliate against her brother. Disqualification is not
warranted under Rule 2.11(A)(2)(c).
       The second motion alleges Special Master Amato may not be impartial with
regard to Mark Lebovitch, Esq., of Bernstein Litowitz Berger & Grossmann LLP,
who has entered his appearance on behalf of plaintiffs in this case. The motion
asserts Special Master Amato and Mr. Lebovitch worked together on In re Globe

6
    Code Jud. Con. R. 2.11.
7
    Id. at 8.
8
    See Los v. Los, 595 A.2d 381, 384 (Del. 1991).
9
    Code Jud. Con. R. 2.11.
In re AMC Entertainment Holdings, Inc. Stockholder Litigation,
Consol. Civil Action No. 2023-0215-MTZ
May 10, 2023
Page 3 of 4

Specialty Metals, Inc. Stockholders Litigation, C.A. No. 10865-VCG (Del. Ch.). A
review of that docket indicates that indeed, Special Master Amato’s firm and Mr.
Lebovitch’s firm served as co-lead counsel for the plaintiffs in that case, and both
Special Master Amato and Mr. Lebovitch entered appearances. The case
concluded when Vice Chancellor Glasscock approved a final settlement in
February 2016. The motion states that Special Master Amato’s co-representation
of lead plaintiffs with Mr. Lebovitch in that matter, which concluded nearly seven
years ago, “raises reasonable questions regarding her impartiality.”10 I interpret the
motion as seeking disqualification under Rule 2.11(A)(1).
      Our Supreme Court has set forth the standard where one seeks
disqualification of a judicial officer under Rule 2.11(A)(1):
         [T]he judge must engage in a two-part analysis to determine if recusal
         is warranted. First, the judge must determine whether she is
         subjectively satisfied that she can hear the case free of bias or
         prejudice concerning the party seeking recusal. Second, “even if the
         judge believes that he or she is free of bias or prejudice, the judge
         must objectively examine whether the circumstances require recusal
         because ‘there is an appearance of bias sufficient to cause doubt as to
         the judge’s impartiality.’”11
       Special Master Amato’s past representation in In re Globe Specialty Metals
does not give rise to an objective appearance of bias in favor of Mr. Lebovitch or
his clients. Serving as co-lead counsel in a case nearly seven years ago creates no
logical concern that Special Master Amato would favor Mr. Lebovitch or his
clients in her recommendations in this matter. The fact that the movant “has no
way of knowing if both parties have been communicating outside this court”12 does
not change that result. One could say this of any judicial officer and any other
person, but absent any reason to think such communications exist and that such
communications are of such a nature that would create or reflect a bias, this
unknown does not contribute to the objective appearance of bias.

10
     D.I. 241 ¶ 4.
11
  Meso Scale Diagnostics, 247 A.3d at 242 (quoting Stevenson v. State, 782 A.2d 249,
255 (Del. 2001)).
12
     D.I. 241 ¶ 4.
In re AMC Entertainment Holdings, Inc. Stockholder Litigation,
Consol. Civil Action No. 2023-0215-MTZ
May 10, 2023
Page 4 of 4

       While it is clear this second motion does not point to an objective
appearance of bias, I cannot conduct the subjective analysis required by our case
law interpreting Rule 2.11(A)(1), namely whether Special Master Amato believes
she can “hear the case free of bias or prejudice.”13 I ask that Special Master Amato
submit an affidavit regarding her subjective belief as to whether she may resolve
motions in this case free of bias in light of her service alongside Mr. Lebovitch in
the In re Globe Specialty Metals matter. If, upon reviewing that affidavit, I am
satisfied that Special Master Amato undertook the subjective analysis required by
our law, I will deny the second motion.14
       No further briefing is required on these motions. I appreciate your interest
in this matter and your desire for an impartial Special Master. I believe the
concerns raised in the first motion are unfounded, and so that motion is denied. IT
IS SO ORDERED. I believe the second motion fails to raise any objective
concern as to Special Master Amato’s impartiality. But because I cannot
determine whether disqualification is appropriate under Rule 2.11(A)(1) absent a
subjective analysis of bias or prejudice, I reserve judgment on that motion until
Special Master Amato submits an affidavit to the Court.

                                                        Sincerely,

                                                        /s/ Morgan T. Zurn

                                                        Vice Chancellor

MTZ/ms

cc:      All Counsel of Record, via File & ServeXpress

13
     Meso Scale, 247 A.3d at 242.
14
   See Los, 595 A.2d at 385 (“On appeal of the judge’s recusal decision, the reviewing
court must be satisfied that the trial judge engaged in the subjective test and will review
the merits of the objective test.”).