Court Opinion

ID: 2704882
Source: CourtListenerOpinion
Date Created: 2014-08-04 22:01:11.964831+00
Date Added: 2024-06-11T12:55:00.923816
License: Public Domain

COURT OF CHANCERY
                                        OF THE
    SAM GLASSCOCK III             STATE OF DELAWARE                       COURT OF CHANCERY COURTHOUSE
     VICE CHANCELLOR                                                               34 THE CIRCLE
                                                                            GEORGETOWN, DELAWARE 19947

                                 Date Submitted: July 18, 2014
                                  Date Decided: July 22, 2014

Seth D. Rigrodsky                                      Stephen C. Norman
Brian D. Long                                          Peter J. Walsh, Jr.
Gina M. Serra                                          Tyler J. Leavengood
Jeremy J. Riley                                        Potter Anderson & Corroon LLP
Rigrodsky & Long P.A.                                  1313 North Market Street
2 Righter Parkway, Suite 120                           Hercules Plaza, 6th Floor
Wilmington, Delaware 19803                             Wilmington, Delaware 19801

                 Re:     Cook v. Whitman,
                         Civil Action No. 9458-VCG

Dear Counsel:

          This matter involves claims brought derivatively, purportedly on behalf of

Hewlett-Packard Co. (“Hewlett-Packard”). Before me is the Plaintiff’s July 16,

2014 letter request to schedule oral argument on the Defendants’ pending Motion

to Dismiss or Stay (the “Motion to Stay”) “promptly in advance” of an August 21,

2014 hearing for preliminary approval of a proposed settlement of a related

derivative action before a California district court.1 In his letter, the Plaintiff

“respectfully request[s] that a hearing on the Stay Motion be scheduled in advance

of August 21, 2014 because, inter alia, the settlement of the California Action

would purport to release valuable claims asserted against [Hewlett-Packard’s]

1
    The California action consolidates a number of independently-filed derivative suits.
current and former officers and directors, all of whom are also named as

defendants in this Action . . . .”2 According to the Plaintiff, although he will be

afforded an opportunity at the August 21 hearing to oppose the proposed

settlement at issue, if the district court decides to preliminarily approve the

settlement, that court will likely issue an order enjoining him from pursuing this

litigation. Further, the Plaintiff contends that a favorable decision in this Court

would provide him useful leverage in opposing the settlement before the California

court. The Motion that the Plaintiff seeks to expedite is not yet fully briefed. The

Plaintiff is in the peculiar position of seeking expedition of a Motion he opposes;

the Defendants oppose expedition, and have requested suspension of the briefing

schedule on the Motion to Stay in light of the pending settlement of the California

action. The Plaintiff’s request for expedition was presented at telephonic oral

argument on July 17, 2014. I declined to decide the parties’ requests from the

bench in order to review the Plaintiff’s Answering Brief in Opposition to the

Motion to Stay, from which I was unaccountably blocked from electronic access.

This Letter Opinion is the result.

          This action and the California action involve allegations of breach of

fiduciary duty in connection with the acquisition of Autonomy Corporation plc by

Hewlett-Packard in 2011. In both Delaware and California, the plaintiffs seek to

2
    Pl.’s July 16, 2014 Letter to Court at 2.
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act derivatively on behalf of Hewlett-Packard. The Defendants have moved here

to stay or dismiss this action in favor of the earlier-filed California action. It is the

resolution of that Motion that the Plaintiff seeks to expedite. This Court stands

ready to expedite matters in the interest of equity and justice, and will do so where

a colorable claim is presented and the burdens of expedition are outweighed by the

harm to the parties that may result from delay.3 Because the Plaintiff has not

presented a persuasive basis for expediting a decision on the Defendants’ Motion

to Stay, I decline to do so.

       The Plaintiff represents that his Complaint in this action is superior to those

filed in California, and that the Motion to Stay should be denied. Even if true, a

decision from this Court on the Defendants’ Motion will not bind the California

court in its evaluation of the reasonableness of the proposed settlement. Rather,

the Plaintiff conceded at oral argument that his basis for requesting expedition is

that “if this Court enters an order . . . deny[ing] the Motion to Stay, we believe that

the federal court in California, which is unaware of the allegations that have been

raised in this case, the unique allegations and claims that have been raised . . . that

may well bear on the federal Court’s decision in California as to whether to

preliminarily approve this settlement.”4          Essentially, the Plaintiff requests an

3
  See Cnty. of York Emps. Ret. Plan v. Merrill Lynch & Co., Inc., 2008 WL 4824053, at *6 (Del.
Ch. Oct. 28, 2008).
4
  July 17, 2014 Oral Arg. Tr. 13:4-11.
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expedited decision in the belief that, if my decision on the Motion to Stay is

favorable to him, he may find that decision useful to leverage a favorable decision

at the California preliminary settlement hearing. My decision on the Motion to

Stay, of course, will have no preclusive effect on the California court, nor will it

directly bear on the fairness of the proposed settlement there.          The Plaintiff

concedes that he will have a full opportunity at the preliminary settlement hearing

and thereafter to argue to the California court that the proposed settlement is unfair

because it would terminate claims in this action not litigated in California. The

Plaintiff believes that a favorable ruling here, based on a finding of insufficient

identity of claims to support a stay of the Delaware action, might have some

persuasive value in his argument in California. It might. A finding that this matter

should be stayed would presumably cut the other way.             It is not, however,

generally the purpose of this Court to act as a stalking horse for issues that a sister

court will have before it, and which that court is perfectly qualified to resolve.

More to the point, expedited litigation here, or indeed any continued briefing of the

Motion to Stay, would risk waste of limited judicial and litigants’ resources in light

of the pending settlement of the matter in California, which has a reasonable

likelihood of staying, if not terminating, litigation here.

      Because the harm the Plaintiff will suffer in the absence of an expedited

decision, if any, does not outweigh the costs of expedition, I deny the Plaintiff’s

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request. In addition, I grant the Defendants’ request to stay submission of their

Reply Brief in Support of the Motion to Stay pending the resolution of the issues

presented at the August 21 hearing in the California action.

      To the extent the foregoing requires an Order to take effect, IT IS SO

ORDERED.

                                             Sincerely,

                                             /s/ Sam Glasscock III

                                             Sam Glasscock III

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