Gibbons Law Alert

Gibbons Law Alert

Tagged: Delaware Law

Retroactive Effect Given to Delaware Statute Authorizing Up to 20-Year Statute of Limitations for Certain Breach of Contract Actions

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Posted in General Litigation

On March 16, 2015

The Delaware Court of Chancery, in Bear Stearns Mortgage Funding Trust 2006-SL1 v. EMC Mortgage LLC, C.A. No. 7701-VCL (Del. Ch. Jan. 12, 2015) (Laster, V.C.), held that the recently enacted 10 Del. C. § 8106(c), which authorizes parties to a written contract involving at least $100,000 to agree to a statute of limitations of up to 20 years, should be applied retroactively to the plaintiff’s breach of representation and warranty claims filed almost six years after the closing of the underlying transaction.

Delaware Enacts Legislation Authorizing 20-Year Statute of Limitations for Certain Breach of Contract Actions

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Posted in General Litigation

On September 22, 2014

Delaware has recently enacted legislation authorizing parties to a written contract involving at least $100,000 to agree to a statute of limitations of up to 20 years for actions based on that contract. The amendment to 10 Del. C. § 8106, embodied in new subsection (c), gives parties to a written contract the freedom to agree to a limitations period longer than the typical three or four years from accrual of the cause of action, without the need to resort to Delaware’s technical requirements for a contract under seal. The synopsis to the legislation explains that examples of the limitations period to be stated in the contract include, without limitation, (i) a specific period of time, (ii) a period of time defined by reference to the occurrence of another event, another document or agreement or another statutory period, and (iii) an indefinite period of time.

Delaware Adopts Less-Stringent Approach to Authentication of Social Media Evidence: The Jury, and Not the Trial Judge, Ultimately Decides

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Posted in General Litigation

On April 2, 2014

In a recent decision, the Delaware Supreme Court held a proponent of social media evidence may authenticate that evidence using the same forms of verification available under Delaware Rule of Evidence 901 to authenticate any other type of evidence, including witness testimony, corroborative circumstances, distinctive characteristics, or descriptions and explanations of the technical process or system that generated the evidence in question. In Parker v. State of Delaware, Delaware’s high court held that the trial judge may admit a social media post when there is evidence sufficient to support a finding by a reasonable juror that the proffered evidence is what its proponent claims it to be, leaving the jury to decide whether to accept or reject the evidence.

Delaware Corporations May Enact Bylaws Requiring Litigation to be Venued in Delaware Courts

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Posted in General Litigation

On July 8, 2013

On June 25, 2013, the Delaware Court of Chancery paved the way for the boards of directors of Delaware corporations to amend their bylaws to include forum selection clauses requiring any litigation related to the corporation’s internal affairs to be conducted in Delaware courts. Adopting such provisions is intended to avoid the inefficiency and cost of Delaware corporations having to defend against the same litigation in multiple forums (e.g., both in Delaware and the state of the corporation’s principal place of business, as well as in state and federal court).

Delaware Supreme Court Holds Valid International Forum Selection Clause Dispositive in Determining Jurisdiction

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Posted in General Litigation

On June 11, 2013

In National Industries Group (Holding) v. Carlyle Investment Management LLC, Delaware’s Supreme Court unanimously held that a valid forum selection clause is dispositive in determining which court has jurisdiction over disputes arising under the contract. Even if a foreign corporation is party to the contract, Carlyle holds that any considerations weighing in favor of applying the doctrine of international comity do not override an otherwise valid forum selection clause.

Delaware Court of Chancery Announces Rule Amendments and New “Must Read” E-Discovery Guidelines

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Posted in General Litigation

On February 4, 2013

Effective January 1, 2013, the Delaware Court of Chancery Rules 26 (General provisions concerning discovery), 30 (Depositions upon oral examination), 34 (Production of documents) and 45 (Subpoenas) were amended, consistent with similar amendments to the Federal Rules of Civil Procedure, to refer to discovery of “electronically stored information” (“ESI”) in addition to “documents” and “tangible things” and explain how parties are to respond to requests for ESI.

The Southern District of New York and the District of Delaware Restore Order to a Chaotic Post-Stern Landscape

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Posted in General Litigation

On March 7, 2012

Recently, the Southern District of New York and the District of Delaware have issued Amended Standing Orders resolving some of the uncertainty arising from the Supreme Court’s ruling in Stern v. Marshall last term by expressly permitting bankruptcy courts to hear and issue proposed findings of fact and conclusions of law in those matters where they lack the constitutional authority to issue final judgments.

Agree or Else: Delaware Adopts Revised Default Standards for Discovery

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Posted in General Litigation

On February 9, 2012

Effective December 8, 2011, the U.S. District Court for the District of Delaware revised its Default Standard for Discovery, Including Discovery of Electronically Stored Information (“ESI”). This third version of the Revised Default Standards contains some new provisions that apply to the discovery of ESI absent agreement by the parties or court order. The Revised Default Standards also set a detailed schedule for the initial exchange of discovery in patent litigation, and reinforce the Court’s expectation of cooperation among the parties and proportionality in the preservation, identification and production of relevant information. Some of the highlights and practical points of the Revised Default Standards are as follows:

Creditors of Insolvent Delaware Limited Liability Companies Lack Standing to Pursue Derivative Claims

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Posted in General Litigation

On October 28, 2011

Relying on the plain language of Delaware’s Limited Liability Company Act, the Delaware Supreme Court, in CML V, LLC v. John Bax, et al., recently ruled that creditors of insolvent Delaware limited liability companies lack standing to sue derivatively for their managers’ alleged breach of their fiduciary duties. According to Chief Justice Myron T. Steele, writing for the Court, 6 Del. C. § 18-1002 of Delaware’s Limited Liability Company Act is “unambiguous and limits derivative standing in LLCs exclusively to ‘member[s]’ or ‘assignee[s].’” In so holding, the Court distinguished insolvent LLCs from insolvent corporations, which are subject to derivative claims by creditors, noting that “the General Assembly is free to elect a statutory limitation on derivative standing for LLCs that is different than that for corporations, and thereby preclude creditors from attaining standing.”

Delaware Supreme Court Endorses Reasonable “Conceivability” on Motion to Dismiss Over Twombly-Iqbal’s “Plausibility” Standard

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Posted in General Litigation

On September 23, 2011

Since the U.S. Supreme Court’s decisions in Bell Atlantic Corp. v. Twombly in 2007 and Ashcroft v. Iqbal in 2009, many Delaware Court of Chancery decisions have applied the Twombly-Iqbal “plausibility” standard in ruling on motions to dismiss. In its recent decision in Central Mortgage Company v. Morgan Stanley Mortgage Capital Holdings LLC, however, the Delaware Supreme Court refused to apply the Twombly-Iqbal “plausibility” standard and, instead, held that — at least for now — Delaware’s less stringent reasonable “conceivability” standard is what governs motions to dismiss in Delaware courts.

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