Genelux Corporation v. Roeder ( 2016 )

IN THE SUPREME COURT OF THE STATE OF DELAWARE
GENELUX CORPORATION and §
RONALD SIMUS, § No. 631, 2015
§
Plaintiffs Below- §
Cross-Appellees, § Court Below: Court of Chancery
§ of the State of Delaware
v. §
§ C.A. No. 10042-VCM
ALBERT ROEDER and BYRON §
GEORGIOU, §
§
Defendants Below- §
Cross-Appellants, §
§
and §
§
DR. ALADAR SZALAY, §
§
Intervenor Below- §
Cross-Appellant. §
Submitted: June 30, 2016
Decided: July 6, 2016
Before STRINE, Chief Justice; HOLLAND, VALIHURA, VAUGHN, and
SEITZ, Justices, constituting the Court en Banc.
ORDER
This 6th day of July 2016, having considered the defendants‟ motion for
partial vacatur of judgment and the plaintiffs‟ opposition to that motion, we find it
evident that: On June 9, 2016, we dismissed the defendants‟ cross-appeal as moot
because no financial consequences remained in controversy after the plaintiffs
advanced the attorneys‟ fees and expenses sought by the defendants.1 The
defendants now ask this Court to vacate paragraph 3 of the Court of Chancery‟s
October 22, 2015 Final Order and Judgment, which denied their request for
additional sanctions and attorneys‟ fees and expenses.2 We acknowledge that
vacatur is available only in a limited set of circumstances, but this appeal presents
unusual circumstances in which the defendants‟ opportunity to seek our review of
the trial court‟s determination that the plaintiffs‟ conduct did not justify
fee-shifting was thwarted nine days before oral argument when the plaintiffs
advanced the remaining amount of the defendants‟ attorneys‟ fees and expenses.3
Because the plaintiffs‟ decision to advance the funds when they did was beyond
the defendants‟ control, it would be contrary to the interests of justice to allow the
Court of Chancery‟s prior denial of the defendants‟ request for additional
1
See Genelux Corp. v. Roeder, 2016 WL 3381420, at *1 (Del. June 9, 2016).
2
See In re Genelux Corp., 2015 WL 6408149, at *1 (Del. Ch. Oct. 22, 2015) (“In all other
respects, Defendants‟ requests for relief, including their requests for attorneys‟ fees and expenses
and additional sanctions, are denied.”).
3
See, e.g., Tyson Foods, Inc. v. Aetos Corp., 818 A.2d 145, 147–48 (Del. 2003) (“In Delaware,
the equitable remedy of vacatur is available in only a narrow set of circumstances. As a general
rule, when a case becomes moot at some point during the appellate process, this Court will
vacate the judgment below where the interests of justice so require. This so-called „interests of
justice‟ standard is no doubt met where the party seeking appellate review is thwarted by some
event beyond its control. In such circumstances, vacatur is necessary to prevent the unappealable
judgment from obtaining „precedential or preclusive res judicata effect[.]‟” (emphasis in
original) (internal citations omitted)); Stearn v. Koch, 628 A.2d 44, 46 (Del. 1993) (“The
rationale for the rule of vacatur is „that those who have been prevented from obtaining the
[appellate] review to which they are entitled should not be treated as if there had been [an
adverse determination upon] review.‟ The rule of vacatur exists for the protection of a party
whose desire for appellate review has been thwarted.” (quoting United States v. Munsingwear,
Inc., 340 U.S. 36, 39 (1950))).
2
sanctions, and attorneys‟ fees and expenses, to have precedential or preclusive
effect.4 Further, the plaintiffs‟ argument that the defendants‟ motion is “unfairly
selective” because it does not cover the Court of Chancery‟s decision to award
$10,000 in sanctions to the defendants is unpersuasive because the plaintiffs chose
not to appeal that award. Thus, in the interests of justice, the defendants‟ request
for partial vacatur is granted. This matter is remanded to the Court of Chancery
with directions to vacate paragraph 3 of its October 22, 2015 Final Order and
Judgment.
IT IS SO ORDERED.
BY THE COURT:
/s/ Leo E. Strine, Jr.
Chief Justice
4
See, e.g., Glazer v. Pasternak, 693 A.2d 319, 321 (Del. 1997) (granting a corporation‟s motion
to vacate the Court of Chancery‟s decision to enjoin a proposed merger on the ground that the
corporation was “prevented from obtaining appellate review” because its special committee
terminated the merger agreement, causing the appeal to be dismissed as moot); Koch, 628 A.2d
at 47 (“It would be contrary to the interests of justice to allow the judgment of the Court of
Chancery to have any precedential or preclusive res judicata effect [where the plaintiffs‟]
cross-appeal has been dismissed as moot, because of an event beyond their control.”).
3