The Court of Chancery recently ruled on a request for interlocutory appeal as it related to the Court’s rulings on spoliation issues.  In the decision of Chrome Systems, Inc. v. Autodata Solutions, Inc., et al., C.A. No. 11808-VCG (Del. Ch. Sept. 21, 2016), Vice Chancellor Glasscock declined to certify the interlocutory appeal.

Plaintiff brought the case alleging that defendants improperly dissolved a joint venture of the parties.  By previous bench ruling, the Court found that the parties contractually agreed to arbitrate the dispute, excluding injunctive relief.  The Court retained jurisdiction in the event the arbitrator found that certain issues were non-arbitrable.  Otherwise the arbitration moved forward on an expedited path.

The Plaintiff asked this Court to hold a hearing on, and use the contempt power to redress, the Defendants’ alleged spoliation (over which the Court reserved jurisdiction as well). By bench ruling on March 10, 2016, the Court exercised its discretion to hear only that evidence of spoliation or litigation misconduct occurring after the litigation was filed, which has the potential to have worked a fraud on the Court.  The Court found that other evidence of misconduct should be presented to the arbitrator, who will be able to avoid prejudice to the Plaintiff resulting from any spoliation by the Defendants.

Plaintiff proceeded to pursue an interlocutory appeal and request to certify that appeal, in that it wanted to present all pre- and post-litigation evidence of spoilation. The Court found that certification is inappropriate.  In doing so, the Court provided (while citing Supreme Court Rule 42(b)(ii)):

As Supreme Court Rule 42 makes clear, interlocutory appeal is an extraordinary remedy, which “should be exceptional, not routine, because [such appeals] disrupt the normal procession of litigation, cause delay, and can threaten to exhaust scarce party and judicial resources.” Before certifying an appeal, I must determine that an interlocutory appeal would bring “substantial benefits that will outweigh the certain costs that accompany” such an appeal.

If you would like to speak to a litigator in Fox Rothschild’s Delaware office, please reach out to Sid Liebesman (302) 622-4237 or Seth Niederman (302) 622-4238.