United States District Court, D. Delaware
PHILIP R. SHAWE and SHIRLEY SHAWE, Plaintiffs,
ROBERT B. PINCUS, ESQ., in his official capacity as court-appointed custodian, and JEFFREY W. BULLOCK, in his official capacity as Secretary of State for the State of Delaware, Defendants.
L. Finger, Esquire of Finger & Slanina, LLC, Wilmington,
Delaware. Counsel for Plaintiff Philip R. Shawe. Of Counsel:
David B. Goldstein, Esquire of Rabinowitz, Boudin, Standard,
Krinsky & Lieberman, P.C., New York, New York.
D. Eicher, Esquire of Cooch & Taylor, PA, Wilmington,
Delaware. Counsel for Plaintiff Shirley Shawe.
Douglas D. Herrman, Esquire of Pepper Hamilton LLP,
Wilmington, Delaware. Counsel for Defendant Robert B. Pincus.
Of Counsel: John K. Villa, Esquire, Charles Davant IV,
Esquire, and Anne M. Rucker, Esquire of Williams &
Connolly LLP, Washington DC.
C. Handlon, Esquire, Lauren E. Maguire, Esquire, and Ryan P.
Connell, Esquire of State of Delaware Department of Justice,
Wilmington, Delaware. Counsel for Defendant Jeffrey W.
case concerns state-court litigation in which the Delaware
Court of Chancery (the "Chancery Court") ordered
the sale of TransPerfect Global, Inc.
("TransPerfect") over the objections of Plaintiffs
Philip R. Shawe ("Shawe") and Shirley Shawe
("Ms. Shawe, " and collectively the
"Shawes" or "Plaintiffs"). Plaintiffs are
two of the three stockholders of TransPerfect. The third
stockholder, Elizabeth Elting ("Elting"), supports
the sale. Defendants are the court-appointed custodian
responsible for overseeing the sale of TransPerfect (the
"Custodian") and the Delaware Secretary of State
(the "Secretary, " and collectively, the
"Defendants"). The Secretary was not involved in
the state-court litigation, but may be statutorily required
to take certain administrative actions in the future if the
sale is in the form of a merger or consolidation.
Plaintiffs' claims, brought pursuant to 42 U.S.C. §
1983, seek: (1) a declaratory judgment that the court-ordered
sale violates the Takings and Due Process Clauses of the
Fifth and Fourteenth Amendments to the United States
Constitution, and (2) an injunction prohibiting Defendants
from carrying out their duties to effectuate with the sale.
court has subject matter jurisdiction over this action
pursuant to 28 U.S.C. § 1331. Currently before the court
are Defendants' motions to dismiss. (D.I. 11; D.I. 14;
D.I. 31; D.I. 32). Defendants have raised a multitude of
arguments as to why the complaint should be dismissed,
including the Rooker-Feldman doctrine, res
judicata, Younger abstention, Burford
abstention, and the failure to state a claim under Rule
12(b)(6). (D.I. 13; D.I. 15). For the reasons discussed
below, the court finds that the complaint should be dismissed
pursuant to the Rooker-Feldman doctrine.
Accordingly, it does not reach Defendants' other
is a Delaware corporation that provides worldwide translation
and litigation support services. (D.I. 30 ¶¶ 16,
20). Shawe and Elting are the co-founders, co-Chief Executive
Officers, and before the appointment of the Custodian, the
sole members of the board of directors. (Id. at
¶ 18). In 2014, the Chancery Court consolidated for
trial several actions Elting and Shawe had filed against each
other in that court. In re Shawe & Elting LLC,
2015 WL 4874733, at *24 (Del. Ch. Aug. 13, 2015). Relevant to
this action, Elting filed two petitions seeking the
appointment of a custodian for TransPerfect pursuant to 8
Del. C. § 226(a): one captioned In re
TransPerfect Global, Inc., C.A. No. 9700-CB and the
other captioned Elting v. Shawe, C.A. No.
10449-CB. Id. at *18 & *23. After a
six-day trial on the merits, the Chancery Court issued an
opinion and order (the "Merits Opinion" and
"Custodian Order") on August 13, 2015 that, among
other things, entered judgment in favor of Elting and against
the Shawes on the petitions to appoint a custodian. (BL-1282;
BL-1283). The Custodian Order instructed the
Custodian to prepare a proposed plan of sale for
TransPerfect. (D.I. 30 ¶ 50). On August 24, 2015, the
Shawes filed a motion seeking entry of a final judgment or
certification of an interlocutory appeal for the Merits
Opinion and Custodian Order. (Id. at ¶ 53). The
Chancery Court denied the motion, because it created the
prospect of piecemeal appeals, including later potential
challenges to the form of a sale order that remained to be
determined. (BL-1352 at ¶ 7; BL-1357).
February 8, 2016, the Custodian submitted to the Chancery
Court a proposed plan of sale (the "Sale Report").
In re TransPerfect Global, Inc., 2016 WL 3477217, at
*1 (Del. Ch. June 20, 2016). Elting did not object to the
Sale Report, but the Shawes did. Id. at *2.
Accordingly, the parties fully briefed the issues and the
Chancery Court held a hearing on April 27, 2016 to consider
the objections. Id. On June 20, 2016, the Chancery
Court issued a letter opinion, as revised on June 21, 2016
(the "Letter Opinion"), adopting in part and
rejecting in part the Shawes' objections, adopting the
Custodian's proposed plan of sale with certain
modifications, and directing the Custodian to confer with the
parties to submit a proposed form of Sale Order consistent
with the Letter Opinion. Id. at *3-5. On July 1,
2016, the Custodian submitted a proposed form of Sale Order,
to which the Shawes filed objections. (BL-1758; BL-1763;
BL-1764; BL-1766). On July 18, 2016, the Chancery Court
overruled the Shawes' objections on the grounds that they
relitigated issues already decided and entered the Sale Order
as proposed. (BL-1765; BL-1766).
28, 2016, the Shawes filed a motion seeking certification of
an interlocutory appeal of the Merits Opinion, the Custodian
Order, the Letter Opinion, and the Sale Order, which the
Chancery Court granted. (BL-1773; BL-1774; BL-1863). On
appeal, Ms. Shawe argued for the first time that the forced
sale of her share violated the Takings and Due Process
Clauses of the United States Constitution. Shawe v.
Elting, 157 A.3d 152, 168 (Del. 2017). Under Delaware
Supreme Court Rule 8, the court "only considers
questions fairly presented to the trial court."
Id. The rule provides a narrow exception if the
Delaware Supreme Court finds that "the trial court
committed plain error requiring review in the interests of
justice." Id. On February 13, 2017, the
majority opinion of the Delaware Supreme Court found no plain
error. Id. at * 169. Accordingly, Ms.
Shawe's constitutional arguments were deemed waived for
failure to raise them first in the Chancery Court.
Id. Shortly thereafter, the Shawes filed a motion in
the Chancery Court to amend the Sale Order, which was denied.
(BL-1998; BL-2000). A week later, on March 15, 2017, the
Shawes filed their complaint in this court claiming that the
forced sale of their TransPerfect stock violated the Takings
and Due Process Clauses of the United States Constitution.
STANDARD OF REVIEW
motion to dismiss pursuant to the Rooker-Feldman
doctrine is a challenge to the court's subject matter
jurisdiction. Singleton v. Collins, 513
Fed.App'x 251, 252, (3d Cir. 2013). Where the court lacks
subject matter jurisdiction, it may dismiss the complaint
pursuant to Fed.R.Civ.P. 12(b)(1). Gary v. Braddock
Cemetery,517 F.3d 195, 203 (3d. Cir. 2008). Challenges
to subject matter jurisdiction may be facial or factual.
Id. A facial attack contests the sufficiency of the
pleadings, whereas a factual attack contests the sufficiency
of jurisdictional facts. Id. An attack to subject
matter jurisdiction based on the Rooker-Feldman
doctrine is a factual attack. Nev. First Fed, LLC v.
Macciocca, 2015 WL 4461828, at *2 (E.D. Pa. July 21,
2015); McCurdy v. Esmonde, 2003 WL 223412, at *4
(E.D. Pa. Jan. 30, 2003). Thus, the court may weigh and
consider evidence outside the pleadings. Gould ...