Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

State v. Univar, Inc.

Court of Chancery of Delaware

May 6, 2019

STATE OF DELAWARE, DEPARTMENT OF FINANCE, Plaintiff,
v.
UNIVAR, INC., Defendant.

          ORDER DENYING APPLICATION FOR CERTIFICATION OF INTERLOCUTORY APPEAL

          JOSEPH R. SLIGHTS III, VICE CHANCELLOR

         WHEREAS, on October 30, 2018, Plaintiff, the State of Delaware Department of Finance (the "State"), issued an administrative subpoena to Defendant, Univar, Inc., directing Univar to produce certain records in connection with the State's Notice of Examination to conduct an unclaimed property audit[1];

         WHEREAS, on December 3, 2018, Univar filed suit in the United States District Court for the District of Delaware (the "District Court") against certain representatives of the State to challenge the constitutionality of several Delaware escheat laws, or the State's application of such laws, including the State's retroactive application of Section 1171[2];

         WHEREAS, on December 7, 2018, the State filed this action to enforce the subpoena against Univar under 12 Del. C. § 1171(4), which authorizes the State Escheator to "bring an action in the Court of Chancery seeking enforcement of an administrative subpoena issued under paragraph 3 . . . which the Court shall consider under procedures that will lead to an expeditious resolution of the action";

         WHEREAS, the Court issued a bench ruling on April 8, 2019, [3] and an implementing order on April 18, 2019, [4] (together, the "Order"), granting Univar's motion to stay the Chancery litigation in favor of the District Court litigation upon concluding, for the sake of efficiency and comity, that the threshold constitutional issues raised by Univar should be adjudicated in the District Court;

         WHEREAS, on April 18, 2019, the State filed an Application for Certification of an Interlocutory Appeal of the Order (the "Application")[5];

         WHEREAS, the Application asserts three grounds for interlocutory appeal under Supreme Court Rule 42: (1) the Order "involves a question of law resolved for the first time in this State, "-citing Supreme Court Rule 42(B)(iii)(A); (2) the Order "determines the constitutionality . . . or application of a statute of this State"- citing Supreme Court Rule 42(B)(iii)(C); and (3) "[r]eview of the interlocutory order may serve considerations of justice"-citing Supreme Court Rule 42(B)(iii)(H)[6];

         WHEREAS, on April 29, 2019, Univar opposed the Application[7]; and

         WHEREAS, the Court has carefully considered the Application, Univar's response and the criteria set forth in Supreme Court Rule 42, IT IS HEREBY ORDERED, this 6th day of May, 2019, that:

         1. Supreme Court Rule 42(b)(i) provides that "[n]o interlocutory appeal will be certified by the trial court or accepted by the Court unless the order of the trial court decides a substantial issue of material importance that merits appellate review before a final judgment." According to Rule 42(b)(ii), instances where the trial court certifies an interlocutory appeal "should be exceptional, not routine, because [interlocutory appeals] disrupt the normal procession of litigation, cause delay, and can threaten to exhaust scarce party and judicial resources." For these reasons, "parties should only ask for the right to seek interlocutory review if they believe in good faith that there are substantial benefits that will outweigh the certain costs that accompany an interlocutory appeal."[8]

         2. When certifying an interlocutory appeal, "the trial court should identify whether and why the likely benefits of interlocutory review outweigh the probable costs, such that interlocutory review is in the interests of justice. If the balance is uncertain, the trial court should refuse to certify the interlocutory appeal."[9]

         3. After carefully reviewing the Order, I am satisfied that it does not decide a substantial issue of material importance that merits appellate review before a final judgment. Specifically, the Order did not decide a novel issue of law or address the constitutionality of a Delaware statute.[10] Likewise, the interests of justice would not be served by interlocutory review because the Court did not address the claims or defenses raised by the parties on the merits, but rather simply determined that the District Court should address the threshold federal constitutional issues before this Court determines whether to enforce the State's subpoena. With no substantial issue decided and no interest of justice implicated, I cannot say that the remote benefits of an interlocutory appeal outweigh the certain costs. For reasons I explain below, the Application's arguments to the contrary are rejected.

         4. Our "Supreme Court generally does not accept interlocutory appeals relating to motions to stay because motions to stay usually do not address the substantive merits of the parties' underlying claims, which is the central focus of the Rule 42 analysis."[11] There is no reason to depart from this general rule here because, as noted, the Court has yet to address the substantive merits of the parties' claims or defenses. Indeed, the Court emphasized in the Order that the decision to stay the litigation was not intended to signal any view on the merits of the State's claims in this Court or its defenses in the District Court action.[12] The Court then allowed that if the District Court decides that this Court should address the more focused constitutional issues related to the State's subpoena, the Court would invite and, indeed, welcome a motion to lift the stay.[13]

         5. Contrary to the State's characterization, the Order did not decide a novel issue of law raised for the first time in Delaware or determine the constitutionality or novel application of a Delaware statute.[14] While this may be the first time the State has sought to enforce a subpoena under Section 1171(4), and the stay will delay "resolution" of that effort, the State cannot ignore that its authority to issue and enforce the subpoena in furtherance of its unclaimed property audit is now the subject of pending (first-filed) litigation in federal court. By the State's lights, two courts should be deciding the threshold constitutional issues raised in the District Court action at the same time.[15] I disagreed and stayed this action. This was hardly a novel or provocative application of Delaware law.[16] As both this court and our Supreme Court have held time and again, "[t]he discretion to issue a stay is inherent in every court and flows from its control over the disposition of cases on its docket."[17] The power to stay litigation is "subject only to statutory and rule ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.