Sean J. GRIFFITH, Objector Below, Appellant,
Shiva STEIN, derivatively ON BEHALF OF The GOLDMAN SACHS GROUP, INC., and individually as a Stockholder of The Goldman Sachs Group, Inc., Plaintiff Below, Appellee, and Lloyd C. Blankenfein, M. Michele Burns, Gary D. Cohn, Mark A. Flaherty, William W. George, James A. Johnson, Ellen J. Kullman, Lakshmi N. Mittal, Adebayo O. Ogunlesi, Peter Oppenheimer, Debora L. Spar, Mark E. Tucker, David A. Viniar, Mark O. Winkelman, and The Goldman Sachs Group, Inc., Defendants Below, Appellees.
August 19, 2019
decision has been designated as "Table of Decisions
Without Published Opinions." in the Atlantic Reporter.
Below— Court of Chancery of the State of Delaware, C.A.
VALIHURA, VAUGHN, and SEITZ, Justices.
T. Vaughn, Jr., Justice
consideration of the notice of interlocutory appeal and the
documents attached thereto as well as the notice to show
cause and responses, it appears to the Court that:
The objector below-appellant, Sean J. Griffith ("the
Objector"), has filed two appeals from a Court of a
Court of Chancery letter order, dated July 1, 2019, awarding
the Objector attorneys fees and costs under the corporate
benefit doctrine ("Fee Order"). In appeal No. 331,
2019, he petitions this Court under Supreme Court Rule 42 to
accept an interlocutory appeal. In appeal No. 332, 2019, he
asks this Court to accept the appeal under the collateral
order doctrine. For the reasons set forth below, we refuse
the interlocutory appeal and dismiss the other appeal as
The Fee Order arises from a direct and derivative action
brought by a stockholder against certain directors of The
Goldman Sachs Group, Inc. ("Goldman Directors").
After the parties reached a settlement and sought the Courts
approval of the proposed settlement, the Objector filed
objections. The Court of Chancery did not approve the
settlement, and the parties proceeded to oral
argument on the Goldman Directors pending motion to dismiss.
The Court of Chancery granted in part and denied in part the
motion to dismiss.
The Objector filed a motion for $575,000 in attorneys fees
and costs under the corporate benefit doctrine. The Goldman
Directors opposed the motion, arguing that a fee award of
approximately $10,000 was appropriate. The Court of Chancery
concluded that the objection was helpful and benefitted
Goldman, but noted that its conclusions in rejecting the
settlement were not "entirely congruent" with the
Objectors arguments. The Court of Chancery determined that
a fee award of $100,000 was equitable, plus $1,923.30 in
July 11, 2019, the Objector filed an application for
certification of an interlocutory appeal. The Objector argued
that the Fee Order determined a substantial issue of material
importance because it resolved an issue that went to the
merits of the case and the amount of the fee awarded could
discourage other objectors from challenging poor settlements.
The Objector also suggested that if the fee award was
considered a collateral issue, then it could be immediately
appealable under the collateral order doctrine. As to the
Rule 42(b)(iii) criteria, the Objector contended that the Fee
Order addressed a question of first impression— the
appropriate fee for a successful, activist objector. The
Objector also argued that there were conflicting trial court
decisions on fee awards to objectors and that interlocutory
review would serve considerations of justice.
Goldman Directors opposed the application for certification.
They argued that the Fee Order did not determine a
substantial issue of material importance because it was a
collateral matter that did not decide the merits of the case.
As to the Rule 42(b)(iii) criteria, the Goldman Directors
argued that the order did not decide a legal issue of first
impression, but applied settled law for the determination of
fee awards. The Goldman Directors also contended that there
was no conflict on a question of law and that interlocutory
review would not serve considerations of justice.
July 23, 2019, the Court of Chancery denied the application
for certification. Applying the Rule 42(b)(iii) criteria,
the Court of Chancery concluded that the Fee Order did not
involve a question of law resolved for the first time in
Delaware, but simply applied established principles of the
corporate benefit doctrine. The Court of Chancery
found that the fact that the application of the corporate
benefit doctrine led to different fee awards in different
cases did not mean there were conflicting trial court
decisions on a question of law. As to the possibility
that the Fee Order could discourage beneficial objections to
settlements, the Court of Chancery decided that interlocutory
review would serve considerations of justice, but that this
factor was of "slight weight." The Court of
Chancery concluded that the likely benefits of interlocutory
review did not outweigh the probable costs, such that
interlocutory review was in the interest of
The Court of Chancery declined to address whether the Fee
Order was appealable under the collateral order doctrine,