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Transperfect Global, Inc. v. Pincus

Supreme Court of Delaware

December 31, 2019

TRANSPERFECT GLOBAL, INC. and PHILIP R. SHAWE, Respondents Below, Appellants,
v.
ROBERT PINCUS, Movant Below, Appellee. TRANSPERFECT GLOBAL, INC. and PHILIP R. SHAWE, Respondents Below, Appellants,
v.
ROBERT PINCUS, Movant Below, Appellee. TRANSPERFECT GLOBAL, INC. and PHILIP R. SHAWE, Respondents Below, Appellants,
v.
ROBERT PINCUS, Movant Below, Appellee TRANSPERFECT GLOBAL, INC. and PHILIP R. SHAWE, Respondents Below, Appellants,
v.
ROBERT PINCUS, Movant Below, Appellee.

          Submitted: December 19, 2019

          Court Below-Court of Chancery of the State of Delaware C.A. Nos. 9700 and 10449

          Before SEITZ, Chief Justice; VAUGHN, and TRAYNOR, Justices.

          ORDER

          COLLINS J. SEITZ, JR. CHIEF JUSTICE

         After consideration of the notices to show cause, the responses, and the interlocutory appeal, it appears to the Court that:

         (1) The appellants, TransPerfect Global, Inc. and Philip R. Shawe, filed these appeals from three related Court of Chancery orders.[1] A brief description of each appeal follows.

         (2) On October 19, 2019, TransPerfect filed Appeal No. 439, 2019 from a Court of Chancery opinion ("the Opinion") [2] and order ("the First Order"), both dated October 17, 2019, granting in part the motion for civil contempt and sanctions filed by the appellee, Robert Pincus in his capacity as court-appointed custodian ("the Custodian"). In the Opinion, the Court of Chancery held that TransPerfect and Shawe had violated the court's February 5, 2018 order ("the Final Order") by filing litigation against the Custodian in Nevada. In the First Order, the Court of Chancery imposed monetary sanctions upon TransPerfect and Shawe until the Nevada lawsuit was dismissed and awarded the Custodian all fees and expenses, including reasonable attorneys' fees, he incurred in connection with the Nevada litigation and his motion for civil contempt and sanctions.[3] The Court of Chancery reserved judgment on the Custodian's motion for civil contempt and sanctions as to fee orders entered on June 28, 2019 and July 17, 2019 (together, "the Fee Orders").

         (3) On October 21, 2019, Shawe filed Appeal No. 441, 2019 from the Opinion and First Order. After filing Appeal Nos. 439, 2019 and 441, 2019 in this Court, TransPerfect and Shawe filed an application for certification of an interlocutory appeal of the Opinion and First Order in the Court of Chancery. The Custodian opposed the application. On November 18, 2019, the Court of Chancery denied the application.[4] Applying Supreme Court Rule 42, the Court of Chancery held that the Opinion and First Order did not decide a substantial issue of material importance and that certifying an interlocutory appeal would create a substantial risk of piecemeal litigation as reflected by related issues that still had to be resolved, including the amount of the contempt fee award and any objections to the Fee Orders. The Court of Chancery declined to address the argument that the First Order was appealable under the collateral order doctrine.

         (4) On November 25, 2019, TransPerfect and Shawe filed Appeal No. 501, 2019 from the Court of Chancery's orders, dated November 1, 2019 (together "the Second Order"), denying the Custodian's motion for civil contempt and sanctions as to the Fee Orders, establishing new procedures for the Custodian's submission of fee petitions, and governing the confidentiality of the billing records filed with the Custodian's fee petition.

         (5) On November 27, 2019, the Clerk issued notices in Appeal Nos. 439, 2019, 441, 2019, and 501, 2019 directing TransPerfect and Shawe to show cause why the appeals should not be dismissed for their failure to comply with Rule 42. The notices also directed TransPerfect and Shawe to explain the basis for their contention that the orders on appeal fell within the collateral order doctrine. The Custodian was directed to respond to the appellants' submissions.

         (6) On December 2, 2019, TransPerfect and Shawe filed Appeal No. 509, 2019 as a notice of interlocutory appeal from the Second Order. They had previously filed an application for the certification of an interlocutory appeal in the Court of Chancery, which the Custodian opposed. The Court of Chancery denied the application on November 27, 2019, [5] referring to its denial of the previous application for certification. The Court of Chancery reiterated that an interlocutory appeal of the Opinion, First Order, and Second Order did not make sense until all related issues were resolved so that there could be one interlocutory appeal.

         (7) We first address whether Appeal Nos. 439, 2019, 441, 2019, and 501, 2019 should be dismissed for the appellants' failure to comply with Rule 42.[6] In their responses to the notices to show cause, TransPerfect and Shawe argue that the Opinion and First Order as well as the Second Order are appealable under the collateral order doctrine. The Custodian disagrees, arguing that the orders do not meet the requirements of the collateral order doctrine.

         (8) The collateral order doctrine is characterized as "a common law recognition that certain collateral orders constitute final judgments."[7] Under the collateral order doctrine, "orders which a) determine matters independent of the issues involved in the proceeding itself, b) bind persons who are non-parties in the underlying proceeding, and c) have a substantial, continuing effect on important rights are final and subject to immediate appellate review."[8] The doctrine "only applies to 'that small class [of decisions] which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.'"[9]

         (9) Having carefully considered the orders and the parties' positions, we conclude that the orders do not fall within the collateral order doctrine. The orders are not final and do not have a substantial, continuing effect on important rights. As the Court of Chancery recognized, the amount of fees to be awarded to the Custodian pursuant to the First Order is unresolved. Similarly, the parties are currently litigating the appellants' objections to the Custodian's fee petitions, including the petitions that led to the Fee Orders, under the process set forth in the Second Order. In light of the issues still to be determined, the appellants' reliance on Evans v. Justice of the ...


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