Claros Diagnostics, Inc. Shareholders Representative Committee v. OPKO Health, Inc.

• Court: Court of Chancery of Delaware
• Decided: June 2, 2020
• Docket: CA No. 2019-0262-SG
• Status: Published

Opinion

COURT OF CHANCERY OF THE SAM GLASSCOCK III STATE OF DELAWARE COURT OF CHANCERY COURTHOUSE VICE CHANCELLOR 34 THE CIRCLE GEORGETOWN, DELAWARE 19947

Date Submitted: March 4, 2020 Date Decided: June 2, 2020

Joanna J. Cline, Esq. David J. Teklits, Esq. Christopher B. Chuff, Esq. Alexandra M. Cumings, Esq. Ellis E. Herington, Esq. MORRIS, NICHOLS, ARSHT & PEPPER HAMILTON LLP TUNNELL LLP 1313 N. Market Street, Suite 5100 1201 N. Market Street, 16th Floor P.O. Box 1709 Wilmington, DE 19801 Wilmington, DE 19899

RE: Claros Diagnostics, Inc. Shareholders Representative Committee et al. v. OPKO Health, Inc., C.A. No. 2019-0262-SG

Dear Counsel:

This matter is before me on the Motion of the Plaintiff Claros Diagnostics,

Inc. Shareholder Representative Committee (the “Committee”) for Reargument of a

portion of my Memorandum Opinion of February 19. 2020 (the “Decision”).1 The

Decision, inter alia, denied the Plaintiff’s Motion to Strike an affirmative defense of

unclean hands. One productive use of a motion for reargument is to “forestall a final

opinion in which the judge . . . has inadvertently failed to respond to an argument of

1 See Claros Diagnostics, Inc. S’holders Representative Comm. v. OPKO Health, Inc., 2020 WL 829361 (Del. Ch. Feb. 19, 2020). counsel.”2 In the Decision, I found the allegation of unclean hands was best decided

on a record, and denied the Motion to Strike on that basis.3 The Committee correctly

points out that I did not explicitly rule on a part of its argument in favor of the Motion

to Strike; that, as a party discrete from those alleged to have acted with unclean

hands, it cannot be subject to an unclean hands defense. I regret not being more

explicit, an omission that has led to this reasonable motion practice by the

Committee and the effort from both sides associated with it. Nonetheless, the

Motion for Reargument is denied.

Among the issues to be addressed in way of the unclean hands defense upon

a developed record is whether the wrongdoing alleged in the unclean hands defense

against Claros and its agents is so intertwined with the creation of the Committee,

and the rights the Committee seeks to enforce here, that equity would be sullied by

granting that relief.4

For the foregoing reason, the Motion for Reargument of my denial of the

Motion to Strike the unclean hands defense is DENIED.

It is SO ORDERED.

2 Manti Holdings, LLC v. Authentix Acquisition Co., Inc., 2019 WL 3814453, at *1 (Del. Ch. Aug. 14, 2019). 3 Claros, 2020 WL 829361, at *12–*13. 4 See McKenna v. Singer, 2017 WL 3500241, at *14 (Del. Ch. July 31, 2017) (citing In re Rural/Metro Corp. S’holders Litig., 102 A.3d 205, 238–39 (Del. Ch. 2014)) (“The Court of Chancery has held that fraudulent misrepresentations can constitute inequitable conduct for unclean hands purposes when the misrepresentations have an ‘immediate and necessary’ connection to the claims asserted.”). 2 Sincerely,

/s/ Sam Glasscock III

Sam Glasscock III