COURT OF CHANCERY OF THE STATE OF DELAWARE LORI W. WILL LEONARD L. WILLIAMS JUSTICE CENTER VICE CHANCELLOR 500 N. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734
Date Submitted: July 3, 2023 Date Decided: July 7, 2023
Joseph B. Cicero, Esquire T. Brad Davey, Esquire Paul D. Brown, Esquire Mathew A. Golden, Esquire Chipman Brown Cicero & Cole, LLP Potter Anderson & Corroon LLP 1313 North Market Street, Suite 5400 1313 North Market Street, 6th Floor Wilmington, Delaware 19801 Wilmington, Delaware 19801
RE: Dale Riker et al. v. Teucrium Trading, LLC, C.A. No. 2022-1030-LWW
Dear Counsel:
This letter resolves defendant Teucrium Trading, LLC’s Application for
Certification of an Interlocutory Appeal (the “Application”). 1 The Application
concerns my June 13, 2023 bench ruling on the parties’ cross-motions for summary
judgment (the “Ruling”) and implementing order. 2 In the Ruling, I granted the
plaintiffs’ cross-motion for summary judgment on their entitlement to advancement
1 Def.’s Appl. for Certification of an Interlocutory Appeal (Dkt. 50) (“Appl.”). 2 See Tr. of June 13, 2023 Telephonic Rulings of the Ct. on Pls.’ Cross-Mot. for Summ. J. on Entitlement to Advancement and Def.’s Cross-Motion for Summ. J. (Dkt. 55) (“Ruling Tr.”); see also Minute Order (Dkt. 46). C.A. No. 2022-1030-LWW July 7, 2023 Page 2 of 7
and denied the defendant’s cross-motion. For the following reasons, the Application
for an interlocutory appeal of that Ruling is refused.
I. BACKGROUND
This advancement action was filed by plaintiffs Dale Riker and Barbara Riker
on November 15, 2022. Dale Riker is the former Chief Executive Officer of
defendant Teucrium Trading, LLC. Barbara Riker is the company’s former Chief
Financial Officer. The plaintiffs sought advancement of certain fees and expenses
incurred in connection with a plenary action captioned Gilbertie v. Riker, C.A. No.
2020-1018-LWW, as well as fees on fees. Advancement was sought pursuant to the
October 26, 2009 Amended and Restated Limited Liability Company Agreement of
Teucrium Trading, LLC (the “LLC Agreement”).
In the Ruling, I concluded that the plaintiffs had demonstrated their
entitlement to mandatory advancement under the LLC Agreement as a matter of
law.3 I also determined that the plaintiffs were entitled to fees on fees.4 In terms of
next steps, I “aske[d] that the parties meet and confer on any remaining allocation
disputes or specific disputes about time entries” in light of my guidance on each
3 Ruling Tr. 27-28. 4 Id. at 27. C.A. No. 2022-1030-LWW July 7, 2023 Page 3 of 7
claim and counterclaim at issue.5 Any outstanding disputes were to be resolved
“under the Fitracks process.”6
Teucrium filed the Application on June 23, 2023. On July 3, 2023, the
plaintiffs filed an opposition to the Application.
II. ANALYSIS
Delaware Supreme Court Rule 42 governs interlocutory appeals.
Rule 42(b)(i) provides that “[n]o interlocutory appeal will be certified by the trial
court or accepted by this Court unless the order of the trial court decides a substantial
issue of material importance that merits appellate review before a final judgment.”7
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.”8 For this reason, “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.”9
5 Id. at 28. 6 Id. 7 Supr. Ct. R. 42(b)(i). 8 Supr. Ct. R. 42(b)(ii). 9 Id. C.A. No. 2022-1030-LWW July 7, 2023 Page 4 of 7
When determining whether to certify an interlocutory appeal, the trial court
should consider the eight factors set out in Rule 42(b)(iii). The court is to “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.”10 After
balancing these factors and weighing the costs and benefits, I conclude that
interlocutory review should be denied.
Teucrium asserts that the Ruling “decided a ‘substantial issue of material
importance’ because it resolve[d] all underlying questions of liability for
advancement on each claim for which the Rikers have sought advancement.”11 In
some advancement cases, the substantial issue criterion has been met.12 But even if
it were met here, any benefit from permitting an interlocutory appeal of the Ruling
would be uncertain at best and outweighed by the considerable costs.
Teucrium insists that an interlocutory appeal would carry a “modest price”
compared to the “substantial burden” it bears from the plaintiffs’ ongoing
10 Supr. Ct. R. 42(b)(iii)(H). 11 Appl. ¶ 5. 12 See Pontone v. Milso Indus. Corp., 2014 WL 4967228, at *2 (Del. Ch. Oct. 6, 2014) (holding that an order granting partial advancement determined a “substantial issue” for purposes of an interlocutory appeal request). C.A. No. 2022-1030-LWW July 7, 2023 Page 5 of 7
advancement requests.13 The court considered and rejected a similar argument in
Sider v. Hertz Global Holdings, Inc.14 In Sider, the defendant was ordered to make
advancement payments and sought an interlocutory appeal before the payments
commenced. The court explained that the defendant’s approach would upend the
normal course of advancement proceedings and the “dynamic favoring advancement
claimants.”15 The court observed: “‘[t]he policy of Delaware favors advancement
when it is provided for, with the Company’s remedy for improperly advanced fees
being recoupment at the indemnification stage,’ or on appeal after issues of
reasonableness have been finally resolved.” 16 Here, Teucrium’s argument is
similarly problematic.
Moreover, none of the Rule 42(b)(iii) factors cited by Teucrium—specifically,
(A), (B), (G), and (H)—support interlocutory review.17 First, the Ruling did not
present an issue of first impression; it considered a factual situation that has some
differences from applicable precedent.18 The court also applied straightforward and
13 Appl. ¶ 5. 14 2019 WL 2501481, at *3 (Del. Ch. June 17, 2019) (ORDER). 15 Id. (“[I]t should be easier to turn the ‘advancement spigot’ on than to turn it off.”) (citation omitted). 16 Id. at *3 (quoting Mooney v. Echo Therapeutics, Inc., 2015 WL 3413272, at *6 (Del. Ch. May 28, 2015)). 17 Appl. ¶¶ 6-11. 18 Ruling Tr. 17-20. C.A. No. 2022-1030-LWW July 7, 2023 Page 6 of 7
well-settled principles of contract interpretation.19 Second, Teucrium does not cite
any decision squarely conflicting with the Ruling. Third, an appellate ruling on
advancement entitlement will not dispose of the action entirely. Even if the appeal
were successful, Teucrium will be responsible for advancement on certain claims
and the Fitracks procedure will continue.20 Finally, an interlocutory appeal would
not serve considerations of justice. As discussed above, Delaware public policy
favors advancement. This policy interest “suggest[s] that interlocutory appeals in
advancement cases should be reserved for particularly exceptional cases.”21
There is nothing exceptional about this case or the Ruling.
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COURT OF CHANCERY OF THE STATE OF DELAWARE LORI W. WILL LEONARD L. WILLIAMS JUSTICE CENTER VICE CHANCELLOR 500 N. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734
Date Submitted: July 3, 2023 Date Decided: July 7, 2023
Joseph B. Cicero, Esquire T. Brad Davey, Esquire Paul D. Brown, Esquire Mathew A. Golden, Esquire Chipman Brown Cicero & Cole, LLP Potter Anderson & Corroon LLP 1313 North Market Street, Suite 5400 1313 North Market Street, 6th Floor Wilmington, Delaware 19801 Wilmington, Delaware 19801
RE: Dale Riker et al. v. Teucrium Trading, LLC, C.A. No. 2022-1030-LWW
Dear Counsel:
This letter resolves defendant Teucrium Trading, LLC’s Application for
Certification of an Interlocutory Appeal (the “Application”). 1 The Application
concerns my June 13, 2023 bench ruling on the parties’ cross-motions for summary
judgment (the “Ruling”) and implementing order. 2 In the Ruling, I granted the
plaintiffs’ cross-motion for summary judgment on their entitlement to advancement
1 Def.’s Appl. for Certification of an Interlocutory Appeal (Dkt. 50) (“Appl.”). 2 See Tr. of June 13, 2023 Telephonic Rulings of the Ct. on Pls.’ Cross-Mot. for Summ. J. on Entitlement to Advancement and Def.’s Cross-Motion for Summ. J. (Dkt. 55) (“Ruling Tr.”); see also Minute Order (Dkt. 46). C.A. No. 2022-1030-LWW July 7, 2023 Page 2 of 7
and denied the defendant’s cross-motion. For the following reasons, the Application
for an interlocutory appeal of that Ruling is refused.
I. BACKGROUND
This advancement action was filed by plaintiffs Dale Riker and Barbara Riker
on November 15, 2022. Dale Riker is the former Chief Executive Officer of
defendant Teucrium Trading, LLC. Barbara Riker is the company’s former Chief
Financial Officer. The plaintiffs sought advancement of certain fees and expenses
incurred in connection with a plenary action captioned Gilbertie v. Riker, C.A. No.
2020-1018-LWW, as well as fees on fees. Advancement was sought pursuant to the
October 26, 2009 Amended and Restated Limited Liability Company Agreement of
Teucrium Trading, LLC (the “LLC Agreement”).
In the Ruling, I concluded that the plaintiffs had demonstrated their
entitlement to mandatory advancement under the LLC Agreement as a matter of
law.3 I also determined that the plaintiffs were entitled to fees on fees.4 In terms of
next steps, I “aske[d] that the parties meet and confer on any remaining allocation
disputes or specific disputes about time entries” in light of my guidance on each
3 Ruling Tr. 27-28. 4 Id. at 27. C.A. No. 2022-1030-LWW July 7, 2023 Page 3 of 7
claim and counterclaim at issue.5 Any outstanding disputes were to be resolved
“under the Fitracks process.”6
Teucrium filed the Application on June 23, 2023. On July 3, 2023, the
plaintiffs filed an opposition to the Application.
II. ANALYSIS
Delaware Supreme Court Rule 42 governs interlocutory appeals.
Rule 42(b)(i) provides that “[n]o interlocutory appeal will be certified by the trial
court or accepted by this Court unless the order of the trial court decides a substantial
issue of material importance that merits appellate review before a final judgment.”7
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.”8 For this reason, “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.”9
5 Id. at 28. 6 Id. 7 Supr. Ct. R. 42(b)(i). 8 Supr. Ct. R. 42(b)(ii). 9 Id. C.A. No. 2022-1030-LWW July 7, 2023 Page 4 of 7
When determining whether to certify an interlocutory appeal, the trial court
should consider the eight factors set out in Rule 42(b)(iii). The court is to “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.”10 After
balancing these factors and weighing the costs and benefits, I conclude that
interlocutory review should be denied.
Teucrium asserts that the Ruling “decided a ‘substantial issue of material
importance’ because it resolve[d] all underlying questions of liability for
advancement on each claim for which the Rikers have sought advancement.”11 In
some advancement cases, the substantial issue criterion has been met.12 But even if
it were met here, any benefit from permitting an interlocutory appeal of the Ruling
would be uncertain at best and outweighed by the considerable costs.
Teucrium insists that an interlocutory appeal would carry a “modest price”
compared to the “substantial burden” it bears from the plaintiffs’ ongoing
10 Supr. Ct. R. 42(b)(iii)(H). 11 Appl. ¶ 5. 12 See Pontone v. Milso Indus. Corp., 2014 WL 4967228, at *2 (Del. Ch. Oct. 6, 2014) (holding that an order granting partial advancement determined a “substantial issue” for purposes of an interlocutory appeal request). C.A. No. 2022-1030-LWW July 7, 2023 Page 5 of 7
advancement requests.13 The court considered and rejected a similar argument in
Sider v. Hertz Global Holdings, Inc.14 In Sider, the defendant was ordered to make
advancement payments and sought an interlocutory appeal before the payments
commenced. The court explained that the defendant’s approach would upend the
normal course of advancement proceedings and the “dynamic favoring advancement
claimants.”15 The court observed: “‘[t]he policy of Delaware favors advancement
when it is provided for, with the Company’s remedy for improperly advanced fees
being recoupment at the indemnification stage,’ or on appeal after issues of
reasonableness have been finally resolved.” 16 Here, Teucrium’s argument is
similarly problematic.
Moreover, none of the Rule 42(b)(iii) factors cited by Teucrium—specifically,
(A), (B), (G), and (H)—support interlocutory review.17 First, the Ruling did not
present an issue of first impression; it considered a factual situation that has some
differences from applicable precedent.18 The court also applied straightforward and
13 Appl. ¶ 5. 14 2019 WL 2501481, at *3 (Del. Ch. June 17, 2019) (ORDER). 15 Id. (“[I]t should be easier to turn the ‘advancement spigot’ on than to turn it off.”) (citation omitted). 16 Id. at *3 (quoting Mooney v. Echo Therapeutics, Inc., 2015 WL 3413272, at *6 (Del. Ch. May 28, 2015)). 17 Appl. ¶¶ 6-11. 18 Ruling Tr. 17-20. C.A. No. 2022-1030-LWW July 7, 2023 Page 6 of 7
well-settled principles of contract interpretation.19 Second, Teucrium does not cite
any decision squarely conflicting with the Ruling. Third, an appellate ruling on
advancement entitlement will not dispose of the action entirely. Even if the appeal
were successful, Teucrium will be responsible for advancement on certain claims
and the Fitracks procedure will continue.20 Finally, an interlocutory appeal would
not serve considerations of justice. As discussed above, Delaware public policy
favors advancement. This policy interest “suggest[s] that interlocutory appeals in
advancement cases should be reserved for particularly exceptional cases.”21
There is nothing exceptional about this case or the Ruling. The LLC
Agreement grants advancement rights. The court interpreted the LLC Agreement
on a paper record and determined that the plaintiffs were entitled to advancement.
19 Id. at 20-21; see West Willow-Bay Ct., LLC v. Robino-Bay Ct. Plaza, LLC, 2007 WL 4357667, at *3 (Del. Ch. Dec. 6, 2007) (denying certification where “[n]o novel or unsettled law . . . informed the Court’s reading of the Agreement. That a trial court may have been (or was) wrong is not the standard for interlocutory review.”). 20 In its cross-motion, Teucrium did not challenge whether the plaintiffs were named defendants or respondents with respect to Counts V through VII in the plenary action. Thus, a successful appeal would not affect the Ruling on those counts. Further, the Ruling did not address Teucrium’s “by reason of the fact” arguments because that requirement only pertains to indemnification under the plain text of the LLC Agreement. If a similar requirement were read into the advancement provision of the LLC Agreement, this court would need to revisit the issue. 21 Salomon v. Kroenke Sports & Ent., LLC, 2020 WL 3963937, at *3 (Del. Ch. July 8, 2020) (declining to certify an interlocutory appeal of an advancement decision). C.A. No. 2022-1030-LWW July 7, 2023 Page 7 of 7
And a procedure was set to resolve disputes over the reasonableness of the plaintiffs’
requested fees and expenses.
III. CONCLUSION
Under these circumstances, I cannot certify the Ruling for an interlocutory
appeal. The costs of certification, including the drain on judicial resources from
adjudicating piecemeal appeals, would outweigh any benefit.22 Accordingly, the
Application is refused.23
To the extent necessary for this decision to take effect, IT IS SO ORDERED.
Sincerely yours,
/s/ Lori W. Will Lori W. Will Vice Chancellor
22 See Sup. Ct. R. 42(b)(ii); see, e.g., Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Axiall Corp., 2019 WL 4795508, at *2 (Del. Oct. 1, 2019) (TABLE) (refusing an interlocutory appeal because the ruling was “not exceptional” and “the potential benefits of interlocutory review do not outweigh the inefficiency, disruption, and probable costs caused by an interlocutory appeal”). 23 See Supr. Ct. R. 42(d)(iv)(D) (directing that the notice of appeal to the Supreme Court attach “[t]he order, if any, of the trial court certifying or refusing to certify the interlocutory appeal”).