In Re Columbia Pipeline Group, Inc. Merger Litigation

• Court: Supreme Court of Delaware
• Decided: April 14, 2021
• Docket: 99, 2021
• Status: Published

Opinion

IN THE SUPREME COURT OF THE STATE OF DELAWARE

IN RE COLUMBIA PIPELINE § No. 99, 2021 GROUP, INC. MERGER § LITIGATION § Court Below—Court of Chancery § of the State of Delaware § § Consol. C.A. No. 2018-0484 - JTL §

Submitted: March 30, 2021 Decided: April 14, 2021

Before VALIHURA, VAUGHN, and TRAYNOR, Justices.

ORDER

Upon consideration of the notice of interlocutory appeal, the supplemental

notice of interlocutory appeal, and the exhibits attached thereto, it appears to the

Court that:

(1) The defendants below-appellants, Robert C. Skaggs, Jr., Stephen P.

Smith, and TransCanada Corporation, have petitioned this Court under Supreme

Court Rule 42 to accept an interlocutory appeal from a Court of Chancery opinion

denying their motion to dismiss the complaint filed by plaintiffs below-appellees,

former stockholders of Columbia Pipeline Group. In the complaint, the plaintiffs

alleged that the individual defendants breached their fiduciary duties in connection

with TransCanada’s acquisition of Columbia and that defendant TransCanada aided

and abetted those breaches. The defendants moved to dismiss the complaint for

failure to state a claim under Court of Chancery Rule 12(b)(6). Relying on a decision in an appraisal action brought by different Columbia stockholders and a decision in

a federal securities action also brought by different Columbia stockholders, the

defendants argued that principles of collateral estoppel and stare decisis required

dismissal of the complaint.

(2) On March 1, 2021, the Court of Chancery issued an opinion denying

the defendants’ motion to dismiss.1 The court concluded that the doctrine of

collateral estoppel did not apply because the plaintiffs were not parties to the

appraisal action or the federal securities action and were not bound by the rulings in

those actions.2 The court concluded that the doctrine of stare decisis did not apply

because the claims at issue in the fiduciary duty case were different than the claims

at issue in the appraisal action and the federal securities action.3

(3) On March 11, 2021, the defendants filed an application for certification

of an interlocutory appeal. They argued that the interlocutory opinion decided

substantial issues of material importance and that at least four of the eight Rule

42(b)(iii) criteria weighed in favor of certification. The plaintiffs opposed the

application for certification. On March 30, 2021, the Court of Chancery denied the

application for certification.

1 In re Columbia Pipeline Group, Inc. Merger Litig., 2021 WL 772562 (Del. Ch. Mar. 1, 2021). 2 Id. at 28-29. 3 Id. at 35-36, 43-49. 2 (4) Analyzing the Rule 42(b)(iii) criteria invoked by the defendants, the

court held that that Rule 42 (b)(iii)(A) (question of law resolved for the first time in

Delaware) did not weigh in favor of certification because the opinion applied settled

principles of law. The court held that Rule 42(b)(iii)(B) (conflict within the trial

courts on the question of law) did not support certification because there was no

conflict in Delaware cases addressing the application of collateral estoppel to related

actions brought by fellow stockholders or the application of stare decisis to related

actions brought by fellow stockholders. As to Rule 42(b)(iii)(G) (interlocutory

review may terminate the litigation), the court acknowledged that reversal of the

opinion could terminate the litigation, but found that this provided limited support

for certification. The court concluded that Rule(b)(iii)(H) (interlocutory review may

serve considerations of justice) did not weigh in favor of certification because the

issues in the case had not already been litigated in the appraisal action and securities

action as the defendants contended. Finally, the court found that the benefits of

interlocutory review would not outweigh the probable costs.

(5) Applications for interlocutory review are addressed to the sound

discretion of the Court.4 In determining whether to accept an interlocutory appeal,

this Court may consider all relevant factors, including the trial court’s decision about

4 Supr. Ct. R. 42(d)(v). 3 whether to certify an interlocutory appeal.5 In the exercise of our discretion and

giving due weight to the Court of Chancery’s view, we have concluded that the

application for interlocutory review does not meet the strict standards for

certification under Rule 42. Exceptional circumstances that would merit

interlocutory review of the Court of Chancery’s decision do not exist in this case,6

and the potential benefits of interlocutory review do not outweigh the inefficiency,

disruption, and probable costs caused by an interlocutory appeal.7

NOW, THEREFORE, IT IS ORDERED that the interlocutory appeal is

REFUSED.

BY THE COURT:

/s/ James T. Vaughn, Jr. Justice

5 Id. 6 Id. R. 42(b)(ii). 7 Id. R. 42(b)(iii). 4