Kulak v. Itshak On

• Court: Court of Chancery of Delaware
• Decided: August 12, 2024
• Docket: C.A. No. 2023-0011-KSJM
• Status: Published

Opinion

COURT OF CHANCERY OF THE STATE OF DELAWARE KATHALEEN ST. JUDE MCCORMICK LEONARD L. WILLIAMS JUSTICE CENTER CHANCELLOR 500 N. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734

August 12, 2024

Itshak On J. Clayton Athey, Esq. Keren-Or On Seth T. Ford, Esq. 24 Haavoda St. Prickett, Jones & Elliott, P.A. Tel-Aviv, Israel 6382132 1310 N. King Street Wilmington, DE 19801

Re: Kulak v. Itshak On, et al. C.A. No. 2023-0011-KSJM

Dear Counsel and Parties:

This letter resolves the defendants’ motion to recuse.1 The defendants argue

that I should recuse myself from this action because I partially ruled in favor of the

plaintiff on the parties’ earlier motions. The defendants say that this “demonstrated

a discernible bias against” them.2

The impartiality of the presiding judge “is a fundamental principle of the

administration of justice.”3 The Delaware Supreme Court has held that “[a]s a matter

of due process, a litigant is entitled to neutrality on the part of the presiding judge

1 C.A. No. 2023-0011-KSJM, Docket (“Dkt.”) 105 (“Mot. to Recuse”).

2 Id. at 16. The defendants assert their arguments under 28 U.S.C. § 445, which does not apply to Delaware state courts. In re AMC Ent. Hldgs., Inc. S’holder Litig., 2023 WL 6012794, at *1 n.8 (Del. Ch. Sept. 15, 2023), aff’d, 2024 WL 2305792 (Del. May 22, 2024). Instead, I rely on Delaware’s relevant standards, which is Delaware Judges’ Code of Judicial Conduct Rule 2.11. 3 Los v. Los, 595 A.2d 381, 383 (Del. 1991). C.A. No. 2023-0011-KSJM August 12, 2024 Page 2 of 3

but the standards governing disqualification also require the appearance of

impartiality.”4

Determining whether the presiding judge has a personal bias or prejudice

requires that the court engage in a two-part analysis.5 First, “[s]he must, as a matter

of subjective belief, be satisfied that [s]he can proceed to hear the cause free of bias

or prejudice concerning that party.”6 “Second, even if the judge believes that [s]he

has no bias, situations may arise where, actual bias aside, there is the appearance of

bias sufficient to cause doubt as to the judge’s impartiality.”7 Delaware’s approach to

recusal “reflects an obvious tenet: that there is a duty incumbent on judges not to

unreasonably burden fellow judges by recusing in response to a weak argument for

disqualification.”8

Both prongs are met here. I am satisfied that I can hear this action free of bias

and prejudice. And there have been no circumstances that have created an

appearance of bias sufficient to cast doubt as to my impartiality.9

4 Id. at 383 (citing Ungar v. Sarafite, 376 U.S. 575, 588 (1964)).

5 Id. at 384–85.

6 Id.

7 Id. at 385 (citation omitted).

8State v. Desmond, 2011 WL 91984, at *12 (Del. Super. Jan. 5, 2011) (internal quotation marks and citation omitted), aff’d, 29 A.3d 245 (Del. 2011) (TABLE). 9 The defendants believe that “only a judge with a public sector background can maintain the requisite impartiality to adjudicate this matter fairly.” Def’s Mot. to Recuse at 15–16. I disagree. But I also note that I began my legal career as a staff attorney with the Community Legal Aid Society, Inc. C.A. No. 2023-0011-KSJM August 12, 2024 Page 3 of 3

Instead of identifying instances of personal bias or prejudice, the defendants

merely raise several objections to my prior rulings.10 Substantive disagreements with

prior rulings are not grounds for recusal.11

Accordingly, the motion is denied.

The plaintiff asks that I shift the fees he incurred in responding to this motion

because, to the plaintiff, the motion is “frivolous.”12 Fee shifting is not warranted

here. The defendants’ arguments were not meritorious, but beyond pointing to my

warning in the May 28, 2024 Letter Decision,13 the plaintiff has not shown that the

defendants’ actions in connection with this motion meet the heavy burden necessary

to shift fees for improper litigation conduct.

IT IS SO ORDERED.

Sincerely,

/s/ Kathaleen St. Jude McCormick

Chancellor

cc: All counsel of record (by File & ServeXpress)

10 Id. at 7–15.

11 In re AMC, 2023 WL 6012794, at *2 (“He contends that . . . I ‘abuse[d]’ the Full

Faith and Credit Clause of the United States Constitution by not requiring the settlement to include an opt-out right. Holland’s points may be grounds for appeal, but they are not grounds for recusal.” (citation omitted)). 12 Dkt. 106 ¶ 12.

13 Kulak v. On, 2024 WL 2735436, at *4 (Del. Ch. May 28, 2024), dismissing appeal,

2024 WL 3242126 (Del. July 1, 2024).