Wednesday, February 10, 2021

Dismissed With Advice

The Delaware Supreme Court affirmed the denial of relief based on an alleged undisclosed judicial conflict

In 2010, Appellants Meso Scale Diagnostics, LLC and Meso Scale Technologies, LLC (collectively “Meso”) filed suit in the Court of Chancery against Appellee entities Roche Diagnostics GmbH, Roche Diagnostics Corp., Roche Holding Ltd., IGEN LS LLC, Lilli Acquisition Corp., IGEN International, Inc., and Bioveris Corp. (collectively “Roche”), all of which are or were affiliates or subsidiaries of the F. Hoffmann -- La Roche, Ltd. family of pharmaceutical and diagnostics companies. Meso alleged two counts of breach of contract. Roche prevailed at trial, and this Court affirmed the judgment in 2014.

On February 28, 2019, Meso brought a new action asking the court to reopen the case, vacate the judgment entered after trial, and order a new trial. Meso alleged that the Vice Chancellor who decided its case four years earlier had an undisclosed disabling conflict, namely, that Roche’s counsel had been simultaneously representing him in an unrelated federal suit challenging the constitutionality of Delaware’s law providing for confidential business arbitration in the Court of Chancery, 10 Del. C. § 349 (“Section 349”). In that federal litigation, which ended in 2014, the Chancellor and Vice Chancellors of the Court of Chancery, as the parties responsible for implementing the challenged statute, were nominal defendants (hereinafter, the “Judicial Officers”).

The Court of Chancery denied relief and dismissed the action. Meso appeals.

For the following reasons, we AFFIRM the judgment of the Court of Chancery.

The court recited a number of trial court findings

As to extraordinary circumstances, the trial court found that granting relief would severely prejudice Roche by negating a long-settled judgment obtained after trial, while Meso had failed to allege any injustice that it would suffer. Likewise, the trial court found that “the ostensible judicial ethics violation Meso has identified is not remotely, much less conceivably, serious under the Rule 60(b) rubric.”

The court here

We start with the basic rules governing judicial disqualification and recusal and then consider other ethical considerations relevant to the unique circumstances presented here. We then address the Rule 60(b) issues Meso has raised on appeal.

After its survey of court and ethics opinions

the capacity in which a judicial officer is sued is an important factor to consider. On one end of that continuum is a lawyer representing a judge in highly personal litigation such as a divorce or personal injury case (as in In re Howes). On the other end might be, for example, a situation where a member of the Department of Justice (“DOJ”), pursuant to state statute,94 represents a judicial officer sued in her official capacity. Even when judges are sued in their official capacity, there are often other nuances...

In this case, the DelCOG Litigation asserted a cause of action under 42 U.S.C. § 1983.95 The record overwhelmingly shows that Vice Chancellor Parsons was named as a defendant in his official capacity as a Vice Chancellor of the Court of Chancery and was merely a nominal party in the DelCOG Litigation. He had no financial, reputational, or other personal stake in the suit at any time.

Result

The Vice Chancellor did not decide whether recusal was required in this case, and he concluded that he did not need to reach the constitutional questions “because, even if Meso has identified a due process violation, Meso very clearly has not satisfied the requirement of Court of Chancery Rule 60(b) to obtain relief from a final judgment.” We agree. We nevertheless have discussed the ethical principles at some length to reinforce that such dual representation situations should be avoided and that the need for vigilance at the outset of a case is imperative. A judge who finds herself in such a situation should follow the procedure set forth in Los — assuming the judge has no actual bias or prejudice, the judge must examine the facts and circumstances of the particular case to determine whether the judge’s impartiality might reasonably be questioned. We acknowledge Meso’s concerns, and we agree with Meso that even though it asserts noclaim of any actual bias or prejudice on his part, the Vice Chancellor, at a minimum, should have disclosed the representation on the record. Meso then would have had the option of waiving the conflict, or formally seeking the Vice Chancellor’s recusal thereby allowing the recusal issues to be addressed in the proceeding directly instead of years later in a collateral challenge to a final judgment after trial where additional issues come into play.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2021/02/the-delaware-supreme-court-in-2010-appellants-meso-scale-diagnostics-llc-and-meso-scale-technologies-llc-collectively.html

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