Chancery Denies Interlocutory Appeal Of Spoilation Issues

The Court of Chancery recently ruled on a request for interlocutory appeal as it related to the Court's rulings on spoliation issues. In the decision of Chrome Systems, Inc. v. Autodata Solutions, Inc., et al., C.A. No. 11808-VCG (Del. Ch. Sept. 21, 2016), Vice Chancellor Glasscock declined to certify the interlocutory appeal.

Plaintiff brought the case alleging that defendants improperly dissolved a joint venture of the parties. By previous bench ruling, the Court found that the parties contractually agreed to arbitrate the dispute, excluding injunctive relief. The Court retained jurisdiction in the event the arbitrator found that certain issues were non-arbitrable. Otherwise the arbitration moved forward on an expedited path.

The Plaintiff asked this Court to hold a hearing on, and use the contempt power to redress, the Defendants' alleged spoliation (over which the Court reserved jurisdiction as well). By bench ruling on March 10, 2016, the Court exercised its discretion to hear only that evidence of spoliation or litigation misconduct occurring after the litigation was filed, which has the potential to have worked a fraud on the Court. The Court found that other evidence of misconduct should be presented to the arbitrator, who will be able to...