Chancery Bars Claims Based on “Issue Preclusion” Doctrine

TR Investors, LLC v. Genger, C.A. No. 6697-CS (Del. Ch. Feb. 18, 2013).

Issue addressed: Whether the doctrine of “issue preclusion” prevented the relitigation of issues previously decided, and thus supported the grant of a motion for summary judgment. Short answer: Yes.

Short Overview

This 58-page opinion chronicles the long and tortuous procedural history of the internecine strife among the parties in this case over many years in multiple courts in two states. See generally several prior Delaware decisions in this long-running dispute highlighted on these pages here, herehere and here.

The Court of Chancery explains in exhaustive and exhausting detail the lengthy history of the multiple court decisions in two states involving overlapping issues. The bottom line on a practical level for most readers, regarding why this decision merits a post on this blog, is that this opinion discusses principles with wide application on at few useful points of law.

First, it discusses and applies the doctrine of issue preclusion (as compared to the doctrine of claim preclusion), that prevents a party from litigating an issue previously decided in litigation between the parties. This opinion is must reading for anyone who needs to know the latest Delaware law on those two concepts, and wonders how they might interface with the principles of res judicata and collateral estoppel.

Second, it addresses a situation where a party (represented in this case by a former vice chancellor) was unsuccessful in thwarting a motion for summary judgment despite submitting an affidavit based on counsel’s personal knowledge, that provided a lengthy list of arguments about why more discovery was needed in order to develop a more complete factual record on key issues, before a motion for summary judgment would be ripe. That effort failed in part due to the doctrine of issue preclusion. Regarding Court of Chancery Rule 56(e), as compared to Rule 56(f), the court explained that:

The party opposing summary judgment may not merely deny the facts in the affidavit, but ―by affidavits or . . . otherwise, must ―set forth specific facts showing that there is a genuine issue for trial.  If the opposing party cannot provide an affidavit contesting the facts set forth in the moving party‘s affidavit, it may, under Rule 56(f), furnish an affidavit showing why discovery is required.