The 36th Annual Francis G. Pileggi Distinguished Lecture in Law (named after the father of this blog’s primary author), is presented by The Delaware Journal of Corporate Law of Widener University’s Delaware Law School

This year’s topic is

Business Ethics: What Everyone Needs to Know

Professor J. S. Nelson
Visiting Associate Professor at the Harvard Business School
Associate Professor at Villanova Law School

Monday, April 25, 2022
8:00 a.m. Breakfast; 8:45 a.m. Lecture

Hotel DuPont, du Barry Room
11th and Market Streets
Wilmington, Delaware 19801

Many of the prior 35 Annual Distinguished Lectures have been highlighted on these pages.

One ethics CLE credit available in Delaware, Pennsylvania and New Jersey. The brochure is available at this link.

Online registration form available at

For additional information or for accessibility and special needs requests, contact Carol Perrupato at or 302-477-2178.

A recent decision of the Delaware Court of Chancery acknowledged longstanding precedent which prohibits a state court from enjoining proceedings in a federal court.  In Schwartz v. Cognizant Technologies Solutions Corporation, C.A. No. 2021-0634-LWW (Del. Ch. March 25, 2022), the court recited several well­-established principles barring it from issuing an injunction to interfere with a federal court proceeding–which should be compared to the many decisions that have been discussed on these pages over the last 17 years regarding the well-settled enforceability of forum selection clauses.

Extensive background facts about the underlying advancement litigation appears in a Reuters article that describes the dispute between the parties as “lurid”. Extensive commentary on advancement cases have appeared on these pages over the last 17 years, but this case provides an usual procedural twist.


  • The court relied on several United States Supreme Court decisions for the principle that a state court cannot enjoin proceedings in a federal court. See Slip op. at 7-11.  The court described it as “black letter law” that an anti-suit injunction was not permissible in this context.  Cf.  Suits to enforce Delaware forum selection clauses.
  • The court distinguished the enforcement of forum selection clauses involving cases in other state courts. See Slip op. at 12.
  • The court explained that the federal court where related litigation is pending is the court that will decide whether the forum selection clause before that court should be enforced, and cited several cases where federal courts have routinely enforced forum selection clauses.  See Slip op. at 13.

This post was prepared by Frank Reynolds, who has been following Delaware corporate law, and writing about it for various legal publications, for over 30 years.

Vice Chancellor Sam Glasscock recently declined to certify a class action challenge to an allegedly unfair side deal in Straight Path Communications Inc.’s 2018 sale to Verizon Communications Inc. until he scrutinizes the use of non-public information in stock trades of Straight Path and its parent by lead plaintiff representative candidates in the matter styled In re Straight Path Communication’s Inc. Consolidated Shareholder Litigation, No. 2017-0486, (Del. Ch. Mar. 11, 2022).

In the five-year-old Delaware Chancery Court litigation, the Vice Chancellor on March 11 rejected a motion to certify a class without a proper class representative.  And he said that determination could not be made without a detailed investigation into whether prospective representative plaintiff mutual fund The Arbitrage Fund had profited by intentionally misusing access to confidential information from the plaintiffs’ law firm.  Meanwhile, the plaintiffs and the court continue to look for a suitable class representative.

The court noted that although class representative qualifications under Chancery Rule 23(a) or (b) include factors of typicality, adequacy, commonality, and numerosity, here, “no motion is pending naming an adequate lead plaintiff.” Therefore, it said, the inquiry must still focus on whether TAF and its affiliates traded on non-public information, as so doing would be “incompatible with the circumspection expected of voluntary fiduciaries, and thus would make TAF an inappropriate lead plaintiff.”

The finest loyalty

That’s important, the Vice Chancellor said, because, “Using non-public information obtained as a fiduciary for personal gain is not consistent with the behavior expected of a self-designated fiduciary.” And as an appointed fiduciary, the representative plaintiff owes the class a “duty of the finest loyalty,”

The decision comes at a pivotal point in the litigation.  In a February 17 opinion, he had denied a defense motion for summary judgment and refused to dismiss Straight Path ex-shareholders’ charges that they were shortchanged by $600 million in the Verizon purchase because insiders at Straight Path and its parent, IDT Corp. likely breached a fiduciary duty by concocting a side deal that wrongly diverted a valuable company asset to themselves.  That brought the plaintiffs a step closer to winning a judgment or settlement—if they could get certified as a class. Straight Path Commc’ns Inc. Consol. S’holder Litig., 2022 WL 484420 (Del. Ch. Feb. 17, 2022).

Vice Chancellor Glasscock, in his March 11 ruling, compared the worthiness of several plaintiffs for the role of class representative and made some important distinctions concerning access to, use of and misuse of confidential information for profit in stock trades in the two companies central to the challenged deals in this litigation.


The Vice Chancellor noted that one investor fund, JDSI LLC, had dropped out of contention for the class representative after discovery revealed that it had, at various times, held short positions in IDT after receiving non-public information, which the court said would be “troubling’’ and “disqualifying if true,” because it is “inconsistent with the actions this Court expects of a volunteer fiduciary.”


He said TAF’s situation regarding improper trading allegations of misuse of confidential info is ”more attenuated” in that while TAF itself did not trade in IDT, it did trade in  Straight Path, and its affiliates traded in IDT and Straight Path.   “But it does not necessarily follow that TAF Affiliates were barred from trading in IDT, depending on their decisionmakers’ access to non-public information,” the Vice Chancellor wrote.  “Again, the pertinent inquiry is not merely whether the TAF Affiliates had direct access to non-public documents; the Court must also consider whether the TAF Affiliates had access to TAF’s counsel such that the TAF Affiliates indirectly could obtain non-public information.”

If TAF still seeks the class representative role an evidentiary hearing to determine whether the TAF Affiliates’ trades were improper will be required, he ruled.

But the Vice Chancellor noted that “written caselaw where the purported representative plaintiff trades in the company that allegedly suffered the injury is comparatively slim and tends toward a sale of shares” but the same general concerns apply, as elucidated by In re Celera Corporation Shareholder Litigation,  in which the sales occurred after “all material information regarding the lawsuit, settlement, and transaction were disclosed to the marketplace.” In re Celera Corp. S’holder Litig., 2012 WL 1020471, at *1 (Del. Ch. Mar. 23, 2012), aff’d in part, rev’d in part on other grounds, 59 A.3d 418 (Del. 2012)

Accordingly, the Celera court certified the representative, although with numerous warnings.

Intervenor-Plaintiff Ardell Howard

The court suggested that an intervenor plaintiff might provide an easier path to a class representative. Ardell Howard was approved as an intervener/additional plaintiff in the case in July 2021 and has expressed an interest in serving as class representative, he said.  The IDT defendants had previously said they would want to conduct some discovery into Howard’s suitability for this position.

Vice Chancellor Glasscock continued the class certification motion with respect to TAF with leave to supplement the record and asked the parties to “confer and inform me as to their preference for moving forward.”

In a recent Delaware Court of Chancery decision that addressed claims of breach of contract and fraud in connection with the sale of a business, the Court announced that Delaware law allows for sandbagging, which can be described as allowing a buyer of a business to sue for breach of a representation made in an agreement for the sale of a business even if the buyer knew that the representation was false–before closing–and when the agreement was signed.

In Arwood v. AW Site Services, LLC, C.A. No. 2019-0904-JRS (Del. Ch. Mar. 9, 2022), while acknowledging that the Delaware Supreme Court has not definitively ruled on this issue, the Court of Chancery expressed confidence in stating that Delaware is a “pro-sandbagging state” for purposes of allowing a buyer to bring claims for breach of contractual representations in an agreement against a seller of a business even if the buyer were aware of the claim prior to closing–and at the time that the buyer signed the agreement of sale.

This decision is consequential and noteworthy for the foregoing highlights alone, but there are also other notable aspects of this 113-page opinion that make it worth reading in its entirety.  For purposes of this short blog post, I will only provide a few bullet points.

Additional Selected Highlights

  • The Court defined sandbagging as referring colloquially to “the practice of asserting a claim based on a representation despite having had reason to suspect it was inaccurate.” See footnote 267 and related text.  The Court also explained sandbagging as “generally understood to mean to misrepresent or conceal one’s true intent, position, or potential in order to take advantage of an opponent.”  See Slip op. at 71.  See also footnotes 270-274 and accompanying text describing the etymology of the word and public policy issues implicated by the Court’s position.
  • The Court also observed that the parties are free to draft contract provisions to avoid sandbagging claims. See footnote 290 and accompanying text.
  • This ruling also instructed that a fraud claim in Delaware is the same as a claim for fraudulent inducement. Slip op. at 50.
  • In this lengthy opinion the Court chronicles in much detail the history of the deal from the first meeting of the buyer and seller through various iterations of the letter of intent, as well as through the extraordinary and unfettered access given to the buyer during the due diligence period (that helped to defeat a fraud claim),  and that may serve as a cautionary tale for drafters of agreements of sale.
  • This decision also features extensive analysis and commentary regarding the competing expert reports on damages, and why the Court relied more on one expert as compared to the other.

The recent Delaware Court of Chancery decision in Krauss v. 180 Life Sciences Corp., C.A. No. 2021-0714-LWW (Del. Ch. Mar. 7, 2022), addressed nuances of advancement law that will be useful to those who labor in the field of corporate litigation dealing with these issues that are crucial to officers and directors.

The key points of law that makes this decision blogworthy are twofold: (i) it serves as a reminder that some compulsory counterclaims may be eligible for advancement; and (ii) it reinforces the longstanding interpretation in Delaware of the phrase that serves as a prerequisite to providing advancement, with an origin in § 145 of the Delaware General Corporation Law, and which was used in the provision of the Bylaws at issue in this case–namely, whether the person seeking advancement was sued “by reason of the fact” that she was an officer.

Advancement has been a frequent topic of commentary on these pages over the last 17 years, and has been the subject of many articles and book chapters published by this writer.


Unlike the corporate charter involved in this case, the advancement provision in the Bylaws of the company involved did not require board approval for advancement to be given for certain types of proceedings.


Perennially, one of the more common defenses to a claim for advancement, and often the least successful argument–as in this case–is whether the prerequisite to the provision for advancement in the Bylaws was triggered to the extent that the litigation for which advancement was sought was prosecuted: “by reason of the fact that . . . [the plaintiff] is or was a director or officer of the company.”  See Slip op at 8-9 and n.32.

As the Court explained, the foregoing phrase is broadly interpreted by Delaware courts, and many published decisions have explained in many different ways why it is very easy to satisfy that condition of advancement, despite may failed attempts by companies to use it as a defense.  See Id. at 9-10.  See also footnotes 32-37.

Also noteworthy in this case is the reminder that the court will not typically make a determination at the advancement stage about an allocation between legal fees that must be advanced–and intertwined claims in the same case that are not subject to advancement.  But rather, the parties should follow the procedure in the Danenberg v. Fitracks  decision to make advancement payments based on the good faith allocation of the parties, and a final allocation will be made at the end of the case.  See Slip op. at 12 and footnotes 44-45.

Another noteworthy aspect of this case is the reminder that compulsory counterclaims are covered by the right to advancement when asserted to defeat or offset an underlying claim that is subject to advancement.  See Slip op. at 20 and footnote 74-81.


A recent Chancery decision provided three reasons why the first-filed rule, sometimes known as the McWane Doctrine, would not be followed, based on the procedural history and facts in the case styled: In re Lordstown Motors Corp. Stockholders Litigation, C.A. No. 2021-1066-LWW (Del. Ch. Mar. 7, 2022). The Court first explained that the McWane Doctrine applies with less force in the context of representative litigation.  The second reason the court provided for why the doctrine will not be followed in this case is that: even though a related federal action was first-filed, and concerns the same business combination–the parties, the claims, and remedy sought in that first-filed case are different.

The third and more important reason that the first-filed rule was not followed in this matter is because, as the court observed:  “This case raises emerging issues of Delaware law” regarding Special Purpose Acquisition Companies (SPACs.)

The Court added that although established doctrines of fiduciary duty law are far from novel, the Delaware Court of Chancery has had occasion to apply those principles in the context of a Special Purpose Acquisition Company [SPAC] and stockholder redemption rights just once (in a decision authored by the same vice chancellor who decided the instant case).

The court concluded that the essential role of the Delaware Court of Chancery in providing guidance in developing areas of Delaware law would be impaired if it were “to denude its jurisdiction because a federal securities action resting on similar facts was filed first.”  Slip op. at 2.

In a short letter ruling, with widespread applicability, the Court of Chancery explained in Paul Elton, LLC v. Rommel Delaware, LLC, et al., C.A. No. 2019-0750-KSJM (Del. Ch. Mar. 16, 2022), that typical indemnification provisions ordinarily:

“are presumed not to require reimbursement for attorneys’ fees incurred as a result of substantive litigation between the parties to the agreement absent a clear and unequivocal articulation of the intent.  This presumption prevents broadly written indemnification provisions, which may be intended only to hold the indemnitee harmless from claims brought by third parties to the contract, from swallowing the American Rule.  Thus, purely contractual indemnification provisions only shift first-party claims if the contract explicitly so provides.”

See Slip op. at 2-3.  See also footnotes 8-10.

A recent Court of Chancery decision underscores the difficulty, at least in Delaware, of attempting to disregard the separate existence of a legal entity, sometimes referred to as “piercing the corporate veil”—though in the case styled  Verdantus Advisors, LLC v. Parker Infrastructure Partners, LLC, C.A. No. 2020-0194-KSJM, Order (Del. Ch. Mar. 2, 2022), the goal was to “pierce the veil” and disregard the separate existence of a limited liability company. (Although this decision was in the form of an Order, as compared to a more formal Opinion, it remains permissible in Delaware to cite in briefs to an Order.)

We have written before about piercing the corporate veil on these pages, and have referred readers to a definitive book on the topic by this blog’s favorite corporate law professor, whose scholarship is cited by the Delaware courts: Prof. Stephen Bainbridge.

Highlights of the more noteworthy aspects of the pithy ruling in this matter include the following:

  • The Court explained that: “Veil piercing is a tough thing to plead and a tougher thing to get, and for good reason.” Order at 4 (citations omitted.)
  • In addition, the Court added that: “Delaware is in the business of forming entities, and so ‘Delaware public policy does not lightly disregard their separate legal existence.'” Id.
  • Five factors considered in determining whether to pierce the corporate veil are: (1) whether the company was adequately capitalized for the undertaking; (2) whether the company was solvent; (3) whether corporate formalities were observed; (4) whether the dominant shareholder siphoned company funds; and (5) whether, in general, the company simply functioned as a facade for the dominant shareholder.” Id. at 5. (citations omitted.) See n.14 (citing cases for the position that no single factor will suffice; and in order to apply the alter ego theory, the entity must “exist for no other purposes than as a vehicle for fraud.”)
  • Notably, the Court observed that most single-member LLCs don’t follow many formalities for the good reason that there are “few statutorily mandated formalities imposed on those entities.” Order at 5.
  • In conclusion, the Court noted that, in light of its reasoning and holding, it need not address the argument made that veil-piercing theories should be unavailable or extraordinarily limited in the alternative entity context. n.18.

This post was prepared by Frank Reynolds, who has been following Delaware corporate law, and writing about it for various legal publications, for over 30 years.

Vice Chancellor Joseph Slights recently ruled that Zhongpin Inc. shareholders have no standing to sue the food processors’ D&O insurer directly to collect a $41.3 million default judgement they won in their underlying Chancery Court challenge to Zhongpin’s allegedly unfairly-priced buyout in Rodriguez, et al. v. Great American Insurance Co., No. N21C-11—051-JRS opinion (Del. Super. Feb. 23, 2022).

In a February 23 opinion, the Vice Chancellor granted the Great American Insurance Company’s motion to dismiss the shareholder plaintiffs’ suit from the Delaware Superior Court, where he had transferred the D&O insurance dispute from the Chancery Court to assure proper jurisdiction on a question of law.  He also decided the case when it arrived in the Delaware Superior Court after being specially appointed as a Superior Court Judge for this case only.  He found that the shareholders lacked standing to sue under either common law or the terms of the D&O policy, noting that:

Under common law an injured third party may not bring a direct claim against a tortfeasor’s insurer unless there is an express assignment

Under the policy’s “No Action Clause” the insured Zhongpin’s controller and directors and officers failed to defend the underlying Chancery Court suit and have no basis to invoke subrogation, so coverage could not be available under any circumstances.

Considering the number of Delaware companies with parent corporations whose controllers, officers, directors and assets are in China, the decision is important because it appears to close the only door to recovery by shareholders who have won judgments in stock deals by allegedly faithless fiduciaries who have abandoned the litigation and fled to a nation that has a record of making it difficult to locate or serve defendants.


The litigation sprang from a 2012 squeeze-out of Zhongpin investors by Xianfu Zhu, the company’s de facto controlling stockholder.  Zhu caused Zhongpin to enter a transaction with two of his wholly owned entities whereby the minority stockholders of Zhongpin were cashed out for inadequate consideration. That transaction prompted breach-of-duty claims against the Class Action Defendants that resulted in a default judgment after Zhu and his directors and officers stopped paying their defense firm, failed to hire a replacement, stopped defending the action and “disappeared” in China, the court said.

The insurance action

Following the default judgment, the plaintiff shareholders tried to collect from the D&O insurer on behalf of the company because it came in a derivative action and because Zhu, the directors and officers and company and its assets were in China and allegedly could not be located, let alone reached.

Vice Chancellor Slights decided that “this is fundamentally a breach of contract action for money damages, which is the traditional province of the Superior Court.”  Transfer to Superior Court will not involve delay while another judge is forced to become familiar with a complex case, he said, because the insurance action is separate and new, and plays to the experience and strength of the Superior Court. Rodriguez, et al. v. Great American Insurance Co., No. 2020-0387-JRS letter opinion issued (Del. Ch. Oct. 20, 2021).  (Notably, the Vice Chancellor, in the past, spent many years as a Superior Court Judge before being appointed to the Court of Chancery.)

The Superior Court opinion

In his February 23 Superior Court opinion on a renewed motion to dismiss, the Vice Chancellor  noted that as of that date, plaintiffs have been unable to locate—much less execute  the default judgment on any defendants “presumably because they all reside in China.”

No standing

He said in cases such as this the issue of standing is so closely related to the merits, a motion to dismiss is considered under Rule 12(b)(6) rather than Rule 12(b)(1).  The Vice Chancellor noted three theories of standing where the third party:

  1. Has received a valid assignment of the claim from the inured,
  2. Is an intended third-party beneficiary of the insurance contract, or
  3. Qualifies for subrogation

There is no valid assignment of standing, he said.

As to third-party beneficiary standing, the Vice Chancellor ruled that “If the third party either accidentally or indirectly benefits from the promise, then the third party is deemed as incidental beneficiary and has no right to enforce the contract” and the Zhongpin insureds certainly never intended coverage to benefit the stockholder claimants.

As to subrogation standing, he said neither statutory nor equitable subrogation is available.

Finally, the fact that the Zhongpin insureds “failed to pay their lawyers…and then disappeared,” and when notified of plaintiffs’ intent to seek a default judgment in the underlying merger challenge, “they sat silent and, by their silence, acknowledged liability,” the court said.

“The insureds disappeared, leaving GAIC to hold the bag…a material breach of the of the GAIC policy,” the Vice Chancellor said in dismissing the coverage action.

A majority of the Delaware Supreme Court recently ruled that a settlement agreement contained an enforceable obligation to negotiate in good faith with the goal of reaching a separate definitive contract within the parameters outlined in the settlement agreement–although the court recognized that such a contractual obligation did not assume that a definitive agreement would necessarily be reached.

In Cox Communications, Inc. v. T-Mobile, Inc., Del. Supr., No. 340, 2021 (March 3, 2022), Delaware’s High Court explained both basic principles and sophisticated nuances of Delaware contract law that should be required reading for anyone who needs the know the latest iteration of Delaware law on this topic, especially in the context of preliminary or transitional agreements that contemplate a more comprehensive second-stage agreement.

Why This Decision Is Noteworthy:

A common situation where familiarity with this decision will be required is when a lawsuit is settled after a long day of mediation and basic terms are signed while all the parties are present, or otherwise available, to confirm the terms of a settlement–but a more complete, formal agreement is contemplated. One lesson that this decision teaches is to make certain that the abbreviated memorialization of essential terms is expressly stated to be enforceable, in the event a more formal, comprehensive agreement is never finalized. This, of course, applies beyond settlement agreements–for example, in the context of any deal where essential terms are agreed upon before a more comprehensive, formal agreement is completed (assuming the parties may want to enforce those essential terms, which may not always be the case.)

Key issue:

The expedited appeal in this case turned on the interpretation of a single provision in a settlement agreement and whether it should be construed as either: (i) an unenforceable “agreement to agree”, or (ii) an enforceable “Type II preliminary agreement” requiring the parties to negotiate in good faith.

Basic Background Facts

Cox and Sprint signed a settlement agreement in 2017 that resolved litigation between the parties. T-Mobile later purchased Sprint. Section 9(e) of that settlement agreement contained a sentence that was the crux of the dispute over contract interpretation that the Court decided. The disputed provision provided that:

Before Cox or one of its Affiliates (the “Cox Wireless Affiliate”), begins providing Wireless Mobile Service (as defined below), the Cox Wireless Affiliate will enter into a definitive MVNO agreement with a Sprint Affiliate (the “Sprint MVNO Affiliate”) identifying the Sprint MVNO Affiliate as a “Preferred Provider” of the Wireless Mobile Service for the Cox Wireless Affiliate, on terms to be mutually agreed upon between the parties for an initial period of 36 months (the “Initial Term”).

T-Mobile, as the successor to Sprint’s rights in the settlement agreement, argued that the above language required Cox to enter into an agreement with it for a term of 36 months before it could provide wireless services with any other carrier. On the other hand, Cox read the above provision to merely require it to negotiate in good faith to “try” to reach an agreement. The Court of Chancery agreed with T-Mobile’s view of the provision. The Supreme Court did not.

Basic Principles and Nuances of Delaware Contract Law Underscored

  • Delaware adheres to an objective theory of contracts. See footnotes 47-48.
  • Extrinsic evidence is only considered if the text is ambiguous. n.49.
  • A contract provision is “not rendered ambiguous simply because the parties in litigation differ as to the proper interpretation.” n.51.
  • When a provision “leaves material terms open to future negotiations” as the High Court found Section 9(e) did, it is “a paradigmatic Type II agreement” of the kind we recognized in SIGA v. PharmAthene. n.52. (That Supreme Court decision and related decisions were highlighted on these pages.)
  • Unlike the old, superseded view that an incomplete agreement was not enforceable, Delaware recognizes that “parties may make an agreement to make a contract…if the agreement specifies all the material and essential terms including those to be incorporated in the future contracts.” n.53.
  • Delaware recognizes two types of enforceable preliminary agreements: Type I and Type II.
  • Type I agreements reflect a “consensus on all the points that require negotiation” but indicate the mutual desire to memorialize the pact in a more formal document. n.55. Type I agreements are fully binding.
  • Type II agreements exist when the parties “agree on certain major terms, but leave other terms open for future negotiation.” n.56 Type II agreements “do not commit the parties to their ultimate contractual objective but rather to the obligation to negotiate the open issues in good faith.” n.57.

Selected Excerpts of Court’s Reasoning

  • The Supreme Court read Section 9(e) to leave open a number of essential terms, such as price, which barred it from being categorized as a Type I agreement. n.60. That is, it specifically contemplates a future “definitive” agreement and provides that open terms will be “mutually agreed upon between the parties”–though it is not completely open-ended. Practice note:  If the parties want a settlement agreement to be a Type I binding agreement–as compared to an agreement to negotiate in good faith–a fair observation based on the Court’s decision in this case is to avoid the reference to a future “definitive” agreement, and make sure to include essential terms such as price.
  • Type II agreements do not guarantee the parties will reach agreement on a final contract because “good faith differences in the negotiation of the open issues may preclude final agreement.” n.63
  • The provision at issue in this case did not include a promise to do anything other than negotiate in good faith–which is where the Supreme Court parted ways with the Court of Chancery’s post-trial ruling. See also n.71 ( explanation of why the majority  parted ways with the dissenting justices in this case, and did not think it was necessary to address extrinsic evidence.)
  • The Court’s reasoning including diagramming of the sentence in the disputed provision to parse the syntax and structure of the language at issue, by identifying the single subject, single verb, and singled object–as well as which clause modified the predicate and which clause modified the object.
  • The quality or quantify of consideration in a contract should not be second-guessed. n.86. Moreover: “obligations to negotiate in good faith” are recognized in Delaware as “not worthless”. n.81.

Postscript: A candid observation that reasonable people can differ on these contract issues is buttressed by the fact that the brightest legal minds in Delaware who decide what the law is in Delaware were not unanimous in their view of the law as applied to the facts of this case. That is, three members of the Delaware Supreme Court saw it one way, two members of that High Court saw it another way, and a member of the Court of Chancery arguably viewed the law as applied to the facts of this case in a third way.