Search results for: SB 21

This post is by Aimee M. Czachorowski, a partner in the Delaware office of Lewis Brisbois Bisgaard & Smith LLP.

In Altigen Communications, Inc. v. Day, C.A. No. 2025-1298-JTL (Del. Ch., August 21, 2026), the Court of Chancery provided an in-depth explanation of the basis for imposing personal jurisdiction pursuant to the Delaware Corporate Officer-Consent Statute, 10 Del C.  § 3114(b), compared to the LLC Act under 6 Del. C. § 18-109. In noting the difference between the two statutes, the Court, sua sponte, directed the parties to address the precedent concerning de facto officer status under Section 3114(b) as discussed in Harris v. Harris, 289 A.3d 310 (Del. Ch. 2023).

Ultimately, the Court determined that the plaintiff failed to establish personal jurisdiction over the corporate officer under the Delaware Officer Consent Statute, 10 Del. C.  § 3114(b), because the title of “Chief Strategy Officer” was neither listed as a type of officer over which personal jurisdiction is conferred under §3114(b), nor was there any evidence that the activities performed by the Chief Strategy Officer made him a de facto officer.

The scholarly analysis includes the history and reasoning behind the expansion of Section 3114, compared to the LLC context, and every Chancery practitioner should be familiar with this decision.

Rae Ra, a corporate and commercial litigation associate in the Delaware office of Lewis Brisbois, prepared this synopsis.


The Court of Chancery analyzed the newly amended 8 Del. C. § 144(d)(2) for the first time recently, in Patrick Ayers v. Foley, et al., C.A. No. 2025-0650-LWW (Del. Ch. June 15, 2026) (the “Opinion”), and held that the recent statutory amendments to Section 144 heighten the presumption of independence for certain directors beyond Section 144’s safe harbor provisions, “including when assessing director disinterestedness for purposes of Rule 23.1.” Opinion at 26-27.

In short, when a director is not a party to the challenged transaction and is deemed independent by the national exchange’s standards, for the purposes of a Rule 23.1 analysis, the statute raises the burden for a plaintiff to plead both substantial and particularized facts, and we focus on this narrow portion of the Opinion below. 

Background

In this derivative action, plaintiff challenged the board’s actions with regard to 1) a one-time equity grant to Foley, the company’s founder (the “Equity Grant”), and 2) compensation the non-employee directors awarded themselves (the “NED Compensation”).

Because this was a derivative suit where the plaintiff did not make a demand, the demand futility requirement of Rule 23.1 applied. And because the directors who approved the Equity Grant were deemed to satisfy the national stock exchange independence standards, the newly enacted Section 144(d)(2) applied, under which a plaintiff can rebut the presumption of disinterestedness with “substantial and particularized facts that such director has a material interest in such act or transaction or has a material relationship with a person with a material interest in such act or transaction.” 8 Del. C. § 144(d)(2).

Analysis

After explaining that the Equity Grant and the NED Compensation were separate transactions that each warranted separate analysis, see generally Opinion at 16-22, the Court began its application of the Zuckerberg test to the Equity Grant to assess demand futility. (Note: The defendants did not contest demand futility for the NED Compensation. See id. at 21-22.)

Under Zuckerberg prong three, the Court analyzed the independence of the three of the five challenged directors who qualified as independent under NYSE rules. Id. at 23.  The Court held that Section 144(d)(2) “is not confined to the safe harbors in Sections 144(a), (b), and (c)[,]” id. at 25, and ultimately, the plaintiff here failed to meet “this exacting standard” for pleading both substantial and particularized facts. Id. at 30.

  • Applying the principles of statutory interpretation, the Court held that Section 144(d)(2)’s “purposeful omission” of limiting language to within Section 144, id. at 26, as well as the statutory mandate for not only particularized but also “substantial” facts, id. at 27, demonstrated the legislature’s intent to strengthen the presumption of impartiality of directors beyond the Rule 23.1 standard.
  • Under this analytical framework, the plaintiff’s assertions–that the three challenged directors had business ties with Foley, received fees for their board service over the last decade, and engaged in co-investments–did not pass muster. Id. at 30-31. The “substantial” has to be understood in the “qualitative sense”, and the plaintiff “must plead specific, non-conclusory facts of sufficient qualitative significance to support a reasonable inference of a material interest or relationship that would impar the director’s objective judgment.” Id. at 28-29.

This opinion thus presents an important clarification of a recently amended Delaware corporate statutory provision and provides a lesson on the heightened burden of pleading standards to challenge the independence of certain directors.

Our new podcast series by Wilmington Managing Partner Francis G.X. Pileggi, Esq. and Partner Chauna Abner, offers practical insights on fiduciary duties, shareholder disputes, corporate governance issues, and other high-stakes business litigation matters arising in the State of Delaware and beyond.

In our inaugural episode, Francis and Chauna welcome veteran trial lawyer Jonathan Blank of McGuireWoods LLP to the show for a discussion on what every non-Delaware attorney needs to know about litigating in the Delaware Court of Chancery. From the unique role of Delaware counsel to the importance of collaboration in high-stakes corporate disputes, this episode offers practical insights from lawyers who have navigated some of the nation’s most complex corporate and commercial litigation.

Listen to the full episode on Spotify here: No Such Thing as “Local Counsel” in Delaware Court of Chancery (feat. Jonathan Blank from McGuireWoods) – Delaware Corporate Litigation Insights: A Lewis Brisbois Podcast | Podcast on Spotify

The idea for this topic came from an article we wrote on these pages with a similar title that compiled court decisions and commentary on the topic.

This post was prepared by Rae Ra, a corporate and commercial litigation associate in the Delaware office of Lewis Brisbois.

In William J. Brown v. Matterport, Inc., et al., C.A. No. 2021-0595-LWW (Del. Ch. June 1, 2026) (“Letter Decision”), the Court of Chancery addressed on remand the limited issue of determining post-judgment interest in an action.

Plaintiff argued that, under 6 Del. C. § 2301, a fixed rate of 10.50% was “mandated,” while Defendants argued that a fixed 5.25%, the same interest as the pre-judgment rate, was appropriate to prevent a windfall to the plaintiff. Letter Decision, at 2.

The Court rejected both values, and instead held that “[a]pplying a floating rate compounded quarterly appropriately accounts for the economic realities and significant fluctuations in interest rates[.]” Id. at 3.  Clarifying that the “statutory legal rate serves as a benchmark, not an inflexible rule,” id. at 2, the Court explained that a “fixed 10.50% rate would create an inequitable windfall for [Plaintiff]” while a “fixed 5.25% rate would not fully compensate [Plaintiff]” for his losses.  Id. at 2-3.

The takeaway here is that the Court of Chancery is not statutorily limited from exercising in its discretion to determine an appropriate interest rate.  Here, the Court did just that, with mindfulness toward both equitable and practical concerns.

This post was written by Chauna Abner, a corporate and commercial litigation partner at Lewis Brisbois.

The Delaware Court of Chancery recently dismissed a lawsuit by a Delaware corporation against its founder, former CEO, and former director that sought to invalidate the applicable employment agreement after the court found that the agreement’s forum selection clause required the action to be brought in California. See Masimo Corp. v. Kiani, C.A. No. 2024-1086-NAC (Del. Ch. Apr. 21, 2026); Cf. Mawson Infrastructure Grp., Inc. v. Mewawalla, C.A. No. 2025-0789-JTL, Transcript (Del. Ch. Feb. 13, 2026)(granting a motion to dismiss breach of fiduciary duty claims brought in Delaware against a former director and employee based on a Washington forum selection clause in an employment agreement between the parties, although the plaintiff’s claims were not asserted based on that agreement).

Key Facts

Masimo, a Delaware corporation, sued Joe Kiani in Delaware seeking to invalidate its employment agreement with Kiani based on alleged breaches of fiduciary duties by Kiani. The agreement provided that upon a “Qualifying Termination,” Kiani would receive a certain severance payment, any unvested stock options, and a certain “Special Payment” of restricted share units plus $35 million. The agreement defined “Qualifying Termination” as termination for “Good Reason.” In addition, the employment agreement contained a forum selection clause requiring any suit “arising out of or relating to” the agreement to be brought in California Superior Court, Orange County.

 After Masimo’s stockholders voted to remove Kiani from the Board of Directors, Kiani resigned as CEO stating that he did so for “Good Reason.” Kiana subsequently filed suit against Masimo in California seeking declarations that he resigned for Good Reason and is entitled to severance and the Special Payment.  

Masimo subsequently filed the instant action in Delaware seeking declarations invalidating the agreement’s provisions, invalidating the Special Payment, declaring waste, and alleging fiduciary breaches. Kiani moved to dismiss under Rule 12(b)(3), arguing that the agreement’s forum selection clause required that the litigation proceed in California.

Holding & Reasoning

          The Court of Chancery agreed and granted Kiani’s motion to dismiss, enforcing the agreement’s California forum selection clause. The Court held that Masimo’s claims “arise out of or relate to” the agreement and, therefore, must be litigated in California.

The Court reasoned that DGCL § 122(18) authorizes stockholder agreements to select non‑Delaware fora for internal affairs claims, notwithstanding § 141(a) and  excluding § 115, and that Section 122(18), effective August 1, 2024, abrogated the prior Independent‑Source Principle for stockholder agreements, such that fiduciary claims can be routed by contract. The Court found that the agreement qualified at least in part as a § 122(18) stockholder governance agreement, and was not solely an employment contract under DGCL § 122(5), since the agreement included matters of governance. Specifically, the agreement materially allocated governance power, including change‑in‑control triggers, supermajority for‑cause removal, and Chairman/lead‑director provisions.

          The Court further explained that under both California and Delaware law, “arising out of or relating to” is construed broadly, and found that Masimo conceded its claims would not exist absent the agreement. Accordingly, the Court concluded that the agreement’s forum selection clause compelled litigating Masimo’s claims against Kiani in California.

Practical Takeaways

  • Pursuant to DGCL § 122(18),  corporations can validly route internal affairs disputes to non‑Delaware fora, including through employment‑style agreements with controllers.
  • Agreements with governance features tied to board composition or control may be treated as DGCL§ 122(18) governance agreements even if styled as employment contracts.
  • Broad “arising out of or relating to” forum clauses will capture fiduciary duty and waste claims closely related to the agreement.

This article was prepared by Keith Walter, a partner in the Delaware office of Lewis Brisbois.

In Ghatty v. Mudili, C.A. No. 2025-0615-LLW (Del. Ch. Oct. 21, 2025), the Court of Chancery addressed a § 225 dispute over the removal of two corporate directors of a private Delaware corporation. The plaintiffs—three directors constituting a majority of the company’s five-member board—purported to remove the two defendant directors from their officer positions at a board meeting. The defendants challenged the propriety of their removal. Although the notice of the meeting complied with the company’s bylaws, the Court held that it was inequitable and therefore improper.

Key Facts

One of the plaintiffs, acting in his capacity as president, called the company’s first in-person board meeting in its three-year history, providing approximately one month’s notice.  The notice included a detailed agenda addressing governance and financial issues. The agenda did not disclose that the board would consider removing the defendant directors from their officer roles. To the contrary, one agenda item proposed “recognition and role expansion” for one of the defendants.

Shortly before the meeting, relations among the directors deteriorated. The defendant directors advised that they would be unable to attend the meeting due to “tight schedules.”  Although the president offered to provide a virtual attendance option and to schedule an additional meeting at a later date, the majority directors proceeded with the meeting and voted to remove the defendants as officers.

Court’s Analysis

The Court first analyzed whether the meeting was a regular or special board meeting under the company’s bylaws. Applying settled principles that corporate bylaws are contracts interpreted according to their plain meaning, the Court held that the meeting was a special meeting because it was not held pursuant to any standing schedule, was called by the president, and was the first board meeting in the company’s existence.

The Court next considered whether the special meeting complied with the bylaws’ notice requirements. The bylaws permitted the president to call a special meeting on three days’ notice by electronic transmission, and they did not require that the purpose of a special board meeting be stated. In addition, the bylaws authorized the board to remove officers “at any time” by majority vote and imposed no special notice requirement for officer removals.  Accordingly, the Court concluded that the notice technically complied with the bylaws.

Technical compliance, however, did not end the Court’s inquiry. The Court held that the notice was inequitable, describing it as a “bait-and-switch” that concealed the plaintiffs’ true intention to remove the defendants from office. The Court framed the dispositive issue as “whether all directors are entitled to fair and non-misleading notice of the agenda for a special meeting.”

Citing Delaware Supreme Court precedent, the Court emphasized that Delaware law values “the collaboration that comes when the entire board deliberates on corporate action and when all directors are fairly accorded material information.” It does not endorse board factions developing “Pearl Harbor-like plans,” or engaging in “intentional duplicity,” “sandbag[ging],” or “trickery” toward fellow directors. The inequity was particularly pronounced because the agenda affirmatively suggested an expanded role for one defendant while omitting any reference to his impending removal.

The Court also rejected the plaintiffs’ argument that notice was unnecessary because the removed directors lacked sufficient voting power to block the action. The Court held that “all directors are entitled to ‘equal treatment’ and ‘fair notice’ regardless of their stock ownership and voting power,” because fair notice promotes a genuine deliberative process.

Because the notice for the board meeting was inequitable, the Court held the defendants remained officers of the company.

Takeaway

This decision reinforces that equity polices boardroom conduct even where bylaws are formally satisfied. Delaware courts will not permit directors to use misleading agendas or omissions to ambush fellow board members on matters of fundamental importance, such as officer removals. Fair and non-misleading notice is required not because dissenting directors can block the action, but because Delaware law values informed deliberation, collegial governance, and equal treatment at the board level.

This article was written by Rae Ra, a corporate litigation associate in the Delaware office of Lewis Brisbois.

In Vejseli v. Duffy, 2025 WL 1452842 (Del. Ch. May 21, 2025), the Court of Chancery held that Ionic’s directors breached their fiduciary duties by adopting a board reduction resolution in the face of a proxy contest, where they failed to prove the resolution was for a “valid, non-pretextual corporate purpose or that the [resolution was] reasonable and not preclusive.” The trial evidence “overwhelmingly” supported a finding that the resolution was not adopted on a “clear day,” and the Court noted that the lack of any record supporting the Ionic directors’ justifications for the resolution “raise[d] eyebrows.”

At the same time, the Court also found that the Ionic Board’s rejection of the plaintiffs’ nomination notice for failure to abide by the advance notice bylaw was proper “to advance a legitimate corporate purpose” and was not inequitable.

Under “the unusual facts of this case,” the Court ordered an injunction whereby the Board would re-open the ten-day nomination window under the advanced notice bylaw to allow for submissions of director nominations. Rejecting the argument that the injunction would serve as a “do-over” for plaintiffs who failed to comply with the advanced notice bylaw, the Court observed that here, it was the “Board’s wrongful conduct” that required the injunction. Balancing the equities, the Court held that an injunction was proper to allow Ionic stockholders to exercise their “sacrosanct” voting rights.

This post was prepared by Aimee Czachorowski, an attorney in the Delaware office of Lewis Brisbois.

Specific costs recoverable by a prevailing party is an oft-asked question in the Delaware courts. The Superior Court’s Complex Commercial Litigation Division recently addressed what expert fees and trial technology costs can be recovered by the prevailing party in NewWave Telecom and Technologies, Inc. v. Ze Jiang, et al., C.A. No. N-20C-09-215 VLM CCLD (Del. Super., Oct. 24, 2024).

Although the Court discussed an award of attorneys’ fees pursuant to the applicable SPA, the Court’s discussion of allowable costs is of more widespread interest to practitioners. The Court indicated that expert witness fees were recoverable, but only for the portion of the expert’s time that was “necessarily spent in attendance upon the court for the purpose of testifying.” Slip op. at 9.

The Court also explained that: Time spent by the expert traveling to and from the courthouse, and time spent waiting to be called to the witness stand was recoverable. The Court also addressed what trial technology support costs could be recoverable.

Specifically, the Court allowed for: 1) Travel, lodging, and meals incurred while the expert was waiting to be called to testify (even while waiting to be called in rebuttal); 2) Time the expert actually spent waiting upon the Court—defined to mean the actual trial time plus an hour for travel to and from the courthouse; and 3) trial technology support for the actual trial time, not including preparation time.

Rolando Diaz of the Lewis Brisbois Delaware office prepared this post.

          The Court of Chancery refused to enforce a restrictive covenant in Sunder Energy, LLC v. Jackson, 2023 Del. Ch. LEXIS 580 (Del. Ch. Nov. 22, 2023). Chancery subsequently approved, with thorough reasoning, an interlocutory appeal to the Supreme Court–which makes its own determination whether to accept the interlocutory appeal.

BRIEF FACTUAL BACKGROUND

          Sunder Energy, LLC (“Sunder”), a Delaware LLC headquartered in the State of Utah, a purveyor of residential solar power systems, had an exclusive dealer agreement with Freedom Forever LLC (“Freedom”), one of the nation’s largest installers. In the summer of 2023, Freedom encouraged Tyler Jackson, the head of sales for Sunder, who lived and worked in the State of Texas, to join Solar Pros LLC (“Solar Pros”), another solar power system dealer that referred installations to Freedom.  This led to a mass exodus of Sunder’s workforce. Nine of the twelve regional managers that reported to Jackson, as well as over three hundred sales personnel, joined Solar Pros.  On September 25, 2023, Solar Pros announced that Jackson had joined as its new President.

          Sunder asserted that Jackson—as a holder of Incentive Units—was bound by certain restrictive covenants (the “Covenants”) provided for in Sunder’s 2019 and 2021 LLC operating agreements (the “OA”) that applied to any Incentive Unit holder (the “Holder”).  The co-founders formed Sunder by filing a certificate of formation with the Delaware Secretary of State but did not execute a written operating agreement. 

In the fall of 2019, the two co-founders that together owned 60% of the membership interest of Sunder engaged a law firm to draft an LLC agreement that dramatically changed the ownership structure of the LLC; it imposed the Covenants, emasculated the minority members rights as owners, and reduced them to purely economic beneficiaries with very little rights. Communications from the majority co-founders to the minority rights holders did not explain that the two co-founders received common units with full rights while the minority holders received incentive units with little to no ownership rights. 

In a concerted effort to obfuscate reality, the majority co-founders referred to the Holders as “partners,” implying that there was some semblance of equal footing aside from the difference in percentage of interests. For the subsequent adoption of the 2021 operating agreement, the majority co-founders did not even bother to circulate a copy of the new operating agreement.  Instead they only circulated the signature page and indicated to the Holders that there were no substantive changes to the operating agreement and that the only change was the addition of a member.  This was not true.  The geographical scope of the restrictive covenant was also expanded.

          In addition to broad restriction on the use of Sunder’s confidential information, the Covenants in the OA prohibited a Holder from: (i) engaging in any competitive activity (the “Non-Compete”); (ii) soliciting Sunder’s employees and independent contractors (the “Worker Non-Solicit”); (iii) soliciting, selling to, accepting any business from, or engaging in any business relationship with any of Sunder’s customers; and (iv) inducing, influencing, advising, or encouraging any Sunder stakeholder to terminate its relationship with Sunder. Furthermore, each Covenant bound not only the Holder, but also Holder’s affiliates, defined in the OA as a Holder’s spouse, parents, siblings, and descendants, both natural and adopted. The Covenants applied while a person held incentive units and for two years thereafter.  However, a Holder had no right to transfer or divest themselves of the Incentive Units. In contrast, Sunder had the option, but not the obligation, to repurchase the Incentive Units for zero dollars upon either Sunder’s termination of Holder’s employment or if the Holder left the company without good reason.

          On September 29, 2023, Sunder terminated the dealer-installation agreement with Freedom and filed an arbitration to enforce their rights against Freedom. Sunder also filed an action in the Court of Chancery against Jackson and its competitors. Sunder sought a preliminary injunction enjoining Jackson and any party acting in concert with Jackson from taking any action in breach of the Covenants. The Court denied the preliminary injunction because Sunder could not establish a reasonable likelihood of success on the merits.  The Court found (i) the restrictive covenants unenforceable under general principles of law and (ii) the competition and solicitation restrictive covenants unreasonable in their scope and effect.

KEY ANALYSIS

          First, the Court was faced with determining the Covenants’ governing law. The terms of the Covenants appeared in the OA, which governs the internal affairs of a Delaware LLC.  The OA expressly provided that Delaware law governed its terms.  Thus, a contractarian basis for the application of Delaware law existed. Under normal circumstances, the combination of the internal affairs doctrine and contract principles would require the application of Delaware law. However, for the Covenants, the drafters were not attempting to govern the internal affairs of a Delaware LLC.  Instead, the drafters were attempting to govern an employment relationship.  The Court opined:

Delaware follows the Restatement (Second) of Conflict of Laws, and Delaware courts consequently will not enforce choice of law provisions when doing so would circumvent the public policy of another state that has a greater interest in the subject matter. Consequently, when a different state’s law would govern in the absence of a choice of law provision, and if that state has established legal rules reflecting a different policy toward restrictive covenants, than Delaware’s then this court will defer to that state’s laws notwithstanding the presence of a Delaware choice of law provision.

Thus, either Utah, where Sunder is headquartered, or Texas, where Jackson worked and resided would apply in the absence of a choice of a law provision.  Under the Court’s analysis, both Texas and Utah approach the enforceability of restrictive covenants only slightly differently than Delaware. Under its conflict of laws analysis, due to the low degree of divergence between laws of the relevant forums, the Court applied Delaware law, finding that the conflict between Delaware and Utah law was a false conflict.

          Second, due to the circumstances for ratification of Sunder’s 2019 and 2021 LLC operating agreements, the Court determined that Sunder’s purported majority co-founders breached their fiduciary duty by failing to fully disclose all material information and making misleading partial disclosures to the minority.  The 2019 agreement materially and adversely impacted the rights of Sunder’s minority members; legal counsel only represented Sunder and the majority co-founders, but the co-founders made it seem as if counsel represented everyone. For the 2021 agreement, the co-founders told the minority members that the 2021 agreement contained no material changes and did not even bother to circulate a copy of the 2021 agreement to the minority members. Thus, the Court determined that due to the co-founders’ breach of fiduciary duties, the amended operating agreements themselves were invalid, and consequently, so were the restrictive covenants therein.

          Assuming, however, for the “sake of argument” that the amended LLC agreements were valid, the Court addressed the enforceability of two of the Covenants, namely, the Non-Compete and Worker Non-Solicit provisions. The Court found the Non-Compete provision extremely overbroad. The prohibited business activity covered a wide swath of the “door to door sales industry, without regard to whether Sunder markets or sells similar products.” The restriction on a Holder’s affiliates (as defined in the OA) was inane; it was not written in a manner that simply thwarts a straw man conferring the benefits to a Holder.  But, as written, a Holder’s “daughter cannot go door to door selling girl scout cookies.” Absurdly, the Covenants thus purported to bind a Holder’s wife and children. The geographic scope of the Non-Compete left only Alaska, Montana, North Dakota, and South Dakota available for a Holder as territory not restricted by the Covenants. Perhaps the most appalling factor of the Non-Compete was that since a Holder had no right to divest himself of the Incentive Units under the OA, the temporal component could continue in perpetuity. Similarly, the Court found the Worker Non-Solicit overbroad and unreasonable. It also applied to the same set of affiliates and for the same potentially “forever” time period. It extended not only to any current Sunder employee or independent contractor, but also applied to “any person employed in the past by Sunder for any period of time.” Individually, each overbroad provision was unreasonable.  And read together, the Court deemed the Covenants oppressive and refused to enforce them.

PRACTICAL TAKEAWAYS

          Delaware courts will not apply Delaware law under a theory of contract law if another state has a greater public policy interest in an issue when, absent a choice of law provision, another forum’s laws would apply. Circumstances may also dictate abandonment of the internal affairs doctrine when drafters embed employment provisions that have nothing to do with the governance of the entity into a governing agreement. Additionally, Delaware courts apply both general principles of law and a holistic analysis of restrictive covenants to determine reasonableness. This analysis can result in Delaware courts refusing to enforce restrictive covenants.

My latest column on legal ethics for the flagship publication of the American Inns of Court, The Bencher, addresses the titular topic. During the more than 25 years that I have penned the legal ethics column, this topic may be among the most challenging. That is, do the rules of legal ethics provide any guidance on how, if at all, to respond when one is falsely accused–especially of despicable acts or statements.

Courtesy of The Bencher, my latest article is reprinted below.

Do Legal Ethics Rules Provide Guidance for Responding to False Accusations?

The Bencher | September/October 2023

By Francis G.X. Pileggi, Esquire

During the 25 years or so that I have written this ethics column, the titular topic may be the most challenging among those I have addressed. If one is falsely accused of some despicable act, with no details and no opportunity to confront the unnamed accuser, do the rules of professional responsibility suggest how a lawyer should reply? Let’s be more specific.

What if an anonymous and amorphous accusation of racist behavior, without details of specific words used or other details, is recklessly repeated without an opportunity for the accused person to confront the accuser or rebut unspecified facts? How should the ethical lawyer respond? Most lawyers, and most reasonable people, would expect that such a serious false accusation, or repeating such a false accusation, should surely be actionable in some manner.

Those who weaponize the accusation of racism for improper motives continue to make it harder for those who seek to eradicate racism where it truly exists.

Those who believe in the approach of an “eye for an eye” may seek retribution. Adherents of Stoicism might counsel a “grin and bear it” approach. Christians may counsel a “turn the other cheek” response. Others may rely on karma.

Delaware Cases

Relatedly, a Delaware Supreme Court decision found that a defamation claim based on a member of the legal profession falsely accusing a lawyer of being a racist was barred by the First Amendment guarantees of free speech and observed that “it is clear to us that Americans disagree about a long and growing list of things that to some are racist and to others are not.” Cousins v. Goodier, Del. Supr., No. 272, 2021, Slip op. at 28 (Aug. 16, 2022).

Delaware’s High Court referred to the evolving definition of racism and cited to the recently updated definition of the word in a leading dictionary that now includes systemic racism, id. at n. 103, while also noting that the term “racist” has been used so variously as to have been “drain[ed]…of its former, decidedly opprobrious meaning” and to now “fit comfortably within the immunity for name-calling.” Id. at n.104 (quoting Stevens v. Tillman, 855 F.2d 394, 402 (7th Cir. 1988)).

When an accusation is made by an unidentified person, options may be limited. In 2005, the Delaware Supreme Court reasoned in Doe v. Cahill that only in certain circumstances can one force the disclosure of the identity of an anonymous online accuser.

An activist affiliated with Harvard Law School has described Christianity as a religion guilty of systemic racism, just as many have described our criminal justice system. So what do those charges mean for Christians or those who play key roles in the criminal justice system?

ABA Opinion

The American Bar Association (ABA) Model Rules of Professional Conduct do not provide clear direction on the titular issue. In 2021, the ABA issued a formal opinion on the related topic of whether, and how, to respond to online criticism. See Standing Committee on Ethics and Professional Responsibility, Formal Opinion 496 “Responding to Online Criticism,” American Bar Association (Jan. 13, 2021).

This opinion speaks directly to lawyers faced with online attacks. The opinion focuses on the Model Rules of Professional Conduct that advise lawyers how to respond to their client, former clients, opposing counsel, and opposing counsel’s clients. The ABA recommends that in these scenarios, the lawyer either not respond to the negative posts, respond by asking the person who is posting to allow for a private discussion offline, or respond by stating that professional obligations do not permit the attorney to respond. The committee noted that any response to the negative review or comment may be counterproductive.

In sum, there is no panacea for dealing with false accusations, especially anonymous ones. One goal is not to react in a manner that would run afoul of the aphorism that two wrongs don’t make a right. Although revenge might best be served cold, a Chinese saying provides that a person who seeks revenge should dig two graves: one for the person against whom revenge is sought and one for the person seeking revenge. Life is not fair.

Francis G.X. Pileggi, Esquire, is the managing partner of the Delaware office of Lewis Brisbois Bisgaard & Smith LLP. He comments on legal ethics as well as corporate and commercial decisions at www.delawarelitigation.com.