Scully v. Nighthawk: An Apology to Counsel

In Scully v. Nighthawk, VC Laster expressed concerns over the behavior of defense counsel, particularly counsel's choice in settling a case in Arizona instead of Delaware.  He went so far as to assign special counsel to look into the matter.  We discussed the report of special counsel on this Blog.  We noted that the Report, while a nice piece of legal work, did not provide VC Laster with all of the possible options that he might invoke in these types of circumstances. 

The Vice Chancellor has now written a letter (posted on the DU Corporate Governance web site) and set out below on the matter.  He not only determined that he had "no concerns about the conduct of any attorney in this matter" but he essentially apologized for asking questions that "unfairly cast defense counsel in a negative light."  The letter is a major change in tone and approach from the statements made at the hearing on December 17.

Apologies can be very appropriate.  Hopefully they will not be reserved for only one side in any litigation and, where appropriate, will be doled out to both the Pilgrims and the courageous. 

The letter and other primary material (including the Report of Special Counsel and the transcript of the original hearing) are posted on the DU Corporate Governance web site.

Dear Counsel:

        I have received and read carefully the excellent brief from special counsel, as well as your written submissions.  I am fully satisfied with parties' explanations, and I agree  with special counsel’s analysis of the law and assessment of what took place.  As a result, I have no concerns about the conduct of any attorney involved in this matter.

       The parties have provided the Arizona Court will full information about the Delaware proceeding.  With that information, Judge Burke is well positioned to rule on the fairness of the settlement.

        After considering this matter further with the benefit of the submissions from the parties and special counsel, I regard some of the questions that I posed during the status conference as  regrettable  and  misplaced.  I care greatly about the integrity of the representative litigation process and about whether the interests of represented parties are being served as they should be.  In this situation, my legitimate concerns caused me to  inquire about potential remedies against defense counsel if collusion were shown.      

      Those questions unfairly cast defense counsel in a negative light.  As someone who has been entrusted with the responsibility of reviewing the conduct of others, I have a particular responsibility to acknowledge when I believe I have made a mistake.

       To reiterate, I have no concerns about the conduct of any attorney involved in this matter.

       This case is hereby stayed pending the completion of the Arizona litigation.  IT IS SO ORDERED.

                                                    Sincerely yours,

                                                    /s/ J. Travis Laster

                                                    J. Travis Laster

                                                    Vice Chancellor