                             COURT OF CHANCERY
                                   OF THE
 SAM GLASSCOCK III           STATE OF DELAWARE                COURT OF CHANCERY COURTHOUSE
  VICE CHANCELLOR                                                       34 THE CIRCLE
                                                                 GEORGETOWN, DELAWARE 19947


                            Date Submitted: July 22, 2019
                             Date Decided: July 23, 2019

Brian E. Farnan, Esquire                       Kevin G. Abrams, Esquire
Michael J. Farnan, Esquire                     J. Peter Shindel, Jr., Esquire
Rosemary J. Piergiovanni, Esquire              Matthew L. Miller, Esquire
Farnan LLP                                     Abrams & Bayliss LLP
919 North Market Street, 12th Floor            20 Monthchanin Road, Suite 200
Wilmington, DE 19801                           Wilmington, DE 19807

Anthony A. Rickey, Esquire                     Kevin M. Gallagher, Esquire
Margrave Law LLC                               Robert L. Burns, Esquire
8 West Laurel Street, Suite 2                  Richards, Layton & Finger, P.A.
Georgetown, DE 19947                           One Rodney Square
                                               920 North King Street
Jeremy D. Eicher, Esquire                      Wilmington, DE 19801
Eicher Law LLC
1007 N. Orange Street, 4th Floor
Wilmington, DE 19801

              Re:    Shiva Stein v. Lloyd C. Blankfein, et al., C.A. No. 2017-0354-SG

Dear Counsel:

      I have the Objector’s Application for Certification of an Interlocutory Appeal

as well as the Director-Defendants’ Response. I must consider a request for

certification in light of Supreme Court Rule 42. As many decisions of our courts

have made clear, the purpose of Rule 42 is to prevent wasteful piecemeal litigation

from overwhelming the docket of the Supreme Court.               Accordingly, “[n]o

interlocutory appeal will be certified by the trial court or accepted by [the Supreme
Court] unless the order of the trial court decides a substantial issue of material

importance that merits appellate review before a final judgment.” 1 To the extent this

is considered as a truly interlocutory appeal, I find that adherence to Rule 42

precludes certification. To the extent this appeal is subject to the Collateral Order

Doctrine, such analysis is outside the purview of the trial court review mandated by

Rule 42.

                            I. INTERLOCUTORY APPEAL

          The decision subject to the request for certification here involves an award for

attorneys’ fees under the corporate benefit doctrine. The case involved direct and

derivative claims brought by a stockholder of Goldman Sachs, with respect to which

the parties had reached a settlement agreement. Settlement of these claims required

approval by this Court. Under the proposed settlement, derivative claims, which

belong to the corporation, would be released in return for the corporation—for

whose benefit the Plaintiff was purportedly acting—adopting some minor hygienic

practices. The Objector appeared at the Settlement Hearing and opposed the

settlement. I found the objection helpful, but independently concluded that the

settlement was not fair to the corporation or its stockholders. Accordingly, I denied

the settlement. The matter then proceeded on a motion to dismiss, which I granted




1
    Supr. Ct. R. 42(b).
                                              2
in part and denied in part. The remaining issue involves an allegation of self-dealing

on the part of the Director-Defendants.

          As I expressed in my Letter Order of July 1, 2019 regarding the Objector’s

fee request, the objection was helpful to me. The rationale of my decision to deny

the motion to approve the settlement was, however, my own. Nonetheless, for the

reasons stated in the Letter Order, I found that the Objector had worked a substantial

benefit on the corporation.

          In evaluating the appropriate fee under the corporate benefit doctrine, I

applied the factors delineated by our Supreme Court in Sugarland Industries, Inc. v.

Thomas.2 Applying those factors to the facts at hand, I found an attorneys’ fee award

to the objector, exclusive of costs, in the amount of $100,000.00 to be appropriate.

          It is this decision that is subject to this request for an interlocutory appeal.

Rule 42(b)(2) sets out the criteria I must consider upon a motion for certification.3 I

address, in turn, the criteria identified by the Objector as applicable:

(A) Does the interlocutory order involve a question of law resolved for the first time

       in Delaware?

       According to the Objector, this factor is satisfied. However, I see the issue

       differently. The Objector, I found, worked a benefit on the corporation. In such



2
    420 A.2d 142 (Del. 1980).
3
    Supr. Ct. R. 42(b)(2)(iii).
                                              3
    a case, it is appropriate (and settled law provides) that the cost of producing such

    benefit not fall solely on the party. Instead, it should be borne by the corporation

    and secondarily, by its owners, the stockholders. Fees for producing such

    benefit have been addressed by this Court many, many times. Our Supreme

    Court has provided the criteria under which the court should exercise its

    discretion; those factors are set out in the Sugarland case. 4 Therefore, I do not

    find that a question of law is resolved here for the first time.

(B) Are the decisions of the trial courts conflicting upon the question of law?

    Again, the question of law is whether granting a fee application is appropriate

    under the corporate benefit doctrine. It is settled law that such a question is

    answered in the affirmative once the trial court determines that a substantial

    benefit has been worked for the entity. The Objector points out that the

    application of the trial court’s discretion to the particular benefit produced

    results in fee awards that vary from case to case, and that, therefore, the trial

    courts are in conflict.     While the predicate is correct, the conclusion is

    unwarranted. The law itself is well-settled.

(C) Will review of the interlocutory order serve considerations of justice?




4
 Sugarland, 420 A.2d 142.; see also Loral Space & Commc’ns, Inc. v. Highland Crusader
Offshore Partners, L.P., 977 A.2d 867, 870 (Del. 2009).
                                           4
    The Objector argues strenuously that, in setting the fee as I did, I have created a

    perverse incentive that will prevent beneficial objections to settlements in the

    future. Therefore, a review is in the interest of justice. I find that this factor

    supports interlocutory review, but is of slight weight.

The remaining factors set out in Rule 42(b)(iii) are inapplicable here.

       Essentially, the Objector seeks appellate review of an exercise of discretion

under long-established principles and precedents. On balance, after review of the

interests of justice and in particular, the factors set forward in Rule 42(b)(iii), I do

not find that the likely benefits of interlocutory review outweigh the probable costs

such that the interlocutory review is in the interest of justice.5

                      II. COLLATERAL ORDER DOCTRINE

       The Objector submits that the matter of his fee award is collateral to the

substantive issues in the case itself, and argues that interlocutory appellate review is

appropriate because his interest has been finally adjudicated. The Objector, in other

words, invokes the Collateral Order Doctrine.6 The Objector is correct that the

matter of his fee award is both collateral to the substantive issues in this matter and

final. However, the applicability of the Collateral Order Doctrine is not among the

matters directed to the trial court under Rule 42, and thus it must be addressed

5
  Supr. Ct. R. 42(b)(2)(iii).
6
  See Evans v. Justice of the Peace Ct. No. 19, 652 A.2d 574, 576–77 (Del. 1995); Gannett Co.,
Inc. v. State, 565 A.2d 895, 899–900 (Del. 1989); Cohen v. Beneficial Indus. Loan Corp., 337
U.S. 541, 545–47 (1949).
                                               5
directly to the Supreme Court by the appellant. Any discussion of the doctrine here

would be advisory, and inappropriate.

                              III. CONCLUSION

      For the foregoing reasons, the Objector’s application for certification of

interlocutory appeal is denied. An appropriate form of order in compliance with

Rule 42(c)(iv) is attached.



                                            Sincerely,

                                            /s/ Sam Glasscock III

                                            Sam Glasscock III




                                        6
   IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
                       IN AND FOR SUSSEX COUNTY


SHIVA STEIN, derivatively on behalf of
                               )
The Goldman Sachs Group, Inc., and
                               )
individually as a Stockholder of The
                               )
Goldman Sachs Group, Inc.,     )
                               )
               Plaintiff,      )
                               )
    v.                         ) C.A. No. 2017-0354-SG
                               )
LLOYD C. BLANKFEIN, M.         )
MICHELE BURNS, GARY D. COHN,   )
MARK A. FLAHERTY, WILLIAM W. )
GEORGE, JAMES A. JOHNSON,      )
ELLEN J. KULLMAN, LAKSHMI N.   )
MITTAL, ADEBAYO O. OGUNLESI,   )
PETER OPPENHEIMER, DEBORA L.   )
SPAR, MARK E. TUCKER, DAVID A. )
VINIAR, MARK O. WINKELMAN, and )
THE GOLDMAN SACHS GROUP,       )
INC.,                          )
                               )
               Defendants.     )


   ORDER DENYING LEAVE TO APPEAL FROM INTERLOCUTORY

                                     ORDER

      This twenty-third day of July, 2019, Objector Sean J. Griffith having made

application under Rule 42 of the Supreme Court for an order certifying an appeal

from the interlocutory order of this Court, dated July 1, 2019; and the Court having

found that such order lacks a substantial issue of material importance that merits
appellate review before a final judgment and that only one of the criteria of Supreme

Court Rule 42(b)(iii) apply;

      IT IS ORDERED that the Court’s order of July 1, 2019, is hereby not certified

to the Supreme Court of the State of Delaware for disposition in accordance with

Rule 42 of that Court.

                                             /s/ Sam Glasscock III
                                             Vice Chancellor
