WILMINGTON, Del. (Legal Newsline) – A Delaware judge has ruled that stockholder-plaintiff the Firemen’s Retirement System of St. Louis is entitled to documents used by Oracle Corp.'s special litigation committee (SLC) in a derivative lawsuit.
The Court of Chancery of the State of Delaware ruled on the case on Dec. 4, determining that documents the SLC created by the corporation relied on to determine that the case should move forward should be made available to the plaintiff.
In the earlier days of the lawsuit, Oracle was denied its motion to dismiss, leading it to create a special litigation committee of the board to assess plaintiff's claim. Glasscock put the lawsuit on hold to let the committee, which had its own counsel, evaluate the lawsuit.
The committee determined that it was best for the litigation to be pursued, “and determined that that asset [a.k.a. the complaint] would best be monetized on behalf of the corporation by allowing the original plaintiff to proceed, derivatively,” according to the opinion.
“I find that the litigation asset was enhanced by the review of the SLC, and that documents relied on by that committee pertain to the asset and must be available to the derivative plaintiff as fiduciary for the corporation designated by the special litigation committee, subject to the privileges and immunities that may be raised by the individual defendants and the special litigation committee in its business judgment,” wrote Vice Chancellor Sam Glasscock III.
He ruled that the plaintiff should have access to any relevant documents the SLC referenced in making its decision. The plaintiff pointed out that it’s not interested in the “irrelevant” documents, but only wants the roughly 1.4 million documents that the SLC has to make sure Oracle is not concealing any relevant information that the SLC used but could harm the defendant’s case.
Glasscock pointed out that Oracle made the decision to create the SLC and give it documents to look into the litigation. At the same time, Oracle failed to point out why the plaintiff having access to the documents would offset any advantage for Oracle. Considering this, Glasscock ruled that privileged documents should be handed over to the plaintiff as well.
Still, Glasscock added that the individual defendants should be given a chance to review the documents before they’re sent to the plaintiff.
Oracle also prevailed concerning SLC’s own documents, which Glasscock said the plaintiff shouldn’t be privy to, as well as documents stemming from mediation.