Free Letter - District Court of Delaware - Delaware

Case 1 :05-cv-00298-JJF Document 77 Filed 10/14/2005 Page 1 of 1
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October 14, 2005
The Honorable Joseph J. Faman, Jr.
United States District Court
For the District of Delaware
844 North King Street
Wilmington, Delaware 19801
Re: Frank D. Seinfeld v. Craig R. Barrett, et al.
D. Del., C.A. 05-298-JJF
Dear Judge Farnan:
We object to the letter from Stephen C. Norman to the court, dated October 6, 2005, and ask the
court to strike it as not complying with Local Rule 7. 1 .2(c). The first case cited, Fink v. Weill, 2005 WL
2298224 (S.D.N.Y 2005) is not pertinent. It merely reiterates discussions in Rales v. Blasband, 634
A.2d 827 (Del. 1993) and Seminaris v. Landa, 662 A.2d 1350 (Del. 1993) that are inapplicable at bar.
Fink held that demand was required because the plaintiff "essentially alleges that Defendants failed
to take action to prevent" managerial misconduct, *3, and therefore there was no decision [emphasis in
original] to form the basis of a challenged transaction. (FN 6.) By contrast, at bar the complaint alleges
that the individual defendants solicited stockholder approval of a compensation plan by means of
materially false and misleading proxy statement, and thereby violated § 14(a) ofthe Securities Exchange g
Act or 1934.
In Fink, the court addressed the §14(a) claim and held that it failed because the injury allegedly
flowed from the directors’ wrongful conduct following their election, rather than from the stockholder
vote itself Fink, 2005 WL 2298224 at *5. This is hardly a new rule. It was enunciated some years ago L
by the Third Circuit in General Electric C0. v. Cathcart, 980 F.2d 927, 932-33 (3rd Cir. 1992).
The letter also makes further argument concerning culpability standards that Intel raised in its
brief in opposition to plaintiff’s motion for summary judgment. It cites Ash v. LFE Corp., 525 F.2d 215
(3rd Cir. 1975) and argues that other cases that were not decided after their final brief applied a
culpability standard of negligence. They cite Gould v. American Hawaiian S.S. C0., 535 F.2d 761, 777-
78 (3rd Cir. 1976), but there the lower court (this court) had awarded monetary damages. 535 F.2d at
769, 778. We submit that making such an argument under the guise of Local Rule 7.1.2.(c) is forbidden
without "specific leave of the court." Arasieh v. MBNA America Bank; NA., 146 F.Supp.2d 476, 480
n.2 (D.Del. 2001). 1
Respectfully,
cc: Stephen C. Norman, Esq. A. Arnold Ger hon
Francis G.X. Pileggi, Esq. Admitted Pro Hac Vice