EFTA01069752.pdf

SUSMAN GODFREY L.L.P. A REOISTERED LIMITED LIABILITY PARTNERSHIP 15TH FLOOR 560 LEXINGTON AVENUE NEW YORK, 0022-6828 5une 5100 Sony 5100 'June 950 Some 3800 1000 Louitiwia Smurr 001 Mull Sinn 1901 AYR.ue or me Smas 1201 Thum AVENUE Mwt 096 LOS ANSE 7-0029 Mau. -3003 Sizohl DIRECT DIAL FAX DI'MC/ pti July 12, 2011 Via Email The Honorable Anthony J. Carpinello JAMS 620 Eighth Avenue, 34th Floor New York, NY 10018 Re: FORTRESS VERF I I,I,C and FORTRESS VALUE RECOVERY vs. JEEPERS, INC. JAMS Ref. No.: 1425006537 Dear Judge Carpinello: Respondent, Counterclaimant and Third-Party Claimant Financial Trust Company, Inc. and Jeepers, Inc. ("FTC") submit this letter in advance of the call with Your Honor on July 13, 2011 to discuss the order of opening statements. All parties apparently agree that FTC should put on its evidentiary case first; the Fund has abandoned that role. The only dispute is whether FTC's opponents should be able to open first (the Fund) and last (the Zwim entities)—and presumably close too. Allowing the Fund and Zwirn to bookend FTC in this fashion makes no sense. The Fund provides no explanation for why it should maintain the right to open and close the case after having abandoned its role as plaintiff in every other facet of the litigation. The Fund is merely a declaratory judgment plaintiff. FTC is the real plaintiff, bearing the burden of proof on the critical issues, and thus realignment of the parties is fully justified. See, e.g., Saudi Basic India. Corp. v. Mobil, 2003 WL 25849476, at *2 (Del. Sup.) ("Similarly, the Court is not reluctant to realign the order of proof where a party resorts to a preemptive strike via declaratory judgment for the purpose of securing priority as to forum, when realignment makes clear the true posture of the case. Under the circumstances presented, the Court is compelled to I6I0768vI/Ol1585 EFTA01069752 The Honorable Anthony J. Carpinello July 12, 2011 Page 2 look beyond the pleadings and allocate the burden of proof to the party that must prove the ultimate issue at trial, ExxonMobil.") (attached as Exhibit A). As a result, FTC respectfully requests that it be permitted to open and close the case, and FTC will present its evidentiary case first. Sincerely, J etpit.L D 4.1464-adi) Stephen D. Susman cc: Brad S. Karp Allan Arffa John Siffert William O'Brien I610768v1/011585 EFTA01069753 EXHIBIT A EFTA01069754 Westtaw. Page 1 Not Reported in A.2d, 2003 WL 25849476 (Del.Super.) (Cite as: 2003 WL 25849476 (Del.Super.)) H Only the Westlaw citation is currently available. In simple terms, the main issue in this case is whether SABIC breached certain agreements with UNPUBLISHED OPINION. CHECK COURT Mobil Yanbu Petrochemical Company, inc. and RULES BEFORE CITING. Exxon Chemical Arabia, Inc. (collectively, "Exxon- Mobil") by overcharging YANPET and KEMYA This decision was reviewed by West editorial staff (The "Joint Ventures") for their use of Unipol® tech- and not assigned editorial enhancements. nology.M The Court will not recite the facts underly- ing this dispute; they arc amply set forth in the volu- minous pleadings, and memoranda filed in support of Superior Court of Delaware, this motion and the outstanding summary judgment New Castle County. motions. SAUDI BASIC INDUSTRIES CORPORATION, Plaintiff, v. FN1. See Saudi Basic Indus. Corp. v. MOBIL YANBU PETROCHEMICAL COMPANY, ExxonMobil Corp.. 194 F.Suon.2d 378. 385 INC. and Exxon Chemical Arabia, Inc., Defendants. (D.N.J.2002). As Judge Walls noted: "SABIC's complaint seeks declaratory relief ... solely on the issue of whether the royalty C.A. No. 00C-07-161-JRJ. charges were proper under the joint venture Submitted: Dec. 19, 2002. agreements." Id. Decided: Jan. 24, 2003. However, the procedural history leading up to Upon Defendants' Motion to Realign the Order of this motion is critical to its determination. On July Prooffor Trial Presentation-GRANTED. 24.2000, the plaintiff, Saudi Basic Industries Corp. Donald E. Reid Esquire, Morris, Nichols, Arsht & ("SABIC") filed a declaratory judgment action Tunnel!, Wilmington, Delaware, Kenneth R. Adamo against ExxonMobil in this Court. This filing oc- Esquire, Michael W. Vary, Esquire and Leozino currcd one business day after the conclusion of me- Aaozzino. Esquire, Jones, Day, Reavis & Pogue, diation in a related case pending in the United States Cleveland, Ohio, Jeffrey W. Lorell, Esquire and Marc District Court for the District of New Jersey. C. Sinner, Esquire, Saiber, Schlesinger, Satz & Gold- ExxonMobil alleges that SABIC wrongfully used stein, LLC, Newark, New Jersey and Cheryl L. information gleaned during that mediation, or settle- Farine, Esquire, Hudak, Shunk & Farine Co., L.P.A., ment discussions, in violation of the parties express Cuyahoga Falls, Ohio, for Plaintiff. agreements, to file this suit "in a blatant attempt to gain a tactical advantage." EN-2 In short, ExxonMobil William J. Wade Esquire, Richards, Layton & Fin- accuses SABIC of forum shopping in an effort to ger, Wilmington, Delaware, James W. Ouinn, Es- "avoid having the trier of fact in New Jersey hear quire and David Lender Esquire, Weil, Gotshal & about ... [SABIC's] improper overcharges...." E-2 Manges, LLP, New York, New York, K.C. Johnson, Esquire, Exxon Mobil Corporation, Houston, Texas, FN2, Def.'s Mem. Law Supp. Mot. Realign for Defendants. Order Proof Trial Presentation at 3 [herein- after Def.'s Mem. Law]. OPINION JURDEN J. FN3. Id. at 3, n. 4. INTRODUCTION/BACKGROUND *1 The issue before this Court in the instant mo- tion is whether or not, in view of the facts of this case In response to SABIC's declaratory judgment ac- and the recognized rules of law and practice, re- tion. ExxonMobil filed counterclaims based on the alignment of the order of proof is appropriate. alleged overcharges by SABIC including, inter alia, C 2011 Thomson Reuters. No Claim to Orig. US Gov. Works. EFTA01069755  Page 2 Not Reported in A.2d, 2003 WL 25849476 (Del.Super.) (Cite as: 2003 WL 25849476 (Del.Super.)) claims for breach of contract, breach of fiduciary Amended ,Complaint is merely a compilation of de- duty, unjust enrichment and promissory estoppel. In fenses." 112 ExxonMobil correctly points out that: the motion presently before this Court, ExxonMobil asks the Court to "realign" the order of proof for trial FN8. See Del. Unit R. Evid. 611(a). presentation because ExxonMobil "bears the burden of proof on the ultimate issue for trial, and because FN9, Def.'s Mem. Law at 7. realignment in this instance promotes the conserva- tion of judicial resources and lessens jury confusion." *2 [r]egardless of what the caption reads, SABIC is in the position of traditional defendant, asserting that it acted correctly. ExxonMobil, on the other FN4. Def.'s Mem. Law at 5. hand, is in the position of traditional plaintiff, as- serting the affirmative position that SABIC caused DISCUSSION it harm by improperly overcharging the joint ven- The parties agree that the trial judge has discre- tures, and that SABIC is liable for damages for its tion in determining whether or not to depart from the misconduct. ELL'A usual order of proof at trial.M1 That discretion is broad.M According to Delaware Uniform Rule of FNI0. Id. Evidence 611(a), In reality, SABIC is a "nominal" plaintiff; there FNS. Hit Tr. (Dec. 19, 2002) at 115, 119. is no question that the ultimate issue to be decided by the jury is whether SABIC overcharged the joint ven- FN6. See Poe v. State, 624 A.2d 399. 403 tures. There is also no question that ExxonMobil (De1.1993); Brothers v. McKay 544 A.2d bears the burden of proof with respect to this ultimate 265. 265 (De1.1988); Gaston v. State 234 issue. A.2d 324. 325 (Del.1967); Baltimore & 0. K. Co. v. Hawk. 143 A. 27.31 (Del.1928). ExxonMobil further argues that "given the facts surrounding SABIC's filing, allowing it to have the Control by court. The court shall exercise reason- benefits of being the plaintiff without the attendant able control over the mode and order of interrogat- burdens is grossly unfair." Eall Clearly, SABIC did ing witnesses and presenting evidence so as to (1) win the race to the Courthouse, and, in doing so, make the interrogation and presentation effective selected the forum in which it desired to have the for the ascertainment of the truth, and (2) avoid overcharge issue decided. It is also clear, based on needless consumption of time. SABICs actions, that it did not want the New Jersey District Court to decide the overcharge issue. —Ll FN7 DEL. UNIF. ft, EVID. 611(a). Given what transpired prior to the filing of this suit, the Court can only conclude that SABIC engaged in ExxonMobil's concerns about conserving judicial preemptive forum shopping when it decided to file a resources and lessening jury confusion are well declaratory judgment action in the Delaware Superior grounded. Having presided over this complicated Court rather than litigate this issue as a defendant in dispute for over 15 months, and having become very the New Jersey District Court. That being the case, familiar with the salient facts and issues through nu- the Court notes that: merous, hotly contested discovery disputes and ex- tensive motion practice, the Court fumly believes FN I I. Def.'s Mem. Law at 10. that realignment of the order of proof in this case would (a) result in a far more effective presentation FN12. SABIC filed suit here just ten (10) "for the ascertainment of the truth," (b) "avoid need- days before ExxonMobil filed suit in New less consumption of time," and (c) reduce the Jersey District Court on the same overcharge potential for juror confusion. ExxonMobil argues issue. that, "although SABIC is technically the plaintiff by virtue of winning its race to the courthouse, SABIC's FN13. SABIC argued to the New Jersey O 2011 Thomson Reuters. No Claim to Orig. US Gov. Works. EFTA01069756  Page 3 Not Reported in A.2d, 2003 WL 25849476 (Del.Super.) (Cite as: 2003 WL 25849476 (Del.Super.)) District Court that it should abstain from de- the court will realign the parties to reflect ciding the overcharge claims because the actual controversy underlying the action SABIC filed this action before ExxonMobil and determine who is the natural plaintiff") filed the overcharge claims there. (citation and quotation omitted). ... the use of the device of declaratory judgment to FN17. See City of Indianapolis v. Chase anticipate and soften the impact of an imminent Nat'! Bank ofthe City ofNew York 314 U.S, suit elsewhere concerning long past dealings be- 63 69. 62 S.Ct. 15, 86 L.Ed. 47 (1941); tween the parties for the purpose of gaining an af- Philips v. Liberty Mutual Ins. Co.. 235 A.2d firmative judgment in a favorable forum requires a 835 (De1.1967); /Push v. Bellow. 1987 WL closer look at the deference historically accorded a 9369 (Dcl.ChJ; Lutz v. Boos. 171 A.2d 381 plaintiffs choice of forum.alli 383 (Del.Ch.1961). FN14. Products and Chemicals. Inc. v. The In its opposition to realignment, SABIC argues Lummus Co.. 252 A.2d 545, 547 that changing the "ordinary order of proofs would be (Del.Ch.1968) rev'd on other grounds, 252 [grossly] unfair to SABIC." EM The Court does not Aid 543 (Del.1969). agree. The Court's obligation is to exercise "reason- able control" over the presentation of evidence "so as While the Court is historically reluctant to de- to ... make the presentation effective for the ascer- prive a plaintiff of its choice of forum, it is not reluc- tainment of truth...." cu2 Under the circumstances tant to accord less deference to that choice when presented, there will be no unfairness to SABIC by there is "jockeying for position" by "resort to de- realigning the order of proof to place the burden of claratory judgment for the purpose of defensively proving the ultimate issue on the party it belongs, establishing priority as to forum." EMI Similarly, the thereby making it easier for the jury to understand the Court is not reluctant to realign the order of proof presentation of evidence. where a party resorts to a preemptive strike via de- claratory judgment for the purpose of securing prior- FN18. Pl.'s Br. Opp'n Def.'s Mot. Realign ity as to forum, when realignment makes clear the Order Proof Trial Presentation at 10. true posture of the case.F1414 Under the circumstances presented, the Court is compelled to look beyond the INI9 DEL. UNIF. R. EVID. 611(a). pleadings and allocate the burden of proof to the party that must prove the ultimate issue at trial, CONCLUSION ExxonMobil.Eall *3 In the Court's view, proceeding with the order of proof in this manner will promote efficiency, con- FNI5. Id. serve the parties' and the Court's resources, insure the orderly and clear presentation of the evidence, and FN16. See BASF Corp. v. Symington, 50 reduce juror confusion. F.3d 555. 557 (8th Cir.1995) ( realigning the parties to reflect actual controversy where For all these reasons, the Defendants' Motion to plaintiff (BASF) filed declaratory judgment Realign the Order of Proof for Trial Presentation is on statute of limitations, but defendant GRANTED. "claims injury by BASF, and is therefore the natural plaintiff'); St. Paul Mercury Ins. Co. Del.Super.,2003. v, Lexington. Ins. Co.. 888 F.Suop. 1372 Saudi Basic Industries Corp. v. Mobil Yanbu Petro- 1376 (S.D.Tex.1995) ( realigning parties "to chemical Co. better represent the real claims and interests Not Reported in A.2d, 2003 WL 25849476 in the case."). See also Schwendiman Part- (Del.Super.) ners. LLC v. Hurt. 71 F.Supp.2d 983. 988 n. 4 (D.Neb.1999) ("In determining the propri- ety of a declaratory judgment action in cir- END OF DOCUMENT cumstances like those presented in this case, O 2011 Thomson Reuters. No Claim to Orig. US Gov. Works. EFTA01069757  Page 4 Not Reported in A.2d, 2003 WL 25849476 (Del.Super.) (Cite as: 2003 WL 25849476 (Del.Super.)) C 2011 Thomson Reuters. No Claim to Orig. US Gov. Works. EFTA01069758