# Americas Mining Corp. v. Theriault > Supreme Court of Delaware · August 27, 2012 · 51 A.3d 1213 URL: https://www.frixlaw.com/law-library/cases/4966049 ## Case - **Full name:** AMERICAS MINING CORPORATION, Below v. Michael THERIAULT, as Trustee for the Theriault Trust, Below, Appellee Southern Copper Corporation, formerly known as Southern Peru Copper Corporation, Nominal Below v. Michael Theriault, as Trustee for the Theriault Trust, Below - **Court:** Supreme Court of Delaware - **Decided:** August 27, 2012 - **Citations:** 51 A.3d 1213; 2012 WL 4335192 - **Precedential status:** Published - **Opinion:** Concurring in part by Berger - **Judges:** Berger, Holland, Ridgely, Steele, Vaughn - **Cited by:** 181 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4966049 ## How later opinions describe it (automated extraction) - finding that, under Delaware law, an award of attorneys’ fees in a case involving a common fund is properly based upon a percentage of the benefit achieved in the litigation and pointing out that federal cases consider reasonableness factors “which are similar to [the] Sugarla… - holding that a plaintiff “is required to identify specific acts of individual defendants ... for his claim to survive” - finding that “defendants breached their duty of loyalty” by channeling value away from stockholders through the exchange of “over $3 billion worth of actual cash value for something that was worth much less” - holding that allocation of the burden of proof did not constitute reversible error because the allocation had only a “slight” or “modest” effect that only would arise if the evidence “stood in equipoise” - holding that "if the record does not permit a pretrial determination that the defendants are entitled to a burden shift, the burden of persuasion will remain with the defendants throughout the trial to demonstrate the entire fairness of the interested transaction" ## Opinion text BERGER, Justice, concurring and dissenting: I concur in the majority’s decision on the merits, but I would find that the trial court did not properly apply the law when it awarded attorneys’ fees, and respectfully dissent on that issue. The majority finds no abuse of discretion in the trial court’s decision to award more than $304 million in attorneys’ fees. The majority says that the trial court applied the settled standards set forth in Sugarland Industries, Inc. v. Thomas, 133 and that this Court may not substitute its notions of what is right for those of the trial court. But the trial court did not apply Sugarland, it applied its own world views on incentives, bankers’ compensation, and envy. To be sure, the trial court recited the Sugarland standards. Its analysis, however, focused on the perceived need to incen-tivize plaintiffs’ lawyers to take cases to trial. The trial court hypothesized that a stockholder plaintiff would be happy with a lawyer who says, “If you get really rich because of me, I want to get rich, too.” 134 Then, the trial court talked about how others get big payouts without comment, but that lawyers are not viewed the same way: [Tjhere’s an idea that when a lawyer or law firms are going to get a big payment, that there’s something somehow wrong about that, just because it’s a lawyer. I’m sorry, but investment banks have hit it big.... They’ve hit it big many times. And to me, envy is not an appropriate motivation to take into account when you set an attorney fee. 135 The trial court opined that a declining percentage for “mega” cases would not create a healthy incentive system, and that the trial court would not embrace such an approach. Rather, the trial court repeatedly pointed out that “plenty of market participants make big fees when their clients win,” and that if this were a hedge fund manager or an investment bank, the fee would be okay. 136 In sum, the trial court said that the fundamental test for reasonableness is whether the fee is setting a good incentive, and that the only basis for reducing the fee would be envy. 137 That is not a decision based on Sugarland. Reargument Unanimously Denied The appellants, Americas Mining Corporation (“AMC”) and nominal defendant, Southern Copper Corporation, have filed a motion for reargument. The issue raised on reargument is the narrow question of whether the relevant “benefit achieved” for calculating attorneys’ fees in a derivative case, against a majority stockholder and other defendants, is properly defined as the entire judgment paid to the corporation, or, in this case, 19% of the entire judgment paid to the corporation, because the majority stockholder defendant owns 81% of the corporation that will receive the judgment. This Court has carefully considered the motion for reargument filed by the Defendants, and the response filed by the Plaintiff. We have determined that the motion for reargument is procedurally barred un *1264 der Delaware law, because the issue raised on reargument was not fully and fairly presented in the Defendants’ opening briefs; 138 and alternatively, because it is substantively without merit, as a matter of Delaware law. 139 Waiver Constitutes Procedural Bar This Court’s rules specifically require an appellant to set forth the issues raised on appeal and to fairly present an argument in support of those issues in their opening brief. If an appellant fails to comply with these requirements on a particular issue, the appellant has abandoned that issue on appeal. 140 Supreme Court Rule 14(b)(vi)(A)(3) states that “[t]he merits of any argument that is not raised in the body of the opening brief shall be deemed waived and will not be considered by the Court on appeal.” Neither of the Defendants’ opening briefs properly raised the issue set forth in the limited motion for reargument. AMC’s opening brief did not mention the issue at all and Southern Copper Corporation’s opening brief only mentioned the issue indirectly in a footnote. Arguments in footnotes do not constitute raising an issue in the “body” of the opening brief. 141 Therefore, the issue raised in the limited motion for reargument is procedurally barred, as a matter of Delaware law, because it has been waived. On that basis alone the motion must be denied. 142 Argument Without Substantive Merit Alternatively, and as an independent basis for denying the limited motion for reargument, we conclude that the Court of Chancery properly rejected the “look through” approach to awarding attorneys’ fees in a derivative action. The derivative suit has been characterized as “one of the most interesting and ingenious of accountability mechanisms for large formal organizations.” 143 It enables a stockholder to bring suit on behalf of the corporation for harm done to the corporation. 144 Because a derivative suit is being brought on behalf of the corporation, any recovery must go to the corporation. 145 In addition, a stockholder who is directly injured retains the right to bring an individual action for those injuries affecting his or her legal rights as a stockholder. 146 Such an individual injury is distinct from an injury to the corporation alone. “In such individual suits, the recovery or other relief flows directly to the stockholders, not to the corporation.” 147 *1265 In Tooley v. Donaldson, Lufkin, & Jenrette, Inc., this Court held that whether a claim is derivative or direct depends solely upon two questions: “(1) who suffered the alleged harm (the corporation or the suing stockholders, individually); and (2) who would receive the benefit of any recovery or other remedy (the corporation or the stockholders, individually)?” 148 It is undisputed that this is a derivative proceeding. In this case, the corporation was harmed and the total recovery is awarded to the corporation, Southern Copper Corporation — not “nominally” but actually. In assessing the “benefit achieved,” the Court of Chancery held, and this Court affirmed, that the benefit achieved in a derivative action is the benefit to the corporation. The “look through” approach to awarding attorneys’ fees in a derivative case was properly rejected by the Court of Chancery long ago in Wilderman v. Wilderman, 149 Similarly, in rejecting the Defendants’ “look-through” argument in this derivative action, the Court of Chancery stated: There’s also this argument that I should only award — I should basically look at it like it’s a class action case and that the benefit is only to the minority stockholders. I don’t believe that’s our law. And this is a corporate right. And, you know, if you look going back to 1974 ... there was Wilderman versus Wilderman, 328 A.2d 456 , which talks about not disregarding the corporate form in a derivative action and looking at the benefit to the corporation, to the more recent Carlton — Carlson case, which is now reported, in 925 A.2d 506 does the same. No stockholder, including the majority stockholder, has a claim to any particular assets of the corporation. 150 Accordingly, Delaware law does not analyze the “benefit achieved” for the corporation in a derivative action, against a majority stockholder and others, as if it were a class action recovery for minority stockholders only. Therefore, the limited motion for reargument is substantively without merit. On that alternative basis alone the motion must also be denied. 151 Now, therefore, this 21st day of September 2012, it is hereby ordered that the motion for reargument is unanimously denied. . Sugarland. Indus., Inc. v. Thomas, 420 A.2d 142 (Del.1980). . Appellant Southern Copper Corporation's Opening Brief, Exhibit A at 74. . Id. at 82. . Id. at 81-83. . Id. at 83-84. . Flamer v. State, 953 A.2d 130, 134 (Del.2008); Roca v. E.I. du Pont de Nemours & Co., 842 A.2d 1238, 1242 (Del.2004). . Wilderman v. Wilderman, 328 A.2d 456, 458 (Del.Ch.1974). See Gentile v. Rossette, 906 A.2d 91, 102-03 (Del.2006); Tooley v. Donaldson, Lufkin, & Jenrette, Inc., 845 A.2d 1031 (Del.2004). . Roca v. E.I. du Pont de Nemours & Co., 842 A.2d at 1242 . . See Supreme Court Rule 14(d) ("Footnotes shall not be used for argument ordinarily included in the body of a brief...."). . Michigan v. Long, 463 U.S. 1032, 1044 , 103 S.Ct. 3469 , 77 L.Ed.2d 1201 (1983). . Kramer v. W. Pac. Indus., Inc., 546 A.2d 348, 351 (Del.1988) (quoting R. Clark, Corporate Law 639-40 (1986)). . Kramer v. W. Pac. Indus., Inc., 546 A.2d at 351 . . Tooley v. Donaldson, Lufkin, & Jenrette, Inc., 845 A.2d at 1036 . . Id. . Id. . Id. at 1033 . . Wilderman v. Wilderman, 328 A.2d at 458 . . Norte & Co. v. Manor Healthcare Corp., 1985 WL 44684 , at *3 (Del.Ch.) ("[T]he corporation is the legal owner of its property and the stockholders do not have any specific interest in the assets of the corporation.”). . Michigan v. Long, 463 U.S. at 1044 , 103 S.Ct. 3469 . --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4966049. Public record. Not legal advice.