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Mesirov v. Enbridge Energy Co.

Court of Chancery of Delaware

May 30, 2018, Submitted; August 29, 2018, Decided

C.A. No. 11314-VCS

Opinion

MEMORANDUM OPINION

SLIGHTS, Vice Chancellor

"It's déjà vu all over again." "Thank you sir, may I have another?" Given the procedural history of this three-year-old case, it is difficult to say who as between Yogi Berra or Kevin Bacon best captures the redundancy of the latest round of pleadings-stage dispositive motions that I endeavor to decide, again, in the following pages. What is not difficult to discern, however, is that I have seen many of the arguments presented in the motions sub judice before. That much was clear from the first pages of the Enbridge defendants' opening brief. [*3]  In ruling on the first motion to dismiss, I followed the defendants' flag and dismissed the then-operative complaint for failure to state legally viable claims. Our Supreme Court reversed and remanded with clear instructions. Notwithstanding these clear instructions, defendants bring motions to dismiss the current version of the complaint on many of the same grounds our Supreme Court has already rejected. Those grounds will find no revival here.

The case arises from a related-party transaction where a master limited partnership, Enbridge Energy Partners, L.P. ("EEP" or the "Partnership"), repurchased a substantial asset from its general partner, Enbridge Energy Company, Inc. ("EEP GP"), for $1.0 billion (the "Transaction).1 EEP had sold the same asset to the controlling parent of EEP GP at a substantially lower price approximately six years before the Transaction. That deal spawned its own litigation, and that litigation produced certain rulings from this court and the Delaware Supreme Court that are directly relevant here.

Drawing in part upon rulings in the earlier litigation, I dismissed the first class and derivative complaint brought by an EEP unitholder on the ground that it failed [*4]  to state claims for breach of fiduciary duty, breach of EEP's limited partnership agreement (the "LPA") or breach of the implied covenant of good faith and fair dealing.2 As noted, in an opinion that provided needed clarity in the alternative entity space, the Supreme Court reversed, provided certain definitive constructions of the LPA, defined the boundaries of the contractual good faith standard imposed by that contract and remanded for further proceedings consistent with its guidance.3 Since then, I have granted leave for a new party to be substituted as lead class plaintiff and for the filing of further amendments to the complaint.

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2018 Del. Ch. LEXIS 294 *; 2018 WL 4182204

JUDY MESIROV, derivatively and on behalf of all others similarly situated, Plaintiff, v. ENBRIDGE ENERGY COMPANY, INC., ENBRIDGE, INC., ENBRIDGE ENERGY MANAGEMENT, L.L.C., JEFFREY A. CONNELLY, REBECCA B. ROBERTS, DAN A. WESTBROOK, J. RICHARD BIRD, J. HERBERT ENGLAND, C. GREGORY HARPER, D. GUY JARVIS, MARK A. MAKI, JOHN K. WHELEN, ENBRIDGE PIPELINES (ALBERTA CLIPPER) L.L.C., ENBRIDGE ENERGY, LIMITED PARTNERSHIP, and PIPER JAFFRAY & CO. (as successor to SIMMONS & COMPANY INTERNATIONAL), Defendants.

Notice: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.

Prior History: Brinckerhoff v. Enbridge Energy Co., 159 A.3d 242, 2017 Del. LEXIS 117 (Del., Mar. 20, 2017)

CORE TERMS

aiding and abetting, fiduciary duty, contractual, Partnership, advisor, good faith, alleges, pled, tortious interference, motion to dismiss, fiduciary, pipeline, fair and reasonable, projected, well-pled, financial adviser, bad faith, transactions, stockholder, valuation, breaches, special committee, first complaint, general partner, Defendants', residual, billion, Energy, limited partnership, breach of contract

Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Judgments, Preclusion of Judgments, Law of the Case, Business & Corporate Compliance, Limited Partnerships, Business & Corporate Law, Limited Partnerships, Business & Corporate Law, Shareholder Actions, Actions Against Corporations, Derivative Actions, Direct Actions, Derivative Actions, Enforcement of Corporate Rights, Contracts Law, Breach, Breach of Contract Actions, Torts, Multiple Defendants, Concerted Action, Civil Aiding & Abetting, Contracts Law, Contract Interpretation, Fiduciary Responsibilities, Formation, Intentional Torts, Breach of Fiduciary Duty, Elements, Contracts, Intentional Interference, Directors & Officers, Management Duties & Liabilities, Fiduciary Duties