The record upon which a court evaluates a motion to dismiss is often outcome-determinative. If based upon the well-pleaded allegations of a plaintiff’s complaint, the court cannot determine that it is reasonably conceivable that the plaintiff may obtain a recovery, the court must dismiss the complaint. As a general matter, the plaintiff controls the record by virtue of how and what the plaintiff pleads. The Delaware Supreme Court has held, however, that the record fairly before the court on a motion to dismiss may include documents “integral to and incorporated into the complaint.” The recent Court of Chancery decision in In re Gardner Denver Shareholders Litigation, Cons. C. A. No. 8505-VCN (Feb. 21, 2014), provides useful guidance concerning how the Court of Chancery will treat deposition transcripts where, as is happening more frequently, a plaintiff pursues but abandons a preliminary injunction after deposing several witnesses, and then amends the complaint by selectively quoting from the deposition record.
Gardner Denver involved a class action in which the plaintiff claimed that the defendant directors breached their fiduciary duties in agreeing to a merger between Gardner Denver and an affiliate of Kohlberg Kravis Roberts & Co. (KKR) and that KKR aided and abetted those breaches. The plaintiff withdrew his request for a preliminary injunction in exchange for waiver of certain contractual provisions in the merger agreement and additional disclosures to stockholders. Following the closing of the merger, the plaintiff amended his complaint with allegations that included “several quotations from, and numerous characterizations of, selective portions of deposition testimony obtained in expedited discovery.” The defendants in their opening brief in support of their motion to dismiss quoted and characterized portions of the deposition testimony other than those explicitly or implicitly referenced in the amended complaint. The plaintiff then moved to strike those portions of the deposition testimony, which he argued were extraneous to his pleading and not properly before the court on a motion to dismiss.
Court Finds a Motion to Strike May be Appropriate
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