ALEYNIKOV v. THE GOLDMAN SACHS GROUP, INC.

Filing 266

MEMORANDUM OPINION/ORDER denying 263 Motion for Summary Judgment. Signed by Judge Kevin McNulty on 1/16/15. (DD, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

SERGEY ALEYNIKOV,

Civ. No. 12-5994 (KM-MAH)

Plaintiff,
MEMORANDUM OPINION &
ORDER

v.
THE GOLDMAN SACHS GROUP, INC.,
Defendant.

KEVIN MCNULTY, U.S.D.J.:
This matter comes before the court on the expedited renewed
motion (ECF No. 263) of Plaintiff Sergey Aleynikov for summary judgment
on his claim for advancement of fees against Defendant The Goldman
Sachs Group, Inc., the parent company of his former employer,
Goldman, Sachs & Co. For the reasons set forth below, Aleynikov’s
motion is DENIED.
I awarded summary judgment to Aleynikov (ECF No. 174), but the
Third Circuit reversed my decision, Aleynikov v. Goldman Sachs Group,
Inc., 765 F.3d 350 (3d Cir. 2014). Aleynikov’s motion does not raise any
argument that was not before me on his previous motion for summary
judgment, or before the Third Circuit on appeal from my decision. He
claims, however, that the Third Circuit’s decision left open the possibility
of an award of summary judgment based on Delaware public policy. I
disagree and hold that the mandate of the Court of Appeals, fairly read,
requires me to deny this renewed summary judgment motion.
I.

DISCUSSION

Aleynikov argues that Delaware “has a strong statutory policy

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favoring advancement” and that “Delaware courts broadly, liberally, and
expeditiously construe mandatory advancement provisions.” (P1. Mot. 1,
ECF No. 263). He contends that the Third Circuit, focusing on contra
proferentem, never addressed the argument that “ambiguity in an
advancement provision, regardless of who drafted it and their reasons for
doing so, and regardless of how that ambiguity might ultimately be
resolved, compels a summary finding of advancement.” (P1. Mot. 3—4).
That public policy argument, he says, is independent of the majority’s
basis for reversal: that the advancement provision was ambiguous, and
that the ambiguity could not be resolved by contra proferentem.
According to Aleynikov, even if the term “officer” remains ambiguous,
“Delaware’s strong statutory policy favoring advancement, and its
uniform case law broadly and liberally interpreting mandatory
advancement provisions, render it unnecessary to resolve that
ambiguity.” (P1. Mot. 4).’
I thoroughly considered Aleynikov’s public policy argument in my
opinion awarding Aleynikov summary judgment on the advancement
claim. (ECF No. 174). Indeed, I agreed with him that Delaware has a
strong policy in favor of advancement of fees. Two judges of a three-judge
panel of the United States Court of Appeals for the Third Circuit,
however, found that I had erred in awarding summary judgment. The
dissenting opinion of Judge Fuentes expresses disagreement with the
majority holding, but only confirms that the public policy issue was
placed before, and considered by, that Court.
To be sure, the majority opinion does not explicitly discuss
Delaware’s pro-advancement public policy. The majority’s substantive
discussion, however, begins with this sentence: “The propriety of the
I consider the record compiled on the earlier summary judgment motion
to be incorporated by reference on this motion, Because the facts and
procedural history of this case are amply discussed in earlier opinions, I do not
summarize them here.
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District Court’s grant of summary judgment in Aleynikov’s favor hinges
on the interpretation of the term officer.” 765 F.3d at 358. The majority
treated the interpretation issue as fundamental; it did not approach the
interpretation issue as but one of two alternative means of skinning this
cat. Both the reasoning of the majority and its holding made two things
clear: (1) the task of this district court is to resolve the ambiguity as to
the term “officer”; and (2) the state of the record does not permit that
ambiguity to be resolved on summary judgment. See Id. at 367—68.
I am confirmed in that conclusion by the dissenting opinion of
Judge Fuentes. Judge Puentes first states that the term “officer” is
ambiguous, but states his belief “that Delaware has clearly stated the
rule for deciding between competing interpretations of an ambiguous
term: courts should construe the ambiguous term in the corporate
instrument against the drafter....” 765 F.3d at 368. Woven through the
rest of the dissent is a discussion of Delaware’s strong public policy in
favor of advancement. The tenor throughout, however, is that
consideration of public policy should inform the court’s analysis and tip
it the other way: “I believe Delaware law compels this conclusion, as does
the public policy animating Delaware’s interpretation of governing
documents,” id. at 368; “applying [contra proferentem]

.

.

.

furthers

Delaware public policy by encouraging clearer drafting, and by protecting
the reasonable expectations of the relevant stakeholders,” id. at 371;
“[t]he distinction drawn by the majority not only lacks any basis in
Delaware law, it also lacks any clear policy rationale,” id. at 373
(Fuentes, J., dissenting). At any rate, the public policy issue that
Aleynikov raises now was at the very heart of the disagreement between
the majority and the dissent. And the dissenting view, by definition, did
not prevail.
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Parenthetically, I should note that my own opinion did not go so far as to
state that Delaware public policy made resolution of the ambiguity via contra

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Pursuant to Fed. R. App. P. 41, the Court of Appeals issued its
mandate and directed that the matter be remanded to this Court “for
further proceedings consistent with this opinion.” Id. at 367. This trial
court is obligated to follow the letter and spirit of that mandate without
deviation. United States v. Kennedy, 682 F.3d 244, 253 (3d Cir. 2012);

E.E.O.C. v. Kronos Inc., 694 F.3d 351, 362 (3d Cir. 2012), as amended
(Nov. 15, 2012); General Universal Systems, Inc. v. Hal, Inc., 500 F. 3d

444, 454 (5th Cir. 2007); Huffman v. Saul Holdings Ltd P’ship, 262 F.3d
1128, 1132 (10th Cir. 2001); United States v. Rivera—Martinez, 931 F.2d
148, 150 (1st Cir. 1991).3 I read the mandate as encompassing a
rejection of the proposition that, even setting aside contra proferentem,
Delaware public policy is a sufficient independent basis to award
summary judgment to Aleynikov.
Aleynikov urges that, under the Court of Appeals majority’s
approach, his urgent claim for advancement may become moot. (See P1.
Mot. 5). That reality, which informed my now-reversed decision,
furnishes no basis to disregard or circumvent the appellate court’s
mandate, which will guide the remainder of the case.
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proferentem superfluous. Like Judge Fuentes, I regarded public policy as, inter
alia, a strong indicator that Delaware law would favor the employment of contra
proferentem in this context.
The mandate rule contains a limited exception for the case of changed
factual circumstances or a change in the law. See In re Pharmacy Benefit
Managers Antitrust Litig., 582 F.3d 432, 439 (3d Cir. 2009); Invention
Submission Corp. v. Dudas, 413 F.3d 411, 4 14—15 (4th Cir. 2005); EEOC v.
Sears, Roebuck & Co., 417 F.3d 789, 796 (7th Cir. 2005); United States v. Bell,
988 F.2d 247, 251 (1st Cir. 1993). No such claim is made here, however;
Aleynikov reasserts a legal theory that he had pressed previously, presenting it
as an alternative.
3

I am sympathetic to Aleynikov’s concerns, but the obstacle he faces—like
so many issues in diversity cases—may ultimately come down to an Erie issue.
Delaware law provides an advancement remedy, and its Courts of Chancery
provide a summary procedure that may assist in invoking it. DGCL § 145(k). As
I held earlier, however, Erie does not permit a federal court to adopt state
summary procedures (ECF No. 44 at 23-24; ECF No. 174 at 29-30 n.18). AS a
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II.

CONCLUSION

Accordingly, based on this Opinion, and for good cause shown;

IT IS this 16th day of January, 2015,
ORDERED that Plaintiff’s renewed motion for summary judgment
(ECF No. 263) is DENIED.

Q_
Kevin McNulty
United States District Judge

practical matter, the federal court options may be limited to summary judgment
or trial—procedural tools not designed with state provisional remedies
specifically in mind. And the Court of Appeals has now held that contra
proferentem, at least under these circumstances, is not available as a work
around.
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