Books and Records Litigation: The Precursor to Derivative and Class Actions

Article

Stephen C. Norman

I.  Introduction

At the repeated prodding of the Delaware Supreme Court, a request for corporate books and records pursuant to Section 220 of the Delaware General Corporation Law (8 Del. C. § 220, or “Section 220”) has become the precursor to filing of derivative and even class litigation.[1]  If your company receives such a demand, it may well mean that the other shoe is about to drop and that the company and/or its directors will be sued in a class or derivative action.  As a result, Section 220 demands should be handled carefully.  This article provides an overview of Section 220 and discusses its recent rebirth as a herald of future litigation.

II.  Overview of Section 220

Stockholders of Delaware corporations have the general right to inspect the corporation’s books and records.[2]  To take advantage of this right to inspection, a stockholder must follow the procedures detailed in Section 220.[3]  In order to obtain corporate books and records, a stockholder must make a written demand “under oath”[4] for inspection on the corporation.[5]  Section 220 sets forth the form and manner in which a stockholder must make a demand.[6]  In particular, the stockholder must demonstrate that it is, in fact, a stockholder, and that it has a proper purpose.[7]  The company has five (5) business days to respond or the demand is deemed rejected.[8]  The stockholder may sue in the Court of Chancery to compel the company to allow inspection.[9]

Formerly, Section 220 was primarily used by would-be derivative plaintiffs to obtain corporate books and records as a precursor to litigation.  Increasingly, however, class plaintiffs have also used Section 220 in the same way.  A good example involves The Walt Disney Company.  In February 2003, Comcast Corporation made an unsolicited offer to acquire Disney.  The market price of Disney’s stock rose above the offering price and, accordingly, the Disney Board rejected the Comcast offer.  The rejection was met with the typical flood of stockholder class actions.  What, however, was unusual was that certain class plaintiffs also filed Section 220 demands and then filed suit after their demands were rejected.  Ultimately, these cases died on the vine when the Comcast offer was subsequently withdrawn.  These cases, however, signal a new strategy by class plaintiffs that will likely be seen again in the future. 

A.  Proper Purpose

A key issue in Section 220 litigation is whether the inspection is sought for a proper purpose.  To determine whether an inspection is being sought for a proper purpose, the court must consider whether the inspection is “reasonably related” to the stockholder’s interests.[10]  A proper purpose, however, may not be adverse to that of the corporation.[11] 

Although there is no specific limitation in the statute or case law, a proper purpose has been recognized in two primary circumstances.  The first is to value one’s stock. [12]  This is generally available to stockholders of small, non-public corporations.  However, without a present need for such a valuation, an inspection may be denied.[13]  The second is to investigate purported corporate mismanagement or wrongdoing.[14]  As long as there exists “‘some credible basis’” to support an inference of wrongdoing or mismanagement by the corporation, the proper purpose requirement of Section 220 will be met.[15] 

In Security First v. U.S. Die Casting & Development Co., Security First Corporation (“Security First”) entered into a merger agreement with another company that was terminated two months later.[16]  The termination of the merger agreement was followed by a significant drop in the stock price of Security First.[17]  The drop in stock price, in turn, gave rise to a Section 220 demand by a disgruntled stockholder to inspect Security First books and records related to the merger and its termination.[18]  Security First refused to comply with the demand.[19]  A trial ensued resulting in an order entered whereby the Court of Chancery granted the inspection of the books and records.[20] 

On appeal to the Delaware Supreme Court, Security First argued that the stockholder’s purpose articulated at trial was insufficient and that the Court of Chancery should not have considered any evidence beyond the stockholder’s own testimony in determining whether he had a proper purpose.[21]  The Supreme Court rejected this argument and held that the trial court could properly rely on all of the evidence presented at trial and stated, “[t]he failure of plaintiff’s key witness to articulate certain ‘magic words’ while testifying at trial [was] not fatal to [the] Section 220 action.”[22]

Security First further argued that the inspection should have been denied on the ground that the plaintiff failed to produce any evidence of mismanagement.[23]  The Supreme Court held that the stockholder had the burden of proof to demonstrate a proper purpose, but was not required to prove by a preponderance of the evidence that waste and mismanagement were actually occurring.[24]  The Supreme Court acknowledged that the threshold for a plaintiff in a Section 220 case is not insubstantial and that mere curiosity or desire for a fishing expedition will not suffice.[25] 

In Freund v. Lucent Technologies, Inc.,[26] the stockholder plaintiff asserted that his purpose was to investigate waste and mismanagement relating to the company’s financial statements.  The company was accused of providing false financial statements that overstated its revenues and net income.  The Court of Chancery noted that investigating misconduct identified in an SEC order was “sufficiently concrete” evidence that there was possible mismanagement.[27]  The court further noted that although the stockholder’s purpose was proper according to Delaware law, it could not be adverse to the best interests of the corporation itself.[28]  After holding that the stockholder’s purpose was proper and not adverse to the corporation, the court analyzed the scope of the stockholder’s inspection right.[29]  It found that the plaintiff had presented credible evidence of extensive waste and mismanagement.  As a result, it held that plaintiff was entitled to some leeway in the scope of the books and records sought by the stockholder.  Based on this, the court ordered the company to produce approximately 16 out of 18 categories of documents. 

Once a proper purpose has been established, any other purpose that the stockholder may have is irrelevant to the court’s analysis.[30]  In Skouras v. Admiralty Enterprises, Inc., the asserted purpose of the Section 220 demand was to substantiate fears of the existence of mismanagement of the closely held company; namely, the suspected use of assets by officers and directors for their personal advantage.[31]  The plaintiff sought production of books and records encompassing a wide range of corporate wrongdoings.[32]  The corporation opposed the demand, claiming that the plaintiff sought inspection for the improper purpose of harassing the company in hope of eliciting an offer to purchase his stock at a premium.[33]  The Court of Chancery held that the plaintiff’s primary purpose for seeking inspection was proper and that the mere possibility of using information acquired to harm the corporation was not grounds to defeat the demand or place restrictions on the right of inspection.[34] 

The courts should take care to prevent Section 220 demands from being abused.  The right to inspect books and records is not the equivalent to discovery in a civil action.  Thus, before inspection the court should insist that the stockholder allege facts or culpable wrongdoing.  A stockholder should not be permitted to inspect books and record just because the stockholder wants to see if the directors complied with their fiduciary duties.  Similarly, an inspection should not be permitted because the stockholder does not agree with a specific action taken by the directors.  Without such a threshold, Section 220 will be turned on its head and become another discovery tool. 

B.  Scope of Inspection

A stockholder does not have an open-ended entitlement to corporate books and records.[35]  Only those records that are “essential and sufficient” to the stockholder’s purpose will be included in a court-ordered inspection.[36]  For example, a stockholder is entitled to documents that are “reasonably required to satisfy the purpose of demand.”[37]  It is important to remember, however, that a Section 220 demand is not a substitute for discovery.  Consistent with this, the inspection should be limited to only those documents necessary to carry out the stockholders’ purpose in making the demand.  Absent compelling circumstances, the company should not have to scour its files to locate every document relating to a challenged transaction.

The Security First court held that the plaintiff bears the burden of proving that each category of books and records is essential to the accomplishment of the stockholder’s articulated purpose for the inspection.[38]  While the Court of Chancery found that the stockholder’s request for inspection was “self-tailored,” the Supreme Court disagreed.  It found that the stockholder did not meet its burden to establish that each category was essential and sufficient to its stated purpose.[39]  The Supreme Court noted that the scope of production ordered by the Court of Chancery was more akin to a comprehensive discovery order under Court of Chancery Rule 34 than a Section 220 order.[40]  The Supreme Court further held that “[a] Section 220 proceeding should result in an order circumscribed with rifled precision.”[41]  Consequently, the scope of an inspection of books and records ordered by the Court of Chancery should be narrow.

In Forsythe v. CIBC Employee Private Equity Fund (U.S.) I, L.P.,[42] plaintiff unitholders of a limited partnership brought an action seeking to inspect the books and records of the partnership pursuant to 6 Del. C. § 17-305 (the limited partnership analog to Section 220).  While the court found that plaintiffs had established a proper purpose, it also found that the scope of plaintiffs’ demand was too broad.  Specifically, the court ruled that the plaintiffs were not entitled to any books and records of a non-party entity, CIBC, who they alleged to be the parent or alter ego of the limited partnership’s general partner.[43]

The fact that a stockholder did not obtain her stock until after the beginning of the period for which she is seeking production is not a bar to inspection.  The Delaware Supreme Court has held that the date of a stockholder’s purchase of the stock “should not be used as an automatic ‘cutoff’ date in a § 220 action,” even where the only purpose is to gather information to bring a derivative suit.[44]  The court reasoned that the potential derivative claim could involve a “continuing wrong that both predates and postdates the stockholder’s purchase date.”[45]  The court further reasoned that a stockholder could use the information obtained pursuant to a 220 demand to communicate with other stockholders.  Thus, according to the court, such books and records could be necessary and essential to the stockholder’s purpose.[46]

It is also important to remember that the court is required under Section 220 to protect the interests of the corporation.  Exercising this authority, the courts have frequently conditioned inspection rights on the execution of a confidentiality agreement.  In Disney v. The Walt Disney Co.,[47] Roy Disney sought to have the court lift the confidentiality restriction placed on documents he received from The Walt Disney Company pursuant to a Section 220 demand.  The court reviewed the disputed documents in camera and found them to be confidential.  The court further found that that potential harm from public disclosure of the documents outweighed the benefit of public disclosure.[48]  The court took note of the risk posed by possible selective disclosure by a stockholder of a publicly traded company’s internal documents:

Mr. Disney’s proposed selective release of documents or excerpts of documents regarding the board’s deliberations would place the Company in an untenable position.  Mr. Disney, acting qua stockholder, has no fiduciary obligation to make complete or candid disclosures.  Instead, he would be free to disclose snippets of information culled from a few emails or internal memoranda that, he contends, are inconsistent with the corporation’s public disclosures  or otherwise evidence misconduct of some sort.  His public disclosure of that information would lead the Company to disclose even more otherwise non-public information in order to put Mr. Disney’s disclosures in, what the corporation believes to be, the proper context.  There is no reason to believe that such a process would necessarily advance the best interests of the corporation or its stockholders.[49]

Accordingly, the court rejected Roy Disney’s request that the restricted documents be made public.

As in Disney, an appropriate confidentiality agreement can allow the stockholder to be given access to the company’s books and records while at the same time protecting the company and its other stockholders by preventing its internal documents from being publicly disseminated.  Accordingly, consideration should be given to allowing a stockholder to inspect the company’s books and records if the stockholder will sign an appropriate confidentiality agreement.[50]  It should be remembered, however, that such an agreement will not preclude a stockholder from bringing an action against the company’s directors and/or officers based on the books and records obtained pursuant to Section 220.

III.  Section 220’s Role in Derivative Actions

In recent years, the Delaware courts have repeatedly encouraged stockholders to utilize Section 220 prior to filing a derivative action in order to meet the heightened pleading requirements of Rule 23.1.[51]  The requirement to plead demand futility is a difficult one, and the courts have used Section 220 in an effort to reduce this burden.  Consistent with this, the Delaware courts have refused to dismiss deficient actions outright, but have granted leave to replead after obtaining books and records.  Taking this advice, a number of plaintiffs have been able to resuscitate defective derivative actions.[52] 

The reason for this approach is the Supreme Court’s belief that Section 220 proceedings are very important to Delaware corporate governance and that stockholders have a right to at least a limited inquiry into books and records when they have established some credible basis to believe that there has been wrongdoing.[53]  The court also noted that a Section 220 proceeding might serve a valuable mission as a prelude to a derivative suit.[54]  The court reasoned that the trial court must strike proper balance between the right to books and records and an indiscriminate fishing expedition.[55]  The courts have also acknowledged that the utilization of Section 220 prevents the expensive and time-consuming procedural machinations often associated with the filing of a deficient derivative complaint.[56] 

The Supreme Court’s recent decision in Beam v. Stewart[57] exemplifies this approach.  There, the court reasoned that the plaintiff’s failure to plead sufficient facts to support a claim of demand futility may have been partially attributed to the plaintiff’s “failure to exhaust all reasonably valuable means of gathering facts.”[58]  The Supreme Court acknowledged that the Court of Chancery correctly noted that if the plaintiff would have first filed a Section 220 action, the plaintiff might have uncovered facts that would have supported a demand futility claim.[59]  The court noted that documents related to the corporation’s process of nominating board members and minutes of the board’s meetings could have been potentially helpful to the plaintiff in meeting the requirements of Rule 23.1.[60]  The court also noted that it is important to use Section 220 to gather information, because generally plaintiffs are not entitled to discovery for the purpose of demonstrating demand futility.[61]  The case was dismissed without prejudice and allowed plaintiffs to replead following the institution of the Section 220 action. 

From January 2003 through November 2004 there have been close to ninety “books and records” complaints filed in the Delaware Court of Chancery.[62]  In fact, many of those complaints were filed by small firms that work primarily on a contingency basis.  Thus, the only advantage they have to gain from a Section 220 action is the information they need to file a derivative suit.  Presumably, this means that stockholders and the plaintiffs’ bar are following the advice of the Delaware courts.

IV.  Privilege Defenses

Where a stockholder seeks an inspection pursuant to Section 220 for the purpose of investigating possible corporate mismanagement or wrongdoing, a corporation may assert certain privileges in opposition to the demand for an inspection.  Specifically, Delaware courts have analyzed the work product doctrine, the attorney client privilege, and the self-critical analysis privilege as possible arguments that may be advanced in such cases.[63]  In fact, the Court of Chancery recently reiterated that application of the work product doctrine and the attorney-client privilege is appropriate, and that a stockholder’s right to inspect a corporation’s books and records under Section 220 does not “‘open the door to the wide ranging discovery that would be available in support of litigation.’”[64] 

A.  The Attorney-Client Privilege

The attorney-client privilege protects against the disclosure of “confidential communications made for the purpose of facilitating the rendition of professional legal services to the client….”[65]  Even if material is privileged, however, a plaintiff may seek to demonstrate that “good cause” exists as to why the privilege should not attach.[66]  The court, when evaluating whether “good cause” exists, will analyze the issue using the factors set forth in Garner v. Wolfinbarger.[67]  In the context of a books and records action, the court will specifically consider five of the factors enumerated in Garner.[68]  Those factors considered are (i) the number of shares owned by the stockholder and the percentage stock those shares represent, (ii) the assertion of a colorable claim, (iii) the necessity of the information and its availability from other sources, (iv) whether the stockholder has identified the information sought and is not merely fishing for information, and (v) whether the communication is advice concerning the litigation itself.[69] 

For instance, in Saito, the court addressed the attorney-client privilege with respect to three kinds of documents: (1) those containing pre-transaction legal advice; (2) those containing post-transaction legal advice; and (3) post-transaction documents prepared by in-house counsel.[70]  With respect to the documents containing pre-transaction legal advice, the court held that although the attorney-client privilege applied, the plaintiff demonstrated “good cause” and therefore the privilege was overcome.  The court reasoned that (i) the small number of shares owned by the plaintiff was entitled to little weight, (ii) the plaintiff had asserted a colorable claim, (iii) the information could not be obtained elsewhere and it was “relevant and necessary to determine what the board relied upon,” (iv) the plaintiff sought specific information and was not “fishing,” and (v) the legal advice contained in the documents was not addressed to the litigation at hand.[71]  Nevertheless, the court denied the plaintiff access to the documents containing post-transaction legal advice and post-transaction documents prepared by in-house counsel based upon both the attorney-client privilege and the work product doctrine.  The court held that the plaintiff already had access to the underlying information through other documents that had been provided to the plaintiff, and that the legal advice contained in the documents at issue related to the litigation at hand.

B.  The Work Product Doctrine   

The work product doctrine generally bars the discovery of materials created in anticipation of litigation.[72]  There are two types of attorney work product: non-opinion work product and opinion work product.[73]  Non-opinion work product consists of factual and/or historical information, whereas opinion work product consists of the conclusions, impressions, opinions and legal theories of a party’s attorney.[74]  In order to obtain non-opinion work product, the party seeking such information must demonstrate a “substantial need” for the information, and an inability to access the substantial equivalent of the information without “undue hardship.”[75]  For opinion work to be obtained, however, a higher burden must be met – the information must be directed toward a pivotal issue in the matter at hand, and the need for the information must be “compelling.”[76]  Unlike the attorney-client privilege discussed above, there is no “good cause” exception to the work product doctrine.[77]

In Saito, the Court of Chancery held that certain documents, gathered in the course of an internal investigation by the company’s counsel, were protected by the work product doctrine.[78]  Most of the court’s analysis focused on whether the company waived the work product privilege by sharing some of the documents with the SEC.  The court held that while the privilege had been waived with respect to the documents shared with the SEC before a confidentiality agreement was in effect, the privilege remained intact with respect to the remaining investigation documents.[79]

Likewise, in Grimes, the court held that the plaintiff was not entitled to interview summaries prepared by the defendant’s counsel.[80]  The court further held, however, that the plaintiff was entitled to inspect, among other documents, the special committee’s final investigation report, as well as special committee meeting minutes, and minutes of meetings of the full board at which the recommendations of the special committee were considered and approved.[81]  The court held that the privilege was overcome because the plaintiff had a substantial need for the documents and that he was otherwise unable to obtain the substantial equivalent of those documents.[82] 

C.  The Self-Critical Analysis Privilege

The self-critical analysis privilege protects “confidential, non-factual deliberative material, including recommendations or opinions resulting from internal investigations, reviews or audits.”[83]  While “Delaware courts have thus far refused to recognize [this] privilege[,]” courts recognizing the privilege apply a four factor test: (1) whether the information results from a self-critical analysis; (2) whether the information has remained, or was intended to remain, confidential; (3) whether the public has a strong interest in protecting the free flow of such information; and (4) whether the public has a strong interest would be curtailed if the information were discoverable.[84]  The self-critical analysis privilege is typically advanced with respect to reports prepared in response to governmental investigation.[85]  

V.  Conclusion

A Section 220 Demand is now the first step towards what could very likely become protracted and expensive derivative, and even class litigation.  The Delaware courts have encouraged stockholders to utilize Section 220 as a vehicle to meet the pleading requirements under Rule 23.1.  Stockholders are now following this advice and it is very likely that even more Section 220 demands will be filed in the future. 

Notes:

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[1] See In re J.P. Morgan Chase & Co., 2005 WL 1076069, at *8 (Del. Ch.) (noting plaintiffs’ failure to pursue Section 220 demand notwithstanding the “frequent admonitions of the Delaware Supreme Court and the Court of Chancery” to do so in support of a derivative claim).

[2] See Saito v. McKesson HBOC, Inc., 806 A.2d 113 (Del. 2002).

[3] Id; see 8 Del. C. § 220.

[4] 8 Del. C. 220 was amended in 2003 to provide that the phrase “‘[u]nder oath’ includes statements the declarant affirms to be true under penalty of perjury under the laws of the United States or any state.”  8 Del. C. §220(a)(4).  Thus, a demand no longer needs to be notarized.

[5] 8 Del. C. § 220. 

[6] See 8 Del. C. § 220(b).

[7] Id.  The stockholder may be either a record or beneficial holder. 

[8] See 8 Del. C. § 220(c). 

[9] Id.

[10] 8 Del. C. § 220(b); Saito, 806 A.2d at 117; Helmsman Mgmt. Servs., Inc. v. A&S Consultants, 525 A.2d 160, 165 (Del. Ch. 1987).

[11] See 8 Del. C. § 220(b).

[12] Id.

[13] See Helmsman, 525 A.2d at 165.

[14] Freund v. Lucent Techs., Inc., 2003 WL 139766 (Del. Ch.).

[15] Lucent, 2003 WL 139766, at *3 (citing Thomas & Betts Corp. v. Leviton Mfg. Co., 681 A.2d 1026, 1031 (Del. 1996)).

[16] Sec. First Corp., 687 A.2d at 565.

[17] Id. at 566.

[18] See id.

[19] Id.

[20] Id.

[21] Id. at 567.

[22] Id.

[23] Id. at 568.

[24] Id.

[25] Id.

[26] 2003 WL 139766 (Del. Ch.).

[27] Id. at *3.

[28] Id. at *4.

[29] Id. at *5.

[30] 8 Del. C. § 220 (c); CM & M Group, Inc. v. Carroll, 453 A.2d 788, 792 (Del. 1982); Skouras v. Admiralty Enters., Inc., 386 A.2d 674 (Del. Ch. 1978); Skoglund v. Ormand Indus., Inc., 372 A.2d 204, 207 (Del. Ch. 1976).

[31] Id.

[32] Id. 

[33] Id. 

[34] Pursuant to Section 220, the court is authorized to place reasonable restrictions on a stockholder’s inspection right.  8 Del. C. § 220(d).  This usually takes the form of a non-disclosure agreement.  See, e.g., Freund v. Lucent Techs., supra (allowing inspection subject to an appropriate confidentiality agreement). 

[35] BBC Acquisition Corp. v. Durr-Fillauer Med., Inc., 623 A.2d 85, 88 (Del. Ch. 1992).

[36] Helmsman, 525 A.2d at 167 (citations omitted).

[37] E.g., Amalgamated Bank v. UICI, 2005 WL 1377432, at *1 (Del. Ch.); Lucent, 2003 WL 139766, at *4; Carapico v. Philadelphia Stock Exchange, Inc., 791 A.2d 787, 792 (Del. 2000)). 

[38] Sec. First Corp., 687 A.2d at 569 (citing Thomas & Betts Corp., 681 A.2d at 1035).

[39] Sec. First Corp., 687 A.2d at 569-70.

[40] Id. at 570.

[41] Id.

[42] 2005 WL 1653963 (Del. Ch.).

[43] Id. at *7.

[44] Saito, 806 A.2d at 117.

[45] Id. 

[46] Id.

[47] 2005 WL 1538336 (Del. Ch.).

[48] Id. at *4-5.

[49] Id. at *4.

[50] See Cohen v. El Paso Corp., 2004 WL 2340046, at *2 (Del.Ch.).

[51] White v. Panic, 793 A.2d 356, 364-65 (Del. Ch. 2000), aff’d, 783 A.2d 543 (Del. 2001); Brehm v. Eisner, 746 A.2d 244, 266-67 (Del. 2000); Lucent, 2003 WL 139766, at *4; Beam v. Stewart, 833 A.2d 961, 981 (Del. Ch. 2003), aff’d, 845 A.2d 1040 (Del. 2004).

[52] See, e.g., In re The Walt Disney Co. Derivative  Litig., 825 A.2d 275 (Del. Ch. 2003) (denying a motion to dismiss based on amended complaint filed after plaintiff obtained documents pursuant to Section 220 demand)

[53] Security First Corp., 687 A.2d at 571.

[54] Id.

[55] Id. at 568.

[56] In re The Walt Disney Co. Derivative Litig., 825 A.2d 275 at 279 n.5.

[57] 845 A.2d 1040 (Del. 2004).

[58] Id. at 1056.

[59] Id.

[60] Id.

[61] Id.

[62] Including actions for books and records pursuant the relevant LLC and LP statutes.

[63] See Saito v. McKesson HBOC, Inc., 2002 WL 31657622 (Del. Ch.), aff’d, 818 A.2d 970 (Del. 2003) (ORDER); see also Grimes v. DSC Commc’ns Corp., 724 A.2d 561 (Del. Ch. 1998). 

[64] Khanna v. Covad Commc’ns Group, Inc., 2004 WL 187274, at 7 (Del. Ch.) (quoting Saito, 806 A.2d at 114-15).

[65] Del. Unif. R. Evid. 502(b).

[66] See Saito, 2002 WL 31657622, at *13 (citing Deutsch v. Cogan, 580 A.2d 100, 107 (Del. Ch. 1990)).

[67] 430 F.2d 1093, 1103-04 (5th Cir. 1970), cert. denied, 401 U.S. 974 (1971); see Saito, 2002 WL 31657622, at *13.

[68] Saito, 2002 WL 31657622, at *13 (citing Grimes, 724 A.2d at 568).

[69] Id.

[70] Id. at *12-15.

[71] Id.

[72] Saito, 2002 WL 31657622, at *3; see also Del. Ct. Ch. R. 26(b)(3). 

[73] Saito, 2002 WL 31657622, at *11-12.

[74] Id. 

[75] Id. at *11.

[76] Id. at *12.

[77] See In re Fuqua Indus. S’holders Litig., 2002 WL 991666, at *6 (Del. Ch.).

[78] Saito, 2002 WL 31657622, at *15.

[79] Id. at *12-15.

[80] Grimes, 724 A.2d at 567.

[81] Id. at 569-70.

[82] Id. at 570.

[83] See id. (citing Wylie v. Mills, 478 A.2d 1273, 1276 (N.J. Super. Ct. Law Div. 1984). 

[84] Id. at 570-71. 

[85] See Wealton v. Werner Enters., Inc., 2000 WL 33115690, at *3 (Del. Super. Ct.) (noting that “[m]any of those courts applying these factors usually dealt …with reports to government agencies.”).

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