Why the Supreme Court was Right Last Week to Deny Review of the Pennsylvania Supreme Court Decisions Handed Down Prior to the 2020 Election

VIKRAM DAVID AMAR, JASON MAZZONE

Illinois Law dean Vikram David Amar and professor Jason Mazzone argue that the U.S. Supreme Court correctly denied review last week of the Pennsylvania Supreme Court decisions handed down before the 2020 election. Dean Amar and Professor Mazzone explain why the majority denied review and point out that the dissenting opinions unwittingly demonstrate the rightness of the majority.

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LCT Capital, LLC v. NGL Energy Partners LP

Docket: 565 568, 2019

Opinion Date: March 4, 2021

Judge: Montgomery-Reeves

Areas of Law: Business Law, Civil Procedure, Contracts

In 2014, appellant and cross-appellee LCT Capital, LLC (“LCT”) helped appellee and cross-appellants NGL Energy Partners, LP and NGL Energy Holdings LLC (collectively, “NGL”) acquire TransMontaigne, a refined petroleum products distributor. LCT played an "unusually" valuable role in the transaction. The transaction generated $500 million in value for NGL, more than double the $200 million price that NGL paid to acquire TransMontaigne. NGL’s CEO Mike Krimbill represented on several occasions that LCT would receive an unusually large investment banking fee, but the parties failed to reach an agreement on all of the material terms. After negotiations broke down completely, LCT filed suit seeking compensation for its work under several theories, including quantum meruit and common law fraud. At trial, LCT presented a unitary theory of damages that focused on the value of the services that it provided, measured by the fee that Krimbill proposed for LCT’s work. Nonetheless, the jury verdict sheet had two separate lines for damages awards, one for the quantum meruit claim and another for the fraud claim. The jury found NGL liable for both counts, awarded LCT an amount of quantum meruit damages equal to a standard investment banking fee, and awarded LCT a much larger amount of fraud damages approximately equal to the unusually large fee that Krimbill proposed. Following post-trial briefing, the superior court set aside the jury’s awards and ordered a new trial on damages. LCT and NGL both filed interlocutory appeals of the superior court’s order. On appeal, LCT argued that benefit-of-the-bargain damages were available without an enforceable contract. On cross-appeal, NGL argued the superior court erred by ordering a new trial on damages because the jury’s quantum meruit award fully compensated LCT for its harm. NGL also argued it was entitled to judgment as a matter of law on the fraud claim. Finally, NGL argued the superior court provided the jury with erroneous fraudulent misrepresentation jury instructions. After review, the Delaware Supreme Court found LCT was not entitled to benefit-of-the-bargain damages and that the Superior Court did not abuse its discretion by ordering a new trial on quantum meruit damages. Nonetheless, the Supreme Court also held the superior court abused its discretion by ordering a new trial on fraud damages because LCT did not assert any independent damages to support its fraud claim. Accordingly, the Court affirmed in part and reversed in part the superior court’s judgment.