FirstString Research, Inc. v. JSS Medical Research Inc.

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

FIRSTSTRING RESEARCH, INC., )
)
Plaintiff, )
v. ) C.A. No. 2020-0332-KSJM
)
JSS MEDICAL RESEARCH INC., )
)
Defendant. )

MEMORANDUM OPINION

Date Submitted: February 15, 2021
Date Decided: May 28, 2021

Myron T. Steele, John A. Sensing, Jesse L. Noa, POTTER ANDERSON & CORROON
LLP, Wilmington, Delaware; Cory E. Manning, NELSON MULLINS RILEY &
SCARBOROUGH LLP, Columbia, South Carolina; Carrie A. Hanger, NELSON
MULLINS RILEY & SCARBOROUGH LLP, Winston-Salem, North Carolina, Wesley T.
Moran, NELSON MULLINS RILEY & SCARBOROUGH LLP, Myrtle Beach, South
Carolina; Counsel for Plaintiff FirstString Research, Inc.

Steven L. Caponi, Matthew B. Goeller, K&L GATES LLP, Wilmington, Delaware;
Counsel for Defendant JSS Medical Research Inc.

McCORMICK, C.
 The defendant entered into an agreement to manage clinical studies for an

investigational new drug developed by the plaintiff. One of the studies was delayed and

ultimately terminated. The plaintiff filed this action for breach of contract alleging that the

defendant mismanaged the study in ways that contributed to its overall failure. In addition

to damages, the plaintiff seeks specific performance of the defendant’s obligation to

cooperate in winding down the study. After the plaintiffs filed this action, the defendant

filed mirror-image breach of contract claims against the plaintiff in the Superior Court of

the State of Delaware. In the Superior Court action, the defendant demanded a jury trial.

The defendant has moved to transfer this action to the Superior Court, arguing that the

plaintiff’s request for specific performance is pretextual and insufficient to vest this court

with subject matter jurisdiction. The defendant further argues that it has a constitutional

right to a jury trial on its mirror-image claims such that a transfer of this action is necessary.

This decision holds that the complaint, objectively viewed, discloses a genuine need

for equitable relief and that this court has jurisdiction over the entire action under the

equitable clean-up doctrine. Further, because this court has jurisdiction to hear and decide

the entirety of the plaintiff’s complaint, the defendant does not have a right to a jury trial

on its counterclaims. The defendant’s motion to transfer is denied.

I. FACTUAL BACKGROUND

The facts are drawn from the Verified Complaint (the “Complaint”) 1 and documents

it incorporates by reference.

1
C.A. No. 2020-0332-KSJM, Docket (“Dkt.”) 1, Verified Compl., Filed on Behalf of Pl.
FirstString Research, Inc. (“Compl.”).
 A. The Agreement

FirstString Research, Inc. (“FirstString” or “Plaintiff”) is a biopharmaceutical

company that “specializes in developing treatments for diseases associated with

dysregulation of inflammatory processes and modulation of injury response.” 2 FirstString

developed a drug called “Granexin Gel (ACT1 Peptide)” (“Granexin”), which received

investigational new drug approval from the United States Food and Drug Administration. 3

JSS Medical Research Inc. (“JSS” or “Defendant”) is a contract research

organization that conducts clinical research studies. 4

By a Master Services Agreement dated February 19, 2018 (the “Agreement”), 5

FirstString retained JSS as a general contractor to “provide clinical research, data

management and project management” for various clinical research studies. 6

The Agreement stated that “[a]ll data developed relating to a study” is “the sole and

exclusive property of [FirstString].” 7 In the event of termination, the parties agreed that

“JSS shall transfer to [FirstString] all Developments including any and all copies and/or

derivatives hereof, made by JSS . . . as well as any writings, drawings, specifications,

manuals or other printed material made by JSS . . . to the extent . . . not already transferred

2
Id. ¶¶ 1, 6.
3
Id. ¶ 7.
4
Id. ¶¶ 2, 11.
5
Compl. Ex. A (“Agreement”).
6
Id. ¶ 2; Compl. ¶ 13.
7
Agreement ¶ 17.7.

2
prior to expiration or termination.” 8 The parties further agreed “that termination of this

[Agreement] and/or any Work Order in progress will require discussion and co-ordination

to ensure subject safety, continuity/discontinuity of treatment, and compliance with local

and/or national regulations.” 9

B. The Work Order

The Agreement contemplated that JSS would perform numerous clinical studies and

that the parties would execute a work order outlining specific project requirements and

terms of compensation for each individual study.

On February 20, 2018, FirstString and JSS executed a work order (the “Work

Order”) 10 governing a “GAIT Study,” which “focused on the safety and efficacy of

Granexin for the treatment of diabetic foot ulcers.” 11

The Work Order incorporated the Agreement by reference, noting that “the

[Agreement] and this Work Order with its Schedules shall be read, taken and construed as

one and the same agreement.” 12 It provided details of the GAIT Study’s objectives and

design, including the number and types of patients, the types of treatments, the desired

endpoints, and the methods of statistical analysis to be used. It included a total study budget

8
Id. ¶ 17.6.
9
Id. ¶ 12.6.
10
Compl. Ex. B (“Work Order”).
11
Compl. ¶ 12.
12
Work Order ¶ 5.

3
of almost $6.5 million, a 35-month study timeline, and a payment plan entitling JSS to

milestone payments during the study.

C. The Amendment

Two problems arose early in the GAIT Study. The first problem was a delay due in

part to insufficient patient recruitment. Plaintiff alleges that JSS contributed to the delay

by providing insufficient site monitoring and generally mismanaging the project.

The second problem involved nonpayment to third parties. Pursuant to the

Agreement and Work Order, FirstString had transferred funds to JSS throughout the GAIT

Study to pay third-party clinical sites for their services. FirstString, however, began to

receive complaints from those clinical sites indicating that “JSS had failed to pay their

invoices in a timely manner.” 13

In an effort to put the GAIT Study back on course and address nonpayment issues,

the parties amended the Agreement and Work Order on April 9, 2019 (the

“Amendment”). 14

The Amendment removed FirstString’s obligation to pay JSS for “all amounts owed

for the Services performed by it” in the event the Agreement or any Work Order “is

terminated for any reason.” 15 It further added $500,000 in “additional start-up funds” to

13
Compl. ¶ 24.
14
Compl. Ex. D (“Amendment”).
15
Id. ¶ 1.

4
the GAIT Study’s budget, payable upon execution of the Amendment. 16 Lastly, it

obligated JSS to pay third-party vendors in a timely manner and gave FirstString the right

to “terminate and transfer” the GAIT Study to another contract research organization if JSS

missed certain milestones specified in the Amendment. 17

D. The Termination

The Amendment did not put the GAIT Study back on course. According to Plaintiff,

JSS continued to miss deadlines and FirstString continued to receive complaints of

nonpayment by JSS from the GAIT Study’s third-party clinical sites. Shortly after

FirstString closed patient enrollment in February 2020, FirstString asked JSS for a revised

budget proposal detailing the cost of “all study termination and close out activities.” 18 The

parties, however, were unable to agree to a revised budget, and their relationship began to

devolve. On April 16, 2020, JSS threatened to suspend all activity on the GAIT Study. On

April 20, FirstString threatened to terminate “the North American portion of the Work

Order.” 19 On April 27, FirstString notified JSS that it was terminating the GAIT Study and

the Agreement, Work Order, and Amendment. FirstString further demanded that JSS turn

over access to electronic records from the GAIT Study.

16
Id. ¶ 2. The Complaint states that “FirstString . . . agreed to pay JSS another $500,000
in additional start-up funds,” but it does not say whether FirstString actually made the
payment. Compl. ¶ 28.
17
Amendment ¶¶ 5, 8.
18
Compl. ¶ 35.
19
Id. ¶ 39.

5
 To date, JSS has not turned over those records or assisted FirstString in winding

down the study per its obligations under the Agreement, the Work Order, and the

Amendment.

E. This Action

FirstString filed this action on May 5, 2020. The Complaint asserts three counts:

Count I for breach of contract; Count II for replevin; and Count III for conversion. In

addition to damages and return of its property, FirstString seeks “a permanent injunction

ordering JSS to [c]omply with its obligations under the [Agreement], Work Order, and

Amendment.” 20 FirstString asks that the court order JSS to “assist FirstString in properly

winding down the GAIT Study in a manner that protects the health and safety of the study

subjects . . . [and] which includes but is not limited to giving FirstString complete and

unfettered access to . . . study data and related study documents.” 21 FirstString also seeks

an accounting of the funds earmarked for third-party clinical sites.

F. The Superior Court Action

JSS sued FirstString on May 29, 2020, in the United States District Court for the

District of Delaware. 22 After realizing that the Agreement provides for venue only in courts

20
Id. at Prayer for Relief ¶ A.
21
Id. at Prayer for Relief ¶¶ A(i)–(iii). FirstString also seeks “a judgment in favor of
FirstString on all Counts” and an award of “its damages, costs, pre- and post-judgment
interest, and reasonable attorneys’ fees.” Id. at Prayer for Relief ¶¶ B–C.
22
Dkt. 16, FirstString Research, Inc.’s Answering Br. in Opp’n to Def.’s Mot. to Transfer,
Filed on Behalf of Pl. FirstString Research, Inc. (“FirstString Answering Br.”) Ex. C. JSS
filed in the District Court based on a misreading of the forum selection provision of the
Agreement as providing for venue in courts in the state of Delaware, not courts of the state
of Delaware. See Dkt. 19, JSS Medical Research Inc.’s Reply Br. in Supp. of Mot. to

6
“of the state of Delaware,” JSS voluntarily dismissed the federal action and filed a new

action against FirstString in the Superior Court of the State of Delaware on June 17, 2020

(the “Superior Court Action”). 23

In the Superior Court Action, JSS contends that FirstString failed to make necessary

payments and improperly interfered with JSS’s ability to conduct the GAIT Study,

resulting in the study’s failure and tarnishing JSS’s relationships with its third-party clinical

site partners. 24

JSS asserts three counts against FirstString: Count I for breach of contract; Count II

for tortious interference; and Count III for tortious interference with contractual relations.

JSS seeks damages and has demanded a “trial by jury on all issues so triable.” 25

G. The Motion to Transfer

On August 10, 2020, JSS moved to transfer this action to Superior Court pursuant

to 10 Del. C. § 1902 or, in the alternative, dismiss for lack of subject matter jurisdiction

pursuant to Court of Chancery Rule 12(b)(1). 26 As a further alternative, JSS moves to

transfer to the Superior Court all aspects of this case except for FirstString’s requests for

Transfer for Lack of Jurisdiction (“JSS Reply Br.”) at 10 (“JSS inadvertently misquoted
the language from the agreement. This typographical error was a mistake.”).
23
FirstString Answering Br. Ex. B (“JSS Compl.”).
24
See id. ¶¶ 37, 40, 43–45.
25
Id. ¶ 68.
26
Dkt. 9, Mot. to Transfer for Lack of Jurisdiction; see Dkt. 14, JSS Medical Research
Inc.’s Opening Br. in Supp. of Mot. to Transfer for Lack of Jurisdiction (“JSS Opening
Br.”) at 17.

7
equitable relief, which JSS contends could be stayed pending resolution of the legal and

factual disputes.

The parties fully briefed JSS’s motion, and the court heard oral argument on JSS’s

motion to transfer on October 28, 2020. 27 The court requested supplemental briefing on

November 17, 2020, 28 which the parties completed on February 15, 2021. 29

II. LEGAL ANALYSIS

This decision first evaluates whether FirstString’s request for specific performance

is sufficient to invoke this court’s subject matter jurisdiction. It then addresses whether

there is a basis for applying the clean-up doctrine to exercise jurisdiction over the entirety

of the action. It last addresses whether JSS’s demand for a jury trial in the Superior Court

Action affects the analysis.

A. The Court Has Subject Matter Jurisdiction Over FirstString’s Request
for Specific Performance.

“The Court of Chancery is a court of ‘limited jurisdiction’; it acquires subject matter

jurisdiction ‘only when (1) the complaint states a claim for relief that is equitable in

27
See FirstString Answering Br.; JSS Reply Br.; Dkt. 25, Oct. 28. 2020 Tr. of the Oral Arg.
via Zoom on Def.’s Mot. to Transfer for Lack of Jurisdiction.
28
Dkt. 24, Letter to Counsel from the Hon. Kathaleen St. J. McCormick Regarding Suppl.
Briefing.
29
See Dkt. 28, FirstString Research, Inc.’s Suppl. Br. in Opp’n to JSS Medical Research,
Inc.’s Mot. to Transfer, Filed on Behalf of FirstString Research, Inc. (“FirstString Opening
Suppl. Br.”); Dkt. 29, JSS Medical Research Inc.’s Opening Suppl. Br. in Supp. of Mot. to
Transfer for Lack of Jurisdiction (“JSS Opening Suppl. Br.”); Dkt. 32, FirstString
Research, Inc.’s Answering Br. in Opp’n to JSS Medical Research, Inc.’s Suppl. Br. in
Supp. of Its Mot. to Transfer (“FirstString Answering Suppl. Br.”); Dkt. 33, Answering Br.
in Opp’n to FirstString Research, Inc.’s Suppl. Br. (“JSS Answering Suppl. Br.”).

8
character, (2) the complaint requests an equitable remedy when there is no adequate

remedy at law or (3) Chancery is vested with jurisdiction by statute.’” 30 Plaintiff bears the

burden of establishing a basis for subject matter jurisdiction “as of the time the complaint

is filed.” 31 Jurisdiction should remain “unaffected by post-complaint developments.” 32

In determining jurisdiction, mere incantation of equitable relief is insufficient. This

court “will go behind the ‘façade of prayers’ to determine the ‘true reason’ for which the

plaintiff has brought suit.” 33 The court conducts a “realistic assessment of the nature of

the wrong alleged and the remedy available in order to determine whether a legal remedy

is available and fully adequate.” 34

30
Vama F.Z. Co. v. WS02, Inc., 2021 WL 1174690, at *2 (Del. Ch. Mar. 29, 2021) (quoting
Perlman v. Vox Media, Inc. 2019 WL 2647520, at *4 (Del. Ch. June 27, 2019) aff’d,
2021 WL 1042985 (Del. Mar. 18, 2021) (TABLE)); see also 10 Del. C. § 341 (“The Court
of Chancery shall have jurisdiction to hear and determine all matters and causes in
equity.”); id. § 342 (“The Court of Chancery shall not have jurisdiction to determine any
matter wherein sufficient remedy may be had by common law, or statute, before any other
court or jurisdiction of this State.”).
31
Wal-Mart Stores, Inc. v. AIG Ins. Co., 2006 WL 3742596, at *3 (Del. Ch. Dec. 12, 2006)
(quoting Giordano v. Marta, 1999 WL 350493, at *2 (Del. Ch. Apr. 28, 1999)); see
Lewis v. AimCo Props., L.P., 2015 WL 557995, at *2 (Del. Ch. Feb. 10, 2015) (“The
plaintiff ‘bears the burden of establishing this Court’s jurisdiction . . . .’” (quoting Yancey v.
Nat’l Tr. Co., 1993 WL 155492, at *6 (Del. Ch. May 7, 1993)).
32
Wal-Mart, 2006 WL 3742596, at *3.
33
Int’l Bus. Machs. Corp. v. Comdisco, Inc., 602 A.2d 74, 78 (Del. Ch. 1991) (quoting
Strickler v. Sussex Life Care Assoc., 541 A.2d 587 (Del. 1987)).
34
Candlewood Timber Gp., LLC v. Pan Am. Energy, LLC, 859 A.2d 989, 997 (Del. 2004)
(quoting McMahon v. New Castle Assocs., 532 A.2d 601, 603 (Del. Ch. 1987)) (holding
that this court “must look beyond the remedies nominally being sought, and focus upon the
allegations of the complaint in light of what the plaintiff really seeks to gain by bringing
his or her claim . . . in order to determine whether a legal remedy is available and fully
adequate”).

9
 The only claims asserted by FirstString are common law contract or tort claims that

are legal in nature and do not fall under any statute vesting this court with jurisdiction. 35

To establish subject matter jurisdiction, FirstString relies on its request for equitable relief

in the form of specific performance. 36

“Although specific performance is an equitable remedy upon which equity

jurisdiction might be predicated, that is true only if the complaint, objectively viewed,

discloses a genuine need for such equitable relief.” 37

FirstString discloses a genuine need for specific performance. FirstString

contracted with JSS to conduct the GAIT Study on its behalf. Part of JSS’s role was to

serve as point of contact with the clinical sites for the GAIT Study. JSS agreed that

termination of any Work Order in progress would “require discussion and co-ordination to

ensure subject safety, continuity/discontinuity of treatment, and compliance with local

35
See Graham v. State Farm Mut. Auto. Ins. Co., 565 A.2d 908, 911–12 (Del. 1989) (noting
that a party is “entitled to request a jury trial” in “an action known to the common law”);
see also In re Markel, 254 A.2d 236, 239 (Del. 1969) (holding that replevin is a legal
action); Helix Generation LLC v. Transcanada Facility USA, 2019 WL 2068659, at *2
(Del. Ch. May 10, 2019) (holding that claims for breach of contract and tort are legal
claims); GWO Litig. Tr. v. Sprint Sols., Inc., 2018 WL 5309477, at *11 (Del. Super.
Oct. 25, 2018) (holding that conversion is an intentional tort for which a legal remedy
exists).
36
FirstString also seeks “injunctive relief” but treats that request as functionally equivalent
to its request for specific performance. See FirstString Answering Br. at 16 (requesting
“specific performance and/or mandatory injunctive relief”). FirstString further seeks an
equitable accounting. Because FirstString’s prayer for specific performance is sufficient
to invoke the court’s jurisdiction, this decision does not address whether the request for
equitable accounting independently suffices.
37
Candlewood, 859 A.2d at 997.

10
and/or national regulations.” 38 At the time FirstString filed this action, JSS had not turned

over the GAIT Study records or coordinated with FirstString in winding down the study.

FirstString seeks specific performance “to require JSS to cooperate and assist in the

winddown of the GAIT Study.” 39 Objectively viewed, the complaint discloses a genuine

need for equitable relief.

JSS responds that FirstString’s legal claim for replevin supplies an adequate remedy

at law concerning FirstString’s rights to the GAIT Study data, 40 but this argument ignores

JSS’s coordination obligation that FirstString seeks to enforce. It is reasonably conceivable

that merely returning the GAIT Study data will not suffice to wind down the study and

transition the third-party relationships that JSS managed under the Agreement.

For these reasons, FirstString has adequately pled a claim for equitable relief

sufficient to invoke this court’s jurisdiction.

B. Exercising Ancillary Jurisdiction Over the Entire Complaint Is
Appropriate Under the Clean-Up Doctrine.

The analysis turns to whether the court should exercise ancillary jurisdiction under

the clean-up doctrine over Plaintiff’s legal claims and requests for relief.

“Fundamentally, once a right to relief in Chancery has been determined to exist, the

powers of the Court are broad and the means flexible to shape and adjust the precise relief

to be granted so as to enforce particular rights and liabilities legitimately connected with

38
Agreement ¶ 12.6.
39
FirstString Answering Br. at 17.
40
See JSS Opening Br. at 13–14.

11
the subject matter of the action.” 41 The “clean-up doctrine” gives this court ancillary

jurisdiction “to resolve purely legal causes of action that are before it as part of the same

controversy over which the Court originally had subject matter jurisdiction in order to

avoid piecemeal litigation.” 42

This court has described the policies underlying the clean-up doctrine as follows:

Some of the reasons why equity, once having acquired
jurisdiction over part of a controversy, will, in the Court’s
discretion, continue to exercise jurisdiction over the entire
controversy, even over those portions where there is an
adequate remedy at law are: to resolve a factual issue which
must be determined in the proceedings; to avoid multiplicity of
suits; to promote judicial efficiency; to do full justice; to avoid
great expense; to afford complete relief in one action; and to
overcome insufficient modes of procedure at law. 43

This court applies several factors in determining whether it will entertain ancillary

legal claims. Those factors are “whether retention of the claims will: 1) resolve a factual

issue which must be determined in the proceedings; 2) avoid a multiplicity of suits;

3) promote judicial efficiency; 4) do full justice; 5) avoid great expense; 6) afford complete

relief in one action; or 7) overcome insufficient modes of procedure at law.” 44

41
Wilmont Homes, Inc. v. Weiler, 202 A.2d 576, 580 (Del. 1964) (citing 1 John N.
Pomeroy, A Treatise on Equity Jurisprudence § 115 (5th ed. 1941) [hereinafter Pomeroy]).
42
Kraft, 145 A.3d at 974.
Getty Ref. & Mktg. Co. v. Park Oil, Inc, 385 A.2d 147, 150 (Del. Ch. 1978) (citing
43

Mackenzie Oil Co. v. Omar Oil & Gas Co., 120 A. 852 (Del. Ch. 1923); Pomeroy § 175).
44
Acierno v. Goldstein, 2004 WL 1488673, at *5 (Del. Ch. June 25, 2004) (citing Clark v.
Teeven Hldg. Co., 625 A.2d 869, 882 (Del. Ch. 1992)).

12
 These factors weigh in favor of exercising ancillary jurisdiction over Plaintiff’s legal

claims under the cleanup doctrine. The basis of Plaintiff’s request for specific performance

depends on the factual finding that JSS breached the Agreement. Because the Superior

Court is incapable of ordering specific performance, this court is uniquely situated to do

full justice and afford complete relief. Exercising this court’s ancillary jurisdiction will

avoid a multiplicity of suits and potentially inconsistent factual findings, thereby promoting

judicial efficiency and avoiding litigation expenses. As the parties agree, this matter is best

resolved by one court and should not proceed in piecemeal fashion. 45

C. JSS’s Demand for a Jury Trial in the Superior Court Action Does Not
Affect This Court’s Subject Matter Jurisdiction.

JSS acknowledges that the factors for applying the clean-up doctrine favor denying

its motion to transfer. JSS contends, however, that its “constitutional right to a jury

regarding FirstString’s legal claims . . . trumps the efficiency concerns underlying the

clean-up doctrine.” 46 In advancing this argument, JSS effectively pits its rights to a jury

trial against the policies underlying the clean-up doctrine, giving rise to the following

question: To what degree can this court’s exercise of ancillary jurisdiction abrogate a

litigant’s right to a trial by jury in a sister court?

The short answer, expressed in this court’s 2004 decision in Acierno v. Goldstein,

is that “a litigant is ‘not entitled to a Superior Court jury trial of claims that are cognizable

45
See FirstString Answering Br. at 10; JSS Opening Br. at 1–2.
46
JSS Opening Br. at 16.

13
in this Court.’” 47 In Acierno, the defendant argued that the exercise of ancillary jurisdiction

over its counterclaims would “violate his constitutional right to a jury trial” in civil actions

at law. 48 The court rejected this argument, describing it as calling for “a seachange to . . .

equity jurisprudence” and observing that “Delaware law has long recognized the Court of

Chancery’s ability to hear legal claims, which, if brought alone, could be tried to a jury in

Superior Court.” 49

A longer answer would be good fodder for a lengthy lecture on the rich history of a

right to jury trial and the scope of equitable jurisdiction under Delaware law. What follows

47
2004 WL 1488673, at *5 (quoting Pepsi-Cola Bottling Co. of Salisbury, Md. v. Handy,
2000 WL 364199 at *7 (Del. Ch. Mar. 15, 2000)); accord Getty, 385 A.2d at 150 (“This
Court has also clearly indicated that, once it has jurisdiction over a matter, it is discretionary
whether it will determine a factual issue without a jury if the issue is one which would
ordinarily be tried by jury at law.” (citing Mackenzie Oil, 120 A. 852)).
48
Acierno, 2004 WL 1488673, at *5.
49
Id.; see also Park Oil, Inc. v. Getty Ref. & Mktg. Co., 407 A.2d 533, 535 (Del. 1979)
(holding, in a slightly distinguishable context, that “[t]he right to a jury trial . . . applies to
an action at law; it does not apply in an equity suit,” and rejecting the claim that the Court
of Chancery’s grant of summary judgment abrogated appellant’s right to a jury trial);
Nichols v. Lewis, 2007 WL 1584622, at *1 (Del. Ch. May 24, 2007) (exercising discretion
to not apply the clean-up doctrine, noting that “I do not base my decision on a lack of power
on the part of this court to try the remaining claim without a jury” (emphasis added)); Eric
J. Hamilton, Federalism and the State Civil Jury Rights, 65 Stan. L. Rev. 851, 856 (2013)
[hereinafter Hamilton] (discussing courts of law and equity and explaining that “parties
only had a right to a jury in courts of law” and that “[l]itigating issues in both courts would
be expensive, time consuming, and problematic, so when the plaintiff desired both legal
and equitable relief, the chancery court (the court of equity) could decide legal issues
incidental to the equitable issues properly brought before the court under the equitable
cleanup doctrine . . . [and] parties could lose the right to a jury trial in some legal actions.”);
Pomeroy § 116 (“There are, however, classes of equitable suits in which the issues of fact
upon which the relief depends, are so intimately connected with the relief itself that their
decision is plainly beyond the competence of a jury, and must of necessity be left to the
court or judge.”).

14
is less of a lengthy lecture and more a pointed response to historical arguments raised by

the parties.

Article I, Section 4 of Delaware’s second Constitution, adopted in 1792, guarantees

its citizens the right to trial by jury “as heretofore,” 50 and Delaware’s highest appellate

court has interpreted this language to convey a right to trial by jury equivalent to that right

as it existed at common law in 1776. 51 Thus, the first step in the analysis focuses on one

snapshot in time—1776.

The predominant view is that, with some exceptions not applicable here, 52 the clean-

up doctrine took precedence over any right to a jury trial on civil claims as of 1776. For

50
Del. Const. of 1792, art. I, § 4 (1792); McCool v. Gehret, 657 A.2d 269, 282 (Del. 1995);
Claudio v. State, 585 A.2d 1278, 1298 (Del. 1991). The right to a jury trial in civil actions
in state courts is a matter of state law. See Walker v. Sauvinet, 92 U.S. 90, 92–93 (1875)
(holding that the Seventh Amendment to the United States Constitution is not applied to
the states through the Fourteenth Amendment). See generally Hamilton at 860–61
(discussing the ratification and history of the Seventh Amendment).
51
Claudio, 585 A.2d at 1297 (holding in the context of a criminal proceeding that this
provision “guarantee[s] the right to trial by jury as it existed at common law”); see also
Randy J. Holland, The Delaware State Constitution, A Reference Guide 30–33 (2002)
[hereinafter Holland] (“In construing [Article I, Section 4] regarding the right to a civil jury
trial, the Delaware courts also apply historic principles of common law.”).
52
As this court explained in Preston Hollow Capital LLC v. Nuveen LLC,
Under traditional principles, equity declined to exercise
jurisdiction over such [defamation] cases, which gave rise to
the maxim that “equity will not enjoin a libel.” The reasons
given for this no-injunction rule vary and have shifted over
time. The original intent behind the rule was to give jurors,
rather than judges, the ability to determine whether statements
were defamatory. In other words, a defendant, if she is to be
sanctioned solely for her speech, is entitled to have that speech
reviewed by her peers. That rationale remains persuasive in
Delaware, given the vitality here of the split between equity

15
this proposition, FirstString relies in part on Eric Hamilton’s article Federalism and the

State Civil Jury Rights, which summarizes the state of the common law as follows:

[T]he . . . court of equity . . . could decide legal issues
incidental to the equitable issues properly brought before the
court under the equitable cleanup doctrine. The chancellor
would not empanel a jury, but rather would decide all issues in
the dispute and decree complete relief. Thus, parties could lose
the right to a jury trial in some legal actions. 53

As reflected in the above passage, the cleanup doctrine effectively trumped any right to a

jury trial at common law.

For a contrary historical depiction, JSS relies primarily on Harold Chesnin and

Geoffrey C. Hazard, Jr.’s article Chancery Procedure and the Seventh Amendment: Jury

and law. This Court has jurisdiction over matters arising in, or
to be remedied by, equity, as well as certain issues for which
jurisdiction has been statutorily conferred by the legislature.
Where equity has jurisdiction over legal claims because
equitable relief is sought (or as vested by statute), it is the
judge, not a jury, who makes factual findings. As a result,
factual determinations for which a defendant could
traditionally insist on a jury at law are, in Chancery, reserved
to the Court. While a defendant in Chancery may request
severance and transfer of legal issues to the Superior Court for
purposes of determination of fact by a jury, such requests are
subject to the discretion of the presiding judge.

216 A.3d 1, 11–13 (Del. Ch. 2019) (cleaned up) (citing and discussing Organovo Hldgs.,
Inc. v. Dimitrov, 162 A.3d 102 (Del. Ch. 2017)).
53
Hamilton at 857; see also 1 John N. Pomeroy, A Treatise on Equity Jurisprudence § 182
(2nd ed. 1899) (stating that “[t]he courts of law have no power, by their own judicial
legislation, and without any statutory interference, to abolish, curtail, or modify the
jurisdiction which has once been acquired by equity”); Holland at 33 (explaining that “[t]he
common law right to trial by jury exists for actions at law but not for actions brought in
equity” (emphasis added)).

16
Trial of Issues in Equity Cases Before 1791. 54 Chesnin and Hazard argue that the practice

in the English Court of Chancery as to the use of jury trials in equity was “in transition” as

of the late 1700s. 55 They report that if a party raised both legal and equitable issues in late

1776, the practice of the court of equity was to refer the legal issues to a court of law. 56

Other scholars have similarly observed that “[w]hile the 16th century Chancery encouraged

the submission of cases to arbitration, referral to common law trial became the Chancery’s

regular device for delegation of factual disputes during the 17th and 18th centuries.” 57

Although Chesnin and Hazard draw their conclusion for the purpose of informing

the scope of the Seventh Amendment in federal proceedings, JSS fairly reasons that the

conclusion extends to the analysis at hand. To JSS, if the right to a jury trial in English

54
See Harold Chesnin and Geoffrey C. Hazard, Jr., Chancery Procedure and the Seventh
Amendment: Jury Trial of Issues in Equity Cases Before 1791, 83 Yale L. J. 999 (1974)
[hereinafter Chesnin & Hazard].
55
Id. at 999.
56
See id. at 1000. Courts of equity employed a number of similar procedures to resolve
those legal claims. The most standard procedure in England was the “‘feigned issue’
procedure,” where the chancellor referred for resolution disputed issues of fact to the law
courts for a jury trial. See C. Christopher Brown, The Law/Equity Dichotomy in Maryland,
39 Md. L. Rev. 427, 458–59 (1980) [hereinafter Brown]. The feigned issue procedure
consisted of a trial by jury—in a court of common law—of questions of fact in dispute in
a court of equity. Chesnin & Hazard at 1007. Alternatively, a court of equity would stay
its proceedings while the parties resolved factual issues in a court of law. Brown at 459
n.195. “Referral to common law trial was therefore equity’s regular device for resolution
of significant factual disputes in 17th and 18th century England.” Id. at 460.
57
John H. Langbein, Fact Finding in the English Court of Chancery: A Rebuttal, 83 Yale
L. J. 1620, 1629 (1974) [hereinafter Langbein]; see also 2 Sir William Blackstone,
Commentaries on the Laws of England 350 (19th ed. 1900) (“[I]f a question of mere law
arises in the course of a cause, . . . it is the practice of this court to refer it to the opinion of
the judges of the court of king's bench or common pleas, upon a case stated for that
purpose . . . .”).

17
common law in 1776 extended to matters in equity, then so too does Delaware’s

constitutionally enshrined right to a jury trial.

There are a few problems with the conclusion that JSS advances based on Chesnin

and Hazard’s work. The first stems from the self-qualified conclusions drawn by the

authors, who state that their position “is not the only possible analysis . . . and perhaps not

the soundest one.” 58

The second is articulated by John H. Langbein in his rebuttal to Chesnin and

Hazard’s article. Langbein compellingly argues that courts of equity referred matters to a

jury out of concerns for judicial efficiency only, explaining that “Chancery delegated cases

not because it lacked the power to decide them, but because it lacked the means.” 59

According to Langbein, those referrals were largely discretionary, and the jury verdicts

were advisory and nonbinding on the court. 60

58
Id. at 1020.
59
Langbein at 1630; see also A. Leo Levin, Equitable Clean-Up and the Jury: A Suggested
Orientation, 100 U. Pa. L. Rev. 320, 326 (1951) (“There was good reason for the
chancellor’s interest in trial by jury. His own procedure for resolution of issues of fact was
woefully inadequate.”).
60
Langbein at 1629–30. To counsel’s credit, JSS acknowledged in briefing that the
eighteenth-century practice of referring matters in equity to jury trials was largely
discretionary. See JSS Opening Br. at 7–9. Langbein’s observations also square with a
line of Delaware cases dating back to the early 1800s holding that factual disputes arising
in equitable matters can “be tried by a jury at law” but that such jury trials are “not a matter
of right, [and] fall[] completely within the sound discretion of the Court.” Saunders v.
Saunders, 71 A.2d 258, 261 (Del. 1950) (collecting cases); see also 10 Del. C. § 369
(codifying Saunders, providing that “[w]hen matters of fact, proper to be tried by a jury,
arise in any cause depending in Chancery, the Court of Chancery may order such facts to
trial by issues at the Bar of the Superior Court” (emphasis added)); Sparks v. Farmers’
Bank, 3 Del. Ch. 225, 230 (1868) (referring to the issuance of factual questions to a jury as
“one made to the sound discretion of the Court”). This line of cases is consistent with

18
 Perhaps most fatal, the conclusions that JSS advances seem to ignore Delaware’s

unique common law since 1776 as compared to that of other states and federal courts. In

the mid-nineteenth century, most states were merging their courts of law and equity. Post-

merger, many state courts grappled with what one scholar has called the “intertwined issue

problem”—the question of whether litigants were entitled to a jury trial on facts common

to legal and equitable issues. The majority of state courts considering this issue initially

multiple other cases throughout the late nineteenth and early twentieth centuries upholding
the scope of equitable jurisdiction over legal issues. See Waters v. Comly, 3 Del. 117, 130
(1840) (affirming this court’s refusal to refer certain factual matters for trial by jury);
Cumins v. Cumins, 31 A. 816, 819 (Del. Super. 1895) (“Under our system of jurisprudence,
questions of fact, of the gravest moment, and embracing the largest interests, are heard and
determined without a jury. We need not cite instances. They are numerous, and must be
familiar to every lawyer.”); Virden v. Bd. of Pilot Comm’rs, 67 A. 975, 982 (Del. Ch. 1896)
(exercising the clean-up doctrine despite an adequate statutory remedy at law, noting the
“familiar rule of equity that, where the court has jurisdiction of one branch of a case, it will,
for the purpose of avoiding multiplicity of actions, assume jurisdiction of the whole subject,
including such matters as would not, if standing alone, have been within the jurisdiction of
the court”); Mackenzie Oil, 120 A. at 855 (“The Chancellor may seek the judgment of a
jury on a question of fact proper to be tried by a jury by framing an issue to be tried at the
bar of the Superior Court. This procedure, however, has always been regarded as
discretionary.” (emphasis added)); Glanding v. Indus. Tr. Co., 45 A.2d 553, 559 (Del.
1945) (preserving this court’s equity jurisdiction in the face of statutes creating legal causes
of action, noting that equitable jurisdiction remains “unless the statute shows a clear and
certain intent that the equitable jurisdiction is no longer to be exercised under the matters
within the scope of the statute”); Saunders, 71 A.2d at 261–62 (“Once jurisdiction of the
subject matter has been properly ascertained equity will proceed to determine all facts
essential to a decree, except the determination of facts necessary to adjudicate the legal title
to land.”); Getty, 385 A.2d at 151 (holding that a “jury trial in Chancery is advisory only”
and rejecting the “old procedure of framing of issues by the Court of Chancery for jury
trial” as “probably outmoded”); see also William T. Quillen, Constitutional Equity and the
Innovative Tradition, 56 L. & Contemp. Probs. 29, 50 (1993) (“Delaware law seems clear
that, once equity jurisdiction has attached, the Court of Chancery has jurisdiction to enter
a purely legal remedy and to enter judgment on a sole surviving purely legal claim.”).

19
resolved that litigants were not entitled to a jury trial on intertwined issues, an approach

that has been referred to as the “traditional rule.” 61

Federal courts merged law and equity in 1938, and federal decisions thereafter

prompted a shift away from the traditional rule in merged jurisdictions. In 1959, the U.S.

Supreme Court held in Beacon Theatres, Inc. v. Westover that the Seventh Amendment

requires a jury trial on any legal issues, including intertwined issues. 62 Three justices

dissented, observing that the outcome was a “marked departure from long-settled

principles” because it “disregarded the historic relationship between equity and law.” 63

Although federal common law on civil litigants’ right to a jury trial does not bind state

courts, Beacon proved influential and precipitated a trend toward the federal approach. 64

Today, at least twenty-two states follow the federal rule while only eighteen states follow

a variant of the traditional rule. 65

Throughout the post-Beacon movement toward the federal approach, Delaware

stayed stalwartly in the traditionalist camp, first bucking the mid-nineteenth century trend

of merging courts of law and equity, 66 and then maintaining the viability of the clean-up

61
Hamilton at 862–63.
62
359 U.S. 500, 517–18 (1959).
63
Hamilton at 863.
64
See id. at 864–68.
65
Id. at 868.
66
See generally William T. Quillen and Michael Hanrahan, A Short History of the Court
of Chancery (1993), https://courts.delaware.gov/chancery/history.aspx (tracing the history
of the Court of Chancery from 1792 to 1992).

20
doctrine over a right to jury trial as to intertwined issues. 67 By 2004, this court had “long

recognized” the answer to the precise question presented in this action, which Acierno

addressed as a matter of black letter law. 68 Today, the law is settled, and the outer boundary

of this court’s equitable jurisdiction also delineates the scope of a right to trial by jury in

civil actions with limited exceptions not applicable here. 69

None of this is to say that access to a jury trial is a trivial matter to be ignored. To

the contrary, such access is an important factor to consider when determining whether this

court will exercise its discretion to decide the whole controversy. It is also the one of the

factors motivating this court’s willingness to “go behind the ‘façade of prayers’ to

determine the ‘true reason’ for which the plaintiff has brought suit.” 70

67
See Acierno, 2004 WL 1488673, at *5 (applying the cleanup doctrine to exercise
ancillary jurisdiction and reiterating that “a litigant is ‘not entitled to a Superior Court jury
trial of claims that are cognizable in this Court’” (quoting Pepsi-Cola, 2000 WL 364199
at *7); Park Oil, 407 A.2d at 535 (holding that “[t]he right to a jury trial . . . applies to an
action at law; it does not apply in an equity suit”); see also Hamilton at 891 (“Delaware
has not merged law and equity and has rejected attempts to abandon the equitable cleanup
doctrine. Delaware’s Court of Chancery is permitted to determine a legal issue, even where
the injunctive issues that gave the suit chancery jurisdiction became moot.”); Glanding,
45 A.2d at 555 (observing that the Court of Chancery “inherited its equity jurisdiction from
the English Courts; and in its organization and proceedings, especially in matters of
pleading, practice and evidence, the Court of Chancery of the State of Delaware has
adhered more closely to the English Court of Chancery and to English precedents than
those of any of her sister States” (internal quotation marks omitted)).
68
2004 WL 1488673, at *5 (noting that “Delaware law has long recognized the Court of
Chancery’s ability to hear legal claims, which, if brought alone, could be tried to a jury in
Superior Court” (emphasis added)).
69
See supra note 52 (discussing the defamation exception).
70
See supra note 33 and accompanying text.

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 In this case, FirstString’s request for specific performance is a genuine appeal to

equity. It is therefore within the court’s discretion to exercise its ancillary jurisdiction over

the remainder of FirstString’s claims under the cleanup doctrine. For these reasons, it is

appropriate for this case to remain in this court.

III. CONCLUSION

For the foregoing reasons, JSS’s motion to transfer is DENIED.

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