The Pizza Principle

"It is more time-consuming to clean up the pizza thrown at a wall than it is to throw it."


From Delaware Chancellor Bouchard in yesterday's decision in In re Transperfect Global, Inc. / Elting v. Shawe:

Nine years ago, in shifting fees where a litigant had advanced frivolous arguments, then-Chancellor Strine remarked that "it is more time-consuming to clean up the pizza thrown at a wall than it is to throw it." The "pizza principle" is on full display in this decision.

Before the court are petitions the Custodian of TransPerfect Global, Inc. filed for reimbursement of attorneys' fees and expenses he and his counsel incurred from May 2019 to December 2020. The amount is large—approximately $3.66 million. As detailed below, however, the vast majority of this amount was incurred because TransPerfect and its 99% owner, Philip R. Shawe, kept throwing pizzas at the wall. Among other things, they sued the Custodian in Nevada state court concerning two of his fee petitions in contempt of an exclusive jurisdiction provision in an order of this court; prematurely made not one, but five different attempts for appellate review of the contempt decision; objected in 192 pages of briefing and 108 pages of expert submissions to virtually every entry in the Custodian's billing records; and filed three non-meritorious motions attacking various aspects of the fee petitions.

In this unduly lengthy opinion [64 pages, and 494 citation footnotes]—necessitated by having to clean up the "extralarge, deep-dish pie[s] with lots of toppings" that TransPerfect and Shawe have thrown against the wall—the court grants the Custodian's fee petitions in the amount of $3,242,251, to be paid in the manner explained herein.

From a 2016 story in Forbes (Katia Savchuk), some backstory on the corporate breakup that led to the litigation:

Elting and Shawe built the company from a dorm-room startup to a global leader with $505 million in sales. But tensions between them flared up five years ago, spilling into legal battles in two states with mortifying episodes of infighting. There was Shawe charging the petite Elting with battery by high heel, his breaking into her office and stealing her confidential e-mails with attorneys, and F-bombs galore. Despite an astonishingly acrimonious relationship, the ex-lovers have thrived as business partners, and out of their dysfunction has grown a company that has, ironically, solved one of the world's biggest problems—how to communicate better.

NEXT: Pharma Co. Seems Ready to Withdraw Request for Preliminary Injunction to Take Down Anesthesiology Journal Articles

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  1. I thought the pizza principle related to corporate capital structure.

  2. This is also called the second law of thermodynamics.

  3. Were the parties filing pro se?

    From Delaware: Rule 3.1. Meritorious claims and contentions. A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law.

    Where are the sanctions and assessments against personal assets for the lawyers who signed and filed these claims?

    1. The normal sanction is to make the lawyer pay for the cost of cleaning up the mess, i.e. the other side’s legal fees, which appears to be what happened here.

      Is the full text of the order available where mere mortals not registered with the Delaware court system can see it?

  4. Is TransPerfect LGBTQA? Does it have a module for Lawyer English? How about one for a 20000 character Mandarin contract?

    The owners have different sexes. How were they dorm roommates?

    Not $3 million. “The battle, by some accounts, added up to a quarter of a billion dollars in costs.” Again, where were the lawyer fiduciaries advising an end to an irresponsible conflict?

    1. “The owners have different sexes. How were they dorm roommates?”

      The phrase “dorm-room startup” doesn’t specify 1) whose room or 2) that they shared the same room or even 3) that they lived in the same dorm building (though co-ed dorm buildings are completely normal, even 30 years ago when I was an undergrad).

      Work on your reading comprehension, get some therapy, or preferably both. There are some deep fixations you might want to work through.

      1. Tell us your thoughts on the real cost of this lawyer rent seeking churning. Stop nitpicking. The lawyer nitpicking done to Teump was reaaly damaging to our nation. It is lawyer fraud. The Mueller team should not have been fired. They should have been arrested and 10 years in fed stie at hard labor. To deter.

        1. And yet only one of us goes from an amusing, if routine, fee-shifting decision to wild speculation about sex and sexuality of the litigants, and then weakly tries to link your fevered masturbatory dreams to the ex-guy and Mueller. Seek help.

          1. Zarn. I do not understand your comment. Can you rephrase it into simple declarative sentences?

            1. You are a nut.
              Or is that TOO simple?

  5. Yet another convincing argument for bringing back dueling.
    Quicker, cheaper, and no need for appeals.

    1. Perhaps, a bitch slapping session, and great make up sex afterwards. I do not want anyone to die. They both greatly contributed to our GDP.

  6. “As detailed below, however” – Did anybody else read this and (aided by the confusion between the custodian of Transperfect and transperfect) think that the judge was going to explain why he WASN’T granting close to the full fee request? Sounded like he was going to say “they want 3.6M, however because most of it was their fault, I’m not granting them anywhere near that”. “However” seems wrong there.

    1. Agreed.

  7. I have a quibble with the metaphor. Pizza doesn’t stick to walls.

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