Delaware Supreme Court.

The Delaware Supreme Court on Wednesday refused to hear an expedited appeal of a Delaware Court of Chancery ruling that denied a defendant's attempt to modify a protective order so it could pursue fraud claims outside of the state.

In a four-page order, the high court upheld the denial of NCM Group Holdings' application for interlocutory appeal of a Nov. 1 bench ruling by Vice Chancellor Sam Glasscock III that blocked the company's request to amend a protective order limiting the use of sensitive discovery materials only to the Delaware litigation, stemming from a 2014 merger with demolition and environmental-remediation firm LVI Group Investments.

The move would have allowed NCM to take its appeal straight to Delaware's five justices, without having to wait on the resolution of competing claims in the Court of Chancery.

NCM said in court documents that discovery had turned up evidence of “pervasive and widespread” fraud by top LVI personnel, but it worried that jurisdictional issues would bar individual claims in Delaware. Instead, the company hoped to file suit in Illinois, before the statute of limitations could run there in April 2019.

The company argued that the protective order functioned as a de facto release for the alleged wrongdoers, and sought to file suit in Illinois using information it obtained through discovery in Delaware.

Last month, Glasscock conceded that the issue NCM cited was “not a frivolous” one, but he said the company had failed to meet the high bar for securing a fast-tracked appeal. The vice chancellor also rejected NCM's argument that his earlier ruling had touched on a matter of first impression regarding how the state handles motions to modify confidentiality orders.

Though the Delaware Supreme Court has never set a standard for evaluating the requests, Glasscock said a 2002 ruling from the high court embraced a ruling from the U.S. Court of Appeals for the Second Circuit, known as Wolhar, which required a showing of “extraordinary circumstances” and “compelling need.”

On Wednesday, the Supreme Court endorsed Glasscock's reading of Wolhar and said that NCM should have anticipated the possibility that it would want to sue in Illinois.

With trial in the case set to begin April 30, the justices said the proceedings would likely wrap before the deadline for the statute of limitations. However, they also left open the door for a second application, in case of delays.

“If trial court proceedings are delayed, or appellate review cannot be completed in the normal case, then NCM can renew its application, or move to expedite an appeal, as the circumstances warrant,” said Justice Collins J. Seitz, writing for the court.

Justices Karen L. Valihura and James T. Vaughn Jr. also signed on to the order.

Attorneys from both sides were not immediately available to comment.

LVI is represented by Rudolf Koch and Matthew D. Perri of Richards, Layton & Finger.

NCM is represented by Richard D. Heins and Peter H. Kyle of Ashby & Geddes and Peter B. Ladig and Meghan A. Adams of Morris James.

The case is captioned LVI Group Investments v. NCM Group Holdings.