Martin Marietta Materials, Inc. v. Vulcan Materials Co.
2012 Del. LEXIS 342
| Del. | 2012Background
- Vulcan and Martin, the two largest U.S. construction aggregates firms, entered confidentiality talks leading to NDA and JDA to discuss a potential merger.
- Nye (Martin's CEO) and James (Vulcan's CEO) sought a consensual deal; Nye insisted on strict confidentiality to avoid hostile takeover risks.
- NDA and JDA defined confidential materials and restricted use/disclosure, with a Notice and Vetting Process for legally required disclosures.
- Martin used Vulcan's nonpublic information to plan its Exchange Offer and Proxy Contest, pressuring Vulcan in the process.
- The Court of Chancery found Martin breached both NDAs by using/disclosing confidential materials without proper triggers and procedures.
- Martin appealed, challenging the contract construction and the injunction as to the four-month prohibition on its bid activities.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NDA permits use of Evaluation Material for a hostile bid | Martin: NDA allows use for the transaction | Vulcan: NDA restricts use to a consensual transaction | No; NDA limits use to the defined transaction and requires proper procedure for disclosure. |
| Whether NDA permitted disclosures if legally required | Martin: disclosures were legally required | Vulcan: required disclosures must follow Notice and Vetting Process | No; Paragraph 3 does not authorize disclosures of Evaluation Material absent External Demand and Notice/Vetting. |
| Whether JDA restrictions independently barred use of Confidential Materials | Martin: JDA subservient to NDA and allows use for pursuing the Transaction | Vulcan: only permits use for a target Transaction being discussed (negotiated merger) | Yes; JDA use restriction barred hostile bid use of Confidential Materials. |
| Whether injunctive relief was appropriate given alleged irreparable harm | Martin: no irreparable harm shown; monetary damages suffice | Vulcan: breaches cause irreparable harm and equitable relief warranted | Yes; contractual stipulations and findings support injunctive relief for four months. |
Key Cases Cited
- Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381 (Del. 2012) (irreparable harm inform injunctive relief standards under Delaware law)
- Bank of New York Mellon Trust Co., N.A. v. Liberty Media Corp., 29 A.3d 225 (Del. 2011) (injunction standards; contract interpretation and irreparable harm considerations)
- Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728 (Del. 2006) (contract interpretation and reasonable readings to harmonize provisions)