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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
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Showing 23 posts by Joseph C. Leonard.
Court of Chancery Addresses Interplay of Attorney-Defendants’ Confidentiality Obligations and Discovery Duties
In re Harris FRC Corp. Merger and Appraisal Litig., C.A. No. 2019-0736-JTL (Del. Ch. February 19, 2024)
Attorney rules for professional conduct across all jurisdictions include a general obligation of confidentiality regarding client information. But what happens when the duty of confidentiality runs into an attorney's duty, as a case party, to produce discovery? This decision from the Court of Chancery provides some insight. More ›
Chancery Finds Egregious Conduct in Books and Records Action Justifying Fee-Shifting Against Corporation
PVH Polymath Venture Holdings Ltd. v. TAG Fintech Inc., C.A. No. 2023-0502-BWD (Del. Ch. Jan. 26, 2024)
Under the “bad faith” exception to the American Rule, Delaware courts will consider shifting fees when aggressive litigation strategies amount to “glaringly egregious” conduct. Here, the Court found the defendant-corporation’s extraordinary attempts to resist a stockholder’s books and records demand under 8 Del. C. § 220 (“Section 220”) warranted requiring the corporation to pay the stockholder-plaintiffs’ attorneys’ fees and expenses. More ›
Failure to Preserve Mobile Data Leads to Multiple Sanctions in the Court of Chancery
Goldstein v. Denner, C.A. No. 2020-1061-JTL (Del. Ch. Jan. 26, 2024)
As more business is conducted via personal mobile devices, modern eDiscovery practice in Delaware generally involves the preservation of custodial mobile data. The failure to preserve relevant data while under a duty to do so may lead to the Court imposing sanctions. More ›
Chancery Finds Wholly Generic Objections to Discovery Requests Result in Waiver and Fee-Shifting
Bocock v. Innovate Corp., C.A. No. 2021-0224-PAF (Del. Ch. Dec. 6, 2023)
In this recent letter opinion, Vice Chancellor Fioravanti considered whether the plaintiffs’ failure to provide specific objections to discovery requests in a timely manner resulted in the waiver of those objections. More ›
Spoliation of Email and Texts Leads to Adverse Inferences and Fee Shifting
Gener8 LLC v. Castanon, 2022-0246-LWW (Del. Ch. Sept. 29, 2023)
This dispute concerned a non-compete agreement that the plaintiffs alleged the defendant breached by establishing a competing business. The defendant denied the existence of relevant texts and email communications, when in fact he intentionally withheld and deleted them. In discovery, he claimed no relevant communications existed on his phone, citing that he was not a “big texter.” The defendant testified to this at trial, and pled ignorance of both the operations of the competing enterprise and any discussions or communications to that effect. However, other parties produced text messages including the defendant, making clear that he had in fact sent many texts concerning these subjects. More ›
Chancery Orders Discovery Record Be Made Available to Stockholders in the Settlement Class
In re AMC Entertainment Hldgs., Inc. S’holder Litig., 2023-0215-MTZ (Del. Ch. May 20, 2023)
Under Delaware law, class members are entitled to access to the discovery record to assess the terms of a proposed class action settlement. In addition to confidentiality concerns, the size of a class and the scope of a discovery record present logistical challenges regarding access, particularly if class members are not represented by counsel. More ›
Chancery Prioritizes Efficiency in Ruling on Discovery Motions
Brown v. Matterport, Inc., 2021-0595-LWW (Del. Ch. Jun. 5, 2023)
The plaintiff sued alleging that the defendants had used lockup restrictions to improperly prevent him from selling shares. The Court of Chancery considered three discovery motions, and the ruling in all three instances focused on the efficiency of the discovery process. More ›
Chancery Addresses Standards for Privilege Logs
Thermo Fisher Scientific PSG Corp. v. Arranta Bio MA, LLC, C.A. No. 2022-0608-NAC (Del. Ch. Jan. 18, 2022)
To assert privilege in Delaware, the asserting party must provide clear and specific reasons as to how and why privilege applies. Such that opposing counsel can comprehend the privilege asserted and challenge unsupported claims. This task is accomplished with a clear and concise privilege log listing all documents subject to privilege with individual descriptions for each. The mere presence of an attorney on the communication will not render that communication privileged, and documents must be appropriately redacted rather than simply withheld when non-privileged material exists alongside privileged legal advice. Delaware counsel should be involved in privilege log decisions. More ›
Chancery Addresses When Third Parties Are Within the Scope of the Privilege
Police and Fire Ret. Sys. of the City of Detroit v. Musk, C.A. No. 2020-0477-KSJM (Del. Ch. January 31, 2023)
A communication is privileged under Delaware Rule of Evidence 502(b) if it is confidential and "made for the purpose of facilitating the rendition of professional legal services to the client." Rule 502(a)(2) defines a confidential communication as one "not intended to be disclosed to third persons other than those to whom disclosure is made in furtherance of the rendition of professional legal services to the client or those reasonably necessary for the transmission of the communication." Rule 502(b) makes clear that the presence of a client's "representative" does not waive confidentiality or break privilege, but the rule itself does not define "representative." More ›
Chancery Permits Discovery Under the Hague Evidence Convention
In Re Cote D’Azur Estate, C.A. No. 2017-0290-JTL (Del. Ch. Dec. 12, 2022)
The Hague Evidence Convention provides an alternative method from the Federal Rules of Civil Procedure to compelling production from opposing parties across international lines. In this decision, the Court of Chancery considered a request for production under the Convention from a plaintiff-heir, seeking discovery on her late father’s former legal counsel regarding issues surrounding the family estate, established as a Delaware LLC, to control the family villa in France. Questions arose regarding the propriety of the legal advice provided to the father by counsel, and plaintiff-heir sought to compel production of discovery, while defendant-counsel refused to cooperate. More ›
Chancery Addresses Multiple Discovery Scuffles in Twitter and Musk Litigation
Twitter Inc. v. Elon musk et al., C.A, No. 2022-0613-KSJM (Del Ch. Aug. 23, 2022)
Twitter Inc. v. Elon musk et al., C.A, No. 2022-0613-KSJM (Del Ch. Aug. 25, 2022) Letter Decision Resolving Plantiffs' Second Discovery Motion
Twitter Inc. v. Elon musk et al., C.A, No. 2022-0613-KSJM (Del Ch. Aug. 25, 2022) Letter Decision Resolving Defendants' Second Discovery Motion
Twitter Inc. v. Elon musk et al., C.A, No. 2022-0613-KSJM (Del Ch. Aug. 25, 2022) Letter Decision Resolving Defendants' Third Discovery Motion
Twitter Inc. v. Elon musk et al., C.A, No. 2022-0613-KSJM (Del Ch. Sept. 7, 2022) Letter Decision Denying Defendants' Motion for Reargument
Twitter Inc. v. Elon musk et al., C.A, No. 2022-0613-KSJM (Del Ch. Sept. 7, 2022) Letter Decision Resolving Defendants' Motion For Leave To Amend And Extend Case Schedule
Twitter Inc. v. Elon Musk et al., C.A. No. 2022-0613-KSJM (Del Ch. Sept 7. 2022) Letter Resolving Fourth Discovery Motion
Twitter Inc. v. Elon Musk et al., C.A. No. 2022-0613-KSJM (Del Ch. Sept 7. 2022) Letter Decision Resolving Defendants Fourth Discovery
During its pendency, the suit by Twitter to compel Musk to complete his $44 billion purchase of the company produced several discovery rulings illustrating the Court of Chancery’s rules and practice. More ›
Chancery Addresses eDiscovery Self-Collection in Pro Se Defense of Restrictive Covenant Dispute
Summit Fire & Security LLC v. Kolias, C.A. No. 2022-0460-MTZ (Del. Ch. Aug. 19, 2022)
“Self-collection” in eDiscovery refers to a party selecting its own data for review or production without input from counsel. Delaware courts generally disapprove of self-collection. But the courts will approach the issue differently in pro se matters where it may be necessary and appropriate for a party to self-collect, without turning any data repositories over to a vendor. In this restrictive covenant dispute, the plaintiff entity moved to compel the production of a complete forensic image of an individual pro se defendant’s phone, claiming that the prior production of relevant text messages was inadequate based on the defendant’s self-collection of data. The Court declined to order that relief, noting that self-collection often is necessary for pro se parties and that there was no indication that the defendant had failed to meet any of his preservation obligations. In light of those facts, and the case’s circumstances, requiring full access to a complete forensic image was unreasonable and disproportionate to the needs of the case.
Chancery Holds That Requests for Admission Are Subject to Discovery Deadlines
NetApp, Inc. v. Cinelli, Inc., C.A. No. 2020-1000-LWW (Del. Ch. June 3, 2022)
This decision clarifies discovery deadlines under the Court of Chancery rules. Plaintiff served dozens of requests for admission months after the close of discovery, arguing that such requests are not subject to discovery deadlines, but merely “a mechanism to eliminate factual disputes.” Federal courts have rendered conflicting decisions on the issue. Here, the Court of Chancery holds that requests for admission under Rule 36 are subject to discovery scheduling cut-offs because they are part of the discovery process as specified under Rule 26 and 36.
Superior Court Upholds Highly Confidential Designations in Discovery
Surf’s Up Legacy Partners, LLC v. Virgin Fest, LLC, C.A. No. 19C-11-92 (Del. Super. June 6, 2022)
Delaware courts generally do not permit the redaction of non-responsive material that is otherwise not privileged. Two-tiered confidentiality stipulations, allowing for highly confidential attorneys’ eyes-only designations, are available to prevent sensitive information from being widely disseminated amongst an opposing party if such disclosure is substantially likely to cause injury to the producing party and a standard confidential designation would be insufficient to prevent that injury. More ›
Chancery Applies Privilege Rules in Business Negotiations Context
Twin Willows, LLC v. Pritzkur, C.A. No. 2020-0199-PWG (Del. Ch. Feb. 28, 2022)
This decision involved a Master in Chancery applying well-settled rules on the attorney-client privilege, common interest, and work product doctrines. Respondent Pritzkur was appointed to serve as partition trustee for owners and tasked with selling the property. Pritzkur negotiated a sale agreement that was ultimately assigned to Petitioner Twin Willows. The agreement was not fully performed, and Twin Willows moved to compel production of communications between Pritzkur and the owners. Pritzkur asserted both common interest privilege and attorney work product. More ›