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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.

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Court Of Chancery Outlines Discovery In Books and Records Case

Chammas v. NavLink Inc., C.A. 11265-VCN (August 27, 2015)

What discovery is permitted in a books and records case has two dimensions. More ›

Court Of Chancery Affirms Power To Order Discovery Abroad

Posted In Discovery

In re Activision Blizzard Inc. Stockholder Litigation, C.A. 8885-VCL (February 21, 2014)

Some countries, particularly in Europe, have laws that restrict the ability to get discovery of email and other materials.  This careful decision explains when the Court of Chancery will order that discovery anyway.  The opinion reviews the United States Supreme Court decisions and the laws of France on this subject.

Court Of Chancery Gets Tough On Delay

Posted In Discovery

Sustainable Biofuels Solutions LLC v. Tekgar LLC, C.A. 8741-VCP (January 28, 2014)

Delays in discovery that affect the trial date will get a litigant in trouble with the Court.  The Delaware Supreme Court has made this clear and required that scheduling orders be followed.  This transcript makes this clear.

Court Of Chancery Explains "Inadvertent" Disclosures

Posted In Discovery

Jefferson v Dominion Holdings Inc., C.A. 8663-VCN (December 13, 2013)

The term "inadvertent" is frequently used in confidentiality and quick-peek agreements to permit the claw back of privileged documents that have been "inadvertently" produced. In a rare case, the Court of Chancery concluded that there was inadvertent production, even though the documents were used in questioning a witness.

Court Of Chancery Explains Privilege Rulings

Posted In Discovery

MPEG LA L.L.C. v. Dell Global B.V., C.A. 7016-VCP (December 9, 2013)

This is a useful decision because it collects the relevant rules for deciding if there is a privilege for communications that include a mixture of business and legal advice. If the business advice can be segregated from the legal advice, the communication should be produced with the legal advice redacted. If the business advice predominates and segregating it from the legal advice is not possible, the communication should be produced. But if the business advice cannot be said to predominate and segregating the legal advice is not possible, the communication may be withheld.

Court Of Chancery Holds Privilege Passes With Merger

Posted In Discovery

Great Hill Equity Partners IV, L.P. v. SIG Growth Equity Fund I, LLP,  C.A. 7906-CS (November 15, 2013)

In what seems to have created a real stir, the Court of Chancery held that control over the assertion of the attorney-client privilege passed to the acquiring corporation in a merger.  Hence, that entity could waive that privilege and obtain the legal advice the company received before the merger about certain aspects of its operations that the buyer now is arguing over.  Frankly, there is a lot of authority supporting this result and it should not have come as a surprise.

Court of Chancery Explains "At Issue" Waiver of Privilege

Posted In Discovery

JP Morgan Chase & Co. v. American Century Companies Inc., C.A. 6875-VCN (October 31, 2013)

As is well known, the attorney/client privilege may be waived by interjecting that communication into the matters "at issue" in the litigation.  Advice of counsel as a defense is one such instance.  This decision illustrates another -  when the advice apparently went to the valuation matters.

Also interesting is the Court's caution that just because one side interjects attorney communications into the issues, that does not mean that the opposing side's demand to see those communications also opens up its privileged matters to discovery as well.

Court Of Chancery Refuses Temporal Limit On Waiver Of Privilege

Posted In Discovery

Mennen v. Wilmington Trust Company, C.A. 8432-ML (September 18, 2013)

If it is upheld upon review, this decision by a Master in Chancery needs to be studied by all practitioners.  Briefly, it holds that when a party waives the attorney-client privilege, it does so with respect to the entire subject matter of the communication involved in the waiver.  There is no temporal limit such that later communications on the same subject matter may be protected from discovery.

Court Of Chancery Permits Employee Email Inspection

Posted In Discovery

In re Information Management Services Inc. Derivative Litigation, C.A. 8168-VCL (September 5, 2013)

This decision holds that an employee's email communications with his attorneys are not privileged. The holding is limited to circumstances where the employer has at least told the employees not to expect that their email is private.  Furthermore, the Court notes that this decision may not be followed in the typical derivative case where an outsider is trying to gain access to those emails.  That decision will need to wait for another day.

Court Of Chancery Upholds Privilege To Say I Consulted

Posted In Discovery

In re Quest Software Inc. Shareholders Litigation, C.A. 7357-VCG (July 3, 2013)

Almost every case seems to involve the issue of when asserting that the defendant board had legal advice constitutes a waiver of the attorney-client privilege. This decision explains how far you can go and yet preserve the privilege.  Basically, you can say that you consulted and still keep the privilege, but you cannot say 'he told me it was okay" without a waiver.

Court Of Chancery Holds Privilege Waived

Posted In Discovery

Lake Treasure Holdings Ltd. v. Foundry Hill GP LLC, C.A. 6546-VCL (June 14, 2013)

This transcript decision illustrates the danger in using a computer generated privilege log.  It will leave out document descriptions, addresses, etc.  As a result, the Court here held that any privilege claim was waived by using the "worst" log ever.  Hence, loggers beware!

Court Of Chancery Limits Third Party Discovery

Posted In Discovery

In re: El Paso Partners LP Derivative Litigation, C.A. 7141-CS (Transcript, April 15, 2013)

This decision discusses when discovery from a third party not involved in the transaction under attack in the litigation is justified.  In part, the Court denied the discovery because it was not convinced the information to be obtained would be all that helpful in the litigation.

Court Of Chancery Explains Privilege Waiver Law

Posted In Discovery

In Re Comverge, Inc. Shareholders Litigation, C.A. 7368-VCP (April 10, 2013)

When does the mere assertion that your client had "advice of counsel" waive the attorney-client privilege?  This question comes up more often than you might think.  This decision makes clear that in some instances, merely asserting that you sought an attorney's advice is not a waiver of the privilege.  The 2 keys to retaining the privilege are not injecting the advice of counsel issue into the litigation yourself and not actually saying what the attorney told you.  But, if you follow the guidance in this decision, the privilege will be preserved.

Supreme Court Refines Rule On Failure To Follow Scheduling Order

Posted In Discovery
The Delaware Supreme Court has issued 4 opinions that significantly refine the rules set out only 2 years ago in the Drejka decision on when a case may be dismissed for failing to meet the timetable in a scheduling order.  See Christian v. Counseling Resource Associates Inc., No. 460, 2011 (January 2, 2013);    Hill v. DuShuttle, No. 381, 2011 (January 2, 2013);   Adams v Aidoo, No. 177, 2012 (January 2, 2013) and Keener v. Isken, No. 609, 2011 (January 2, 2013). The Christian decision is perhaps the most significant.  From now on, if a party fails to meet a deadline for discovery, the opposing party will be precluded from objecting unless the opposing counsel alerts the Court to the failure and asks for formal relief.  Note that the Supreme Court's wording is very broad because it says that the first failure to object to a delay means the opposing party has "waived the right to contest any late filings by opposing counsel from that time forward." Literally then, all future delays are waived.  This seems too broad to be taken literally. For example, a failure to object to a 2 day delay on a minor matter should not preclude a failure later to provide an expert report.  Nonetheless, the current, somewhat lax, informal extensions are now a thing of the past.

Court Of Chancery Clarifies Discovery Obligations

Posted In Discovery

Senior Housing Capital LLC v. SHP Senior Housing Fund LLC, C.A. 4586-CS (November 2, 2012)

This decision in a bench ruling has some interesting issues on what should be disclosed in discovery.  First, it is important to not fail to list the witnesses that you will call at trial when answering interrogatories.  Hanging back to the last minute may mean the witness will be barred from testifying.  There was more to this than just delay but that is still a point worth remembering.

Second, the scope of expert discovery may well include notes and work papers of everyone who is on the team assisting the expert witness and will certainly include prior studies the expert has done on the same subject matter for other clients. This points out the need to be careful in setting up the expert's team and in selecting the expert.