Court of Chancery Circulates Draft Practice Guidelines
The Delaware Court of Chancery has long followed unwritten practices that knowledgeable attorneys follow. Recently, the court began circulating a draft "Guidelines to Help Practitioners Litigating in the Court of Chancery."
A product of consultation between the court and its rules committee, the guidelines are still a work in progress. They should not be cited to the court and do not set a standard of conduct or practice that the court requires be followed.
Yet a wise attorney will follow these established practices, if only to avoid unnecessary conflict with the court or appearing to be ignorant of its traditions. This is a brief summary of the 18 pages of guidelines.
HEARING AND TRIAL GUIDELINES
The guidelines start with a short section on how attorneys should act when appearing before the court in a hearing or trial. These are just common sense and basic rules of etiquette that you would expect most attorneys would follow.
Yet, time and time again we have seen out-of-town lawyers act as if they were ignorant of these simple rules.
Yes, these are "rules" and you had better follow them.
First, respect the court, its staff and its facilities. That means stand when you are introduced and when the judge enters the room. Be courteous to staff. Clear up your mess, both in court and in its conference rooms. The guidelines spell out what you should do, even if you were raised by wolves in the forest.
Second, the court strictly limits what technology is allowed in the court. The general rule is that anything that makes noise must be left outside. No cellphones, PDAs, etc. are allowed. While computers and other presentation technology may be used, know how to use it to avoid wasting the court's time while you fumble with your device.
BEST LITIGATION PRACTICES
The guidelines address 12 specific practice problems that regularly occur in the Court of Chancery. They go into considerable detail, but here is a brief summary.
1. Rule of Delaware Counsel
Here is a fact of life. The chancellor and vice chancellors meet all kinds of lawyers, from all over.
But because the Delaware Chancery bar is small, the court deals with the same Delaware lawyers repeatedly. The court trusts the Delaware lawyers. It holds those lawyers accountable. Disrespect the Delaware lawyer and you run the risk the court will disrespect you. All filings must be made by a Delaware lawyer, and not just under a cover letter attaching what a non-Delaware lawyer wrote.
2. Courtesy Copies
A "courtesy" copy is the "court's" copy. It wants these copies for its judges to use, mark up or give to their clerks. Generally, send over two paper copies of what you file electronically.
Remember that the court does not have the resources to easily reproduce filings or collate related documents. Hence, you need to help the court by providing those materials.
3. Contacting the Court
The Court of Chancery is very open to direct contacts. You can call chambers, particularly to schedule matters. But if you do, play fair. It is best to have all counsel on the telephone when you call. But if that is impractical, make sure you ask permission to call alone and tell the staff that you are authorized to speak for others. And be sure that you promptly and accurately report back to other counsel on your call.
4. Scheduling Guidelines
This section is among the most detailed of the guidelines. It needs close reading.
There are standard schedules that should be followed, such as for briefing on merit-based motions, or in that unique Delaware action, the "summary proceedings."
The court expects witness depositions to be scheduled routinely and is not receptive to late requests to depose a witness after fact discovery has closed. Expert witnesses should be deposed after all the reports are served.
On pleadings, two guidelines apply. First, when answering the complaint, first set out each allegation separately and then fairly admit or deny each paragraph of the complaint. Second, let amended pleadings be filed and then move to dismiss if it lacks merit. Objections to amendments are not favored. Avoid them.
If you have only 15 pages to submit, a speaking motion is acceptable. If it is longer, then you should file a full brief. The court is particularly concerned about motions to dismiss that go beyond the pleadings. If you are going to file an extensive appendix, then you really do not have a legitimate motion to dismiss.
Motions to expedite warrant special attention. What many non-Delaware lawyers do not realize is that in response to a motion to expedite, the court may well set the schedule for the whole case, including trial. It may not wait for you to answer the complaint or even in a rare case to retain Delaware counsel. A scheduling call from the court after a motion to expedite is not to be taken lightly. Indeed, if counsel can agree on the schedule in advance of that call, they should do so.
7. Discovery Disputes
Here meet and confer sessions, with supporting authority, are expected. Once a discovery motion is presented, the court is free to grant any relief the rules permit, against any of the parties. The court expects such motions to be responded to and presented very promptly.
8. Confidentiality Orders.
The Court of Chancery is frequently subject to news coverage. It is sensitive to the need to provide public access to its proceedings. Thus, it generally will not close the courtroom to the public.
Other means of preserving confidentiality are available, however, including using aliases in a transcript. The court will not accept confidentially stipulations that maintain sealed records after a case is concluded with respect to records that would otherwise become public.
9. Compendia and Appendices
Chancery litigation is often document intensive. Delaware's reliance on unreported decisions also is unusual. This leads to problems with large appendices of documents and voluminous compendia of case law. Hence, counsel should do what can be done to limit the size of compendia and appendices, use tabs to make materials easy to find and avoid duplication. The guidelines give concrete samples.
10. Trial Procedure
The court wants trials to be well organized, with a minimum of clutter. Pretrial orders should be detailed, but submitted after any pretrial briefs are prepared to better reach agreements when possible. Generally, trial exhibits should be submitted jointly, in chronological order if possible, with evidence objections preserved, and four copies provided. Witness exhibit books, with the exhibits just for that witness are also preferred.
Trial time is equally divided, and timed; so keep track. Witnesses should appear just once, regardless for whom they testify.
Once again, the parties are expected to agree on forms of orders. But if they cannot agree, the prevailing party should submit his form, the other party respond and the prevailing party reply. That's it.
12. Representative Actions
Class actions and derivative suits have a special place in Chancery litigation. In part, this arises out of the concern that nonparties may be bound by the litigation.
Hence, in instances of multiple proceedings, the court expects to be kept informed of the existence and status of other matters filed elsewhere.
Finally, settlements of representative litigation have their own special procedures arising out of the need to give notice to all affected. The form of notice is now almost standardized and covers how much time to give before the settlement hearing and the procedures for resolving any disputes not resolved in the settlement.