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Chancery Holds Defendant in Civil Contempt for Using Discovery Materials for Business Purpose in Violation of Confidentiality Order

Posted In Chancery, Contempt, Discovery

Murphy Marine Services of Delaware, Inc. v. GT USA Wilmington, LLC, C.A. No. 2018-0664-LWW (Del. Ch. Sept. 19, 2022)
During the course of a two-part trial in which plaintiffs argued that the defendant breached the terms of a binding letter agreement, plaintiffs brought a motion for contempt against the defendant alleging that defendant used discovery materials produced by plaintiffs in connection with the litigation in negotiations with one of the largest customers of plaintiff Murphy Marine Services. In connection with the underlying action, plaintiffs produced documents to the defendant reflecting the revenue and financial information of Murphy Marine Services’ customers. Defendant admitted that estimates used in negotiating with one of Murphy Marine Services’ customers were determined using information obtained from those discovery materials. The confidentiality order entered by the Court in connection with the litigation contained common language providing that discovery materials would be used solely for purposes of the litigation. Thus, plaintiffs contended that using the discovery materials to gain a competitive edge in negotiating with one of Murphy Marine Services’ customers was a clear violation of the confidentiality order’s terms. The Court agreed with the plaintiffs. In addition to finding that defendant breached and repudiated the binding letter agreement, the Court therefore also found that defendant’s use of discovery materials for a business purpose violated the confidentiality order and ordered the defendant to pay the plaintiffs’ fees and expenses incurred in bringing the motion for contempt. 

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