Delaware Business Litigation Report

Court Of Chancery Denies Garner Exception Absent A Fiduciary Duty

Morris v. Spectra Energy Partners (DE) GP, LP C.A. 12110-VCG (May 7, 2018)

The famous Garner case permits inspection of otherwise privileged communications when its strict criteria are satisfied. But as this decision decides for the first time in Delaware, Garner does not apply when there is no fiduciary relationship between the party seeking discovery and the party claiming the privilege. Here the LLP agreement waived any fiduciary duties. Thus, Garner did not apply and discovery was denied.

Court Of Chancery Imposes Sanctions For Failing To Comply With A Scheduling Order

In RE Examworks Group Inc. Stockholder Appraisal Litigation, C.A. 12688-VCL (February 21, 2018)

As this decision again points out, a scheduling order is a court order that must be followed or sanctions will be imposed. Late production of documents is just such a sanctionable event.

Court Of Chancery Explains Discovery Objections

In Re Oxbow Carbon LLC Unitholder Litigation, C.A. No. 12447-VCL (March 13, 2017)

For some time now, the Court of Chancery has told litigants that objections to documents requests should be specific, not generic and boilerplate. This decision thoroughly addresses the case law on this issue, with numerous citations to federal court precedent and detailed explanations of what objections are proper, including for claims of privilege. Oxbow should serve as a useful resource when it comes time to object to document requests in the Court of Chancery.

Court Of Chancery Addresses M&A Discovery

Hamilton Partners L.P. v. Highland Capital Management L.P.,  C.A. 6547-VCN (February 2, 2016)

Discovery of financial information in M&A litigation, including appraisal actions, often involves two issues: (1) how far back before the transaction should there be discovery and (2) is post-transaction discovery permitted? This decision provides some guidance on both issues.

Court Of Chancery Applies Wal-Mart Decision

Kops v. The Bank of New York Mellon Corporation, C.A. 10102-VCG (Transcript, July 16, 2015)

This recently released transcript has a good explanation of how to apply the Garner/Wal-Mart principles governing when stockholders may get discovery of documents otherwise subject to the attorney-client privilege. The multiple facts involved, particularly in a Section 220 case, tend to permit such discovery when the issue is whether demand is excused to file a derivative suit. More ›

Court Of Chancery Clarifies Privilege Waiver And Redaction Rules

TCV VI L.P. v. TradingScreen Inc., C.A. 10164-VCN (September 25, 2015)

This an excellent review of the scope of a waiver of the attorney client privilege and it harmonizes conflicting prior decisions. It also is a good outline of what must be in a redaction log.

Court Of Chancery Upholds Privilege For Funding Agreement

Carlyle Investment Management Company L.L.C. v. Moonmouth Company S.A., C.A. No. 7841-VCP (February 24, 2015) Applying the Delaware "because of" test to determine what is covered by the work product privilege, this decision prohibits discovery of the funding agreement between a litigation funding firm and one of the parties to the litigation. This is the first time that issue has been decided by a Delaware court.

Court Of Chancery Requires Individuals To Provide Expert Testimony

In Re Dole Food Co. Inc. Stockholder Litigation, C.A. Nos. 8703-VCL and 9079-VCL (February 27, 2015) In this case of first impression, the Court held that a corporation could not be designated as the "expert" to testify on a party's behalf.

Court Of Chancery Reiterates Privilege Log Rules

Mechel Bluestone Inc. v. James C. Justice Companies Inc., C.A. 9218-VCL (December 12, 2014) When documents are withheld under a claim they are privileged, it is necessary to say why there is a privilege. A "privilege log" does just that, however, there are specific requirements for what must be on that log, or its cousin the redaction log. Failure to meet those requirement may result in a waiver of any privilege. This decision explains all the rules and how to meet them. Of particular interest to Delaware lawyers, the decision twice points out that compliance with these requirements is a responsibility of the "senior Delaware lawyers" involved in the matter. My father said that someone was a "senior" if they were 10 years older than he was. He said that when he was 80. I doubt the Court of Chancery will agree with him.

Court Of Chancery Sanctions

James v. National Financial LLC, C.A. 8931-VCL (December 5, 2014) This decision deserves immediate attention by Delaware lawyers for it sets out their responsibilities to see that discovery, particularly discovery of ESI, is done correctly. It also is a good listing of the level of sanction that may be applied for not fulfilling those responsibilities.

Court Of Chancery Affirms Power To Order Discovery Abroad

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

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

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

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

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.