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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
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Showing 67 posts in Discovery.
Akorn Inc. v. Fresemus Kabi A.G., C.A. 2018-0300-JTL (May 22, 2018) and Sandys v. Pincus, C.A. 9512-CB (July 2, 2018)
Corporate investigations present complicated issue surrounding what must later be produced in litigation. Context means everything in those disputes. Discovery into the decision by a SLC is much more limited than in other litigation, for example. But these two transcript rulings are useful for their insights into how the Court of Chancery handles disputes over discovery into the investigation process. More ›
In re Appraisal of Kate Spade Company, C.A. No. 2017-0714-AGB (Del. Ch. June 21, 2018)
The duty to collect and produce non-privileged relevant information extends beyond email to text messages and other forms of electronic communications. Standard practice in Delaware involves at least inquiring of custodians the extent to which they used text messages to engage in substantive communications on potentially relevant topics and to collect text message data when they answer affirmatively, absent an agreement to contrary between the parties. This bench ruling addresses that practice and reflects the Chancellor’s view that text messages often may be a critical source of information.
Under the Cryo-Maid decision, a forum non conveniens motion must consider the impact on a defendant forced to litigate in Delaware when discovery is needed in a foreign land. Here the Court considered the impact of the recent amendments to the Italian Data Protection Code on discovery and found that it did not impose an undue hardship under the facts present in this case. This may become more important as those European laws on privacy protection start to be considered for their effect on litigation outside of the EU.
Cumming v. Edens, C.A. No. 13007-VCS (Del. Ch. July 12, 2018)
This transcript ruling makes two important points about discovery obligations in the Court of Chancery. First, blanket form objections to document requests amount to a waiver of otherwise valid objections. Objections to scope and burden and the like need to be spelled out specifically with supporting facts. Second, investment bankers, even as third parties to a litigation, generally will not get far with objecting to requests on the basis of burden. Given their role in many transactions, they are front and center, house a lot of critically relevant information, and have been paid well enough to cover the expenses associated with production. In short, they are not your typical third party who may be given some more leeway when it comes to discovery burdens.
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.
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.
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.
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.
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 ›
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.
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.