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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
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Showing 17 posts in Privilege.
Chancery Addresses Standards for Privilege Logs
Thermo Fisher Scientific PSG Corp. v. Arranta Bio MA, LLC, C.A. No. 2022-0608-NAC (Del. Ch. Jan. 18, 2022)
To assert privilege in Delaware, the asserting party must provide clear and specific reasons as to how and why privilege applies. Such that opposing counsel can comprehend the privilege asserted and challenge unsupported claims. This task is accomplished with a clear and concise privilege log listing all documents subject to privilege with individual descriptions for each. The mere presence of an attorney on the communication will not render that communication privileged, and documents must be appropriately redacted rather than simply withheld when non-privileged material exists alongside privileged legal advice. Delaware counsel should be involved in privilege log decisions. More ›
Chancery Addresses When Third Parties Are Within the Scope of the Privilege
Police and Fire Ret. Sys. of the City of Detroit v. Musk, C.A. No. 2020-0477-KSJM (Del. Ch. January 31, 2023)
A communication is privileged under Delaware Rule of Evidence 502(b) if it is confidential and "made for the purpose of facilitating the rendition of professional legal services to the client." Rule 502(a)(2) defines a confidential communication as one "not intended to be disclosed to third persons other than those to whom disclosure is made in furtherance of the rendition of professional legal services to the client or those reasonably necessary for the transmission of the communication." Rule 502(b) makes clear that the presence of a client's "representative" does not waive confidentiality or break privilege, but the rule itself does not define "representative." More ›
Chancery Applies Privilege Rules in Business Negotiations Context
Twin Willows, LLC v. Pritzkur, C.A. No. 2020-0199-PWG (Del. Ch. Feb. 28, 2022)
This decision involved a Master in Chancery applying well-settled rules on the attorney-client privilege, common interest, and work product doctrines. Respondent Pritzkur was appointed to serve as partition trustee for owners and tasked with selling the property. Pritzkur negotiated a sale agreement that was ultimately assigned to Petitioner Twin Willows. The agreement was not fully performed, and Twin Willows moved to compel production of communications between Pritzkur and the owners. Pritzkur asserted both common interest privilege and attorney work product. More ›
Chancery Finds Former Directors Bringing Wrongful Termination Claims Were Not Entitled to all Privileged Communications During Their Board Tenures, and Shifts Some Fees for Inadequate Privilege Logs
SerVaas v. Ford Smart Mobility LLC, C.A. No. 2020-0909-LWW (Del. Ch. Nov. 9, 2021)
With limited exceptions, directors normally have “unfettered” access to corporate information. This decision indicates, however, that the same may not hold true for former directors who do not challenge their removal as directors and who seek documents for reasons unrelated to their prior board service. Here, the Court of Chancery denied a motion to compel by two former directors who challenged the termination of their employment, and who sought in discovery all of the documents the corporation withheld as a privilege from their time as directors. More ›
Chancery Finds Adversity Between Directors and Formation of Special Committee Shields Against Production of Company-Privileged Information
In re: Howard Midstream Energy Partners, LLC, C.A. No. 2021-0487-LWW (Del. Ch. Sept. 22, 2021)
Issues of corporate privilege among directors entail a fact-specific analysis when a dispute arises among them. Here, the Court of Chancery considered a motion to compel brought by former directors and officers who claimed they were “ambushed” in a corporate “coup.” Because the directors should have considered themselves adverse to the corporation, and because a special committee was formed to deal with the petitioners’ potential separation from the company, the Court denied the petitioners’ motion to compel communications between the other directors and the company withheld as privileged. More ›
Chancery Addresses Common Interest and Privilege Log Issues in Matter Involving Special Discovery Master
Buttonwood Tree Value Partner, L.P. v. R.L. Polk & Co., Inc., et al., C.A. No. 9250-VCG (Del Ch. Jul. 30, 2021)
With increasing frequency, the Court of Chancery is appointing Special Discovery Masters and Discovery Facilitators as discovery issues continue becoming more complex and time-intensive. With those appointments also comes the opportunity for litigants to challenge the findings of those Special Masters and Facilitators and force the Court’s de novo review. This is just such a case. More ›
Superior Court Addresses Scope of Privilege Waiver in Dispute Involving The American Bottling Company, Coke, and Bodyarmor
Delaware courts generally uphold the attorney-client privilege, including by recognizing waivers that are limited in scope. But they also police selective disclosures to ensure fairness using doctrines like the “partial waiver doctrine,” under which a partial disclosure of a privileged communication may waive privilege as to the entire communication, and the “at issue” exception, under which privilege may be waived by injecting a particular privileged communication or broader issue into the litigation. Applying these doctrines in The American Bottling Company decision, the Delaware Superior Court’s Complex Commercial Litigation Division defined the scope of a party’s tactical waiver broader than that party contended was appropriate. More ›
ShareChancery Orders Production of Privileged Emails Transmitted Using Third-Party Accounts
In re WeWork Litigation, Consol. C.A. No. 2020-0258-AGB (Del. Ch. Dec. 22, 2020)
This Court of Chancery discovery ruling illustrates the risks associated with directors and officers using non-company email accounts to communicate about company business, particularly as it relates to confidentiality and the attorney-client privilege. More ›
Chancery Holds That Management Does Not Have Unilateral Authority to Preclude a Director From Obtaining the Company’s Privileged Information
In Re WeWork Litig., Consol. C.A. No. 2020-0258-AGB (Del. Ch. Aug. 21, 2020)
In October 2019, The We Company’s (the “Company”) board of directors established a special committee (the “Special Committee”) to evaluate a potential transaction wherein SoftBank, the controlling shareholder, would acquire majority economic ownership and voting control of the Company. When SoftBank terminated the transaction, the Special Committee filed this action on behalf of the Company alleging that they had breached their contractual obligations to use reasonable best efforts to purchase $3 billion of the Company’s stock in a tender offer. More ›
Chancery Denies Derivative Plaintiff’s Motion to Compel Work Product Prepared by Oracle’s Special Litigation Committee
In re Oracle Corp. Derivative Litig., C.A. No. 2017-0337-SG (Del. Ch. July 9, 2020)
After investigating certain potential derivative claims arising out of Oracle Corporation’s acquisition of NetSuite, Inc., and after trying unsuccessfully to settle those claims, Oracle’s Special Litigation Committee (“SLC”) agreed that permitting a derivative plaintiff to pursue those claims was in Oracle’s best interests. This opinion concerns the lead derivative plaintiff’s subsequent motion to compel, which sought the production of forty-two documents the SLC withheld on work product grounds. The documents at issue were the SLC’s counsel’s notes and memoranda of witness interviews, factual summaries prepared by the SLC’s counsel, counsel’s draft report to the SLC, and financial analyses and damages models prepared by or at the direction of the SLC’s counsel. The Court found that all forty-two documents were protected work product because they were created in anticipation of litigation in order to aid the SLC in connection with this action. In addition, the documents were afforded a higher degree of protection as opinion work product because they also reflected attorney thoughts and impressions. More ›
Chancery Finds Party Waived Privilege When Documents Were Produced to FCC
Plaintiffs brought a Motion to Compel seeking thirty-one documents withheld by Defendant on attorney-client privilege grounds. The documents had previously been disclosed by Defendant to the Federal Communications Commission (“FCC”) in 2016 during an investigation related to the current litigation. Plaintiffs did not argue that the documents were not privileged at the time of creation, but rather that the privilege was waived when the Defendant provided those documents to the government. More ›
ShareChancery Finds Pre-Closing Privilege Did Not Transfer to Buyer Under Asset Purchase Agreement
Defendants/Counterclaim Plaintiffs (“Buyers”) acquired substantially all of the assets of Arizona Polymer Flooring, Inc., later renamed DLO Enterprises, Inc. (“Sellers”). Sellers filed this action disputing who was financially responsible for certain defective products. During discovery, Sellers produced several pre-closing communications with their counsel that were redacted in part to protect the privilege. Buyers filed a motion to compel unredacted copies of the documents. More ›
ShareDelaware Superior Court CCLD Addresses Claim of Common Interest Privilege over Merger Agreement Parties’ Post-Signing, Pre-Closing Communications
The American Bottling Co. v. Repole, C.A. No. N19C-03-048 AML CCLD (Del. Super. May 12, 2020)
Delaware courts will apply the common interest doctrine when two parties, represented by counsel, exchange privileged information with one another concerning a legal matter in which they have a shared interest. To maintain the privilege, the common interest must involve predominantly legal issues, rather than a common economic interest in a commercial venture. If there is no common interest, a party who shares privileged materials with a third-party will generally waive the privilege. More ›
Chancery Finds the Common Interest Doctrine Shields Communications Between a Bankruptcy Litigation Trust and its Largest Unsecured Creditor
RCS Creditor Trust v. Schorsch, C.A. No. 2017-0178-SG (Del. Ch. Mar. 20, 2020).
The common interest doctrine shields communications with a third-party from disclosure when the common interest invoked by the party asserting the privilege is in furtherance of a joint legal strategy or objective with the third-party, and not simply for a commercial purpose. More ›
ShareChancery Addresses Discovery and Privilege Implications of Oracle Special Litigation Committee’s Decision to Defer to Stockholder-Plaintiff’s Prosecution of Derivative Claims
In re Oracle Corp. Deriv. Litig., C.A. No. 2017-0337-SG (Del. Ch. Dec. 4, 2019).
In this decision, the Delaware Court of Chancery considered the implications of a decision by a special litigation committee of Oracle Corporation to cede control of derivative claims to a stockholder-plaintiff – including whether that decision required the production of Oracle’s privileged documents that were provided to the committee and its counsel. More ›
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