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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
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Court of Chancery Addresses Confidentiality in Appraisal Context and Use of Discovery to Identify New Claims
It is common and accepted practice for parties in Court of Chancery litigation to enter into a stipulated order governing the inevitable exchange of commercially-sensitive information during the discovery process. Those orders spell out how such information may or may not be disclosed, including in court filings, while adopting the standards and procedures reflected in the Court of Chancery rule on the topic, Rule 5.1.
Parties also usually include language in the order limiting the use of information designated as confidential to the instant litigation, unless it is made public during the course of the proceeding. According to this decision arising out of the appraisal context, if the disputed information does not qualify as confidential material, the wish to avoid disclosing new causes of action will not overcome the public’s right of access to judicial filings. In support of this holding, the Court cited a recognized benefit of the Delaware statutory appraisal remedy: an appraisal petitioner’s ability to uncover and act on fraud or other wrongdoing that otherwise might not be identified.