Delaware Business Litigation Report
A Roundup of Recent Court of Chancery Rulings on Discovery
Discovery is the most time-consuming and expensive phase of litigation today. Thus, a court's resolution of discovery disputes can have a significant impact on how a case proceeds. Below are some highlights from recent Court of Chancery rulings on a variety of discovery issues.
STAY OF DISCOVERY PENDING RESOLUTION OF MOTION
In Wiggs v. Summit Midstream Partners, C.A. No. 7801-VCN (Del. Ch. Oct. 10, 2012), the Court of Chancery granted the defendants' motion to stay discovery pending resolution of the defendants' motion to dismiss. The Court of Chancery will generally stay discovery pending its resolution of a dispositive motion. There are exceptions to that general rule, such as when the dispositive motion is unlikely to eliminate all of the litigation, the plaintiff has required interim relief, or the plaintiff will be prejudiced because information may be unavailable later. None of those exceptions applied here and the court granted the defendants' motion to stay.
In granting a motion to compel, the court criticized a number of general objections in Lake Treasure Holdings Ltd. v. Foundry Hill GP, C.A. No. 6546-VCL (Del. Ch. Sept. 11, 2012). The court criticized general objections, such as objecting to the extent the requests impose obligations imposed by the relevant rules, seek information that is a matter of public record or seek information that is available from another source. According to the court, general objections like these are meaningless without additional information. The court was also critical of asserting general objections without indicating whether any information was withheld based on such objections, which leads to correspondence between the parties to determine that nothing in fact was withheld as a result of the general objections. The court emphasized that parties responding to discovery requests should be specific about their grounds for objecting and clear about what they are not providing.
PRIVILEGE AND IN CAMERA REVIEW
Skirmishes over the assertion of attorney-client privilege are common. Sometimes, these skirmishes will lead to an in camera review of the disputed communications. In Glassman v. CrossFit, C.A. No. 7717-VCG (Del. Ch. Nov. 5, 2012), the court reviewed 13 documents withheld on the basis of the common interest privilege and determined that 12 of those documents were appropriately withheld. The court also found that internal valuations and strategies that were not communicated to the plaintiff were not relevant to the issues in the case and that the company had an interest in keeping its business strategies confidential.
Propounding discovery days before or shortly after a discovery cutoff could lead to the other side obtaining a protective order. In Wagamon v. Dolan, C.A. No. 5594-VCG (Del. Ch. Nov. 27, 2012), the plaintiff served interrogatories August 31, shortly before a September 6 deadline for the completion of discovery, and requests for admissions September 6. The plaintiff conceded many of these requests were duplicative of prior requests, but claimed that prior, timely discovery requests were not answered. The court rejected this argument, noting the plaintiff had never moved to compel, and found the discovery requests were untimely. The court recognized, however, that the defendants had a continuing obligation to supplement their responses before trial.
DEPOSITIONS OF TRIAL WITNESSES
If a party intends to call a witness for trial who has not previously been deposed, then they can expect to make that witness available for deposition. The court addressed this issue in Vichi v. Koninklijke Philips Electronics, C.A. No. 2578-VCP (Del. Ch. Oct. 24, 2012). In Vichi, the plaintiff had submitted four affidavits of overseas witnesses who had not been deposed in connection with summary judgment briefing. Trial was scheduled for December 10 and the defendants sought to depose any of the four witnesses who the plaintiff intended to call for trial as soon as possible. The plaintiff emphasized that these witnesses were identified as potential witnesses in prior witness lists and discovery responses, but the court noted that more than 100 people were identified as potential witnesses and was unwilling to hold that the defendants were now barred from deposing these witnesses because they had not previously deposed them. Accordingly, the court ordered the plaintiff to inform the defendants by November 21 if it was going to call any of the four witnesses at trial and, if they were going to testify about information outside their affidavits, to identify the topics of that testimony. The court also ordered the plaintiff to make any of the witnesses identified November 21 available for deposition on or before December 4, unless the parties agreed otherwise.
As these rulings reflect, the Court of Chancery will resolve discovery disputes that the parties are unable to resolve themselves. If a party believes a discovery request is improper, it must clearly articulate the basis for believing such a request is improper or run the risk of losing a motion to compel. A party should also plainly identify the grounds for withholding information on the basis of privilege. A party intending to call a witness at trial should be prepared, and prepare the witness, for the fact that if the other side wishes to depose that witness prior to trial, the court will likely expect the witness to be made available for deposition. Finally, the court will not hesitate to ask detailed questions about the parties' discovery efforts or the facts of a case, so counsel must be prepared to answer such questions.