M&G Polymers USA LLC v. Carestream Health Inc., C.A. 07C-11-242 PLA (Del. Super., April 21, 2010)
In this 193 page opinion, the Court imposed a large fee award for the failure to disclose important documents during discovery. The decision is a useful collection of authority on the parties' discovery obligations and the Court's powers to penalize offenders.
New Radio Group LLC v. NRG Media LLC, C.A. 4951-VCL (January 27, 2010)
Litigants frequently seek to keep their dirty linen secret in litigation by asking the court to seal the court's files to public inspection. Chancery Rule 5(g) deals with the limits on that confidentality order and this decision shows that litigants cannot ask the Court for more than 5(g) permits. The better practice is to make the provisions of any order specifically subject to the rule.
Cephalon Inc. v. John Hopkins University, C.A. 3505-VCP (December 4, 2009)
This is a short, but excellent summary of the law of attorney/client privilege. It also is an example of how the Court conducts an in camera review of documents to decide privilege questions.
Reid v. Johnston, C.A. 08C-01-025-JRS (December 3, 2009)
In this case of first impression, the Court held that a party seeking to depose an opponent’s expert must pay for the expert's preparation time. However, to prevent abuse, the Court limited the fees to a time period equal to the length of the actual deposition. Talk fast to save money.
eBay Domestic Holdings, Inc. v. Newmark, C.A. 3705-CC (October 29, 2009)
Modern discovery is often subject to problems, particularly with electronic "documents." As a result, some courts have imposed harsh sanctions for a party's failures to follow all the requirements. While not in any way excusing those failures, this decision shows that the Court of Chancery is aware of the difficulties involved. The Court held that only deliberate failures to follow the rules will be sanctioned by a fee award.
The opinion is also noteworthy for the discussion of a party’s offer to help the Court do an in camera document review. That offer took a lot of nerve to make and, characteristically, the Court politely declined the offer to do its job for it.
eBay Domestic Inc. v. Holdings Inc., C.A. 7705-CC (September 16, 2009).
This decision upholds the right to claw back privileged documents inadvertently produced in discovery, at least when there is an agreement permitting claw back rights.
Christ v. Cormick, 2008 WL 4889127 (D. Del. Nov. 10, 2008)
In this opinion the Court sanctioned the defendant’s conduct, including discovery abuse, by awarding punitive damages. The Court first entered default judgment against the defendant after his “repeated dilatory discovery conduct and his refusal to appear for deposition.” The plaintiff sought punitive damages in addition to compensatory damages, and the Court found that the entry of default did not preclude awarding punitive damages. The failure to appear for deposition was “but one example of the kind of willful conduct that requires an award of punitive damages.” The plaintiff also sought attorneys’ fees and expenses both for the Delaware action and proceedings in South Africa. The Court, however, denied this claim, finding that an award for fees in the South African litigation was unsupported by law, and the summary information submitted for fees for the Delaware proceeding was inadequate as a matter of law because it did not allow the Court to make a thorough analysis of the time records.
In re Countrywide Corp. S'holders Litig., C.A. 3464-VCN (Del. Ch. Sept. 3, 2008)
In this admittedly unusual case, the Court of Chancery has expanded the limited discovery available to an objector of a proposed settlement of a derivative case. The discovery includes the valuation of the derivative claims' value to the company. The Court also notes the potential privilege problems that may be involved.
Young v. Klaassan, C.A. 2770-VCL (Del. Ch. April 25, 2008)
The use of a special committee of the board to avoid derivative suits over allegations of breach of duty is well recognized. What is less well known is how to use the work of such a committee. Here the defendants improperly argued that a derivative suit should be dismissed because of the conclusions of a special committee formed after the complaint was filed. That use of information not alleged in the complaint converted the motion to dismiss into a motion for summary judgment and thereby permitted discovery into the work of the special committee.
The opinion also notes the "unusual" nature of the special committee in this case. The committee did not issue a report, barely had its existence disclosed, and otherwise proceeded irregularly. One has to wonder why it was even formed if it was to act so poorly.
Cantor v. Perelman, Civil Action No. 97-586-KAJ, 2006 WL 3462596 (D. Del. Nov. 30, 2006).
Plaintiff and defendants filed motions to exclude the testimony and reports of several experts. The Court granted the motions to exclude the entire proposed testimony of one expert from both parties. The motions were denied with respect to all other experts in all other respects.
This action originates from a plan of reorganization in bankruptcy litigation involving Marvel Entertainment Group, Inc. (“Marvel”) and the Trustees of the MAFCO Litigation Trust (“Trust”) created as part of the Reorganization Plan. The Trust was created to pursue breach of fiduciary duty and unjust enrichment claims against defendants comprising Perelman, a controlling stockholder and chairman of Marvel, and other directors of the Marvel companies. The instant opinion is connected to the issue of three tranches of notes (“Notes”) issued in 1993 and 1994 by Marvel, raising $553.5 million by using Marvel stock as collateral. Plaintiffs alleged that the defendants breached their fiduciary duties by using Marvel resources to sell the Notes and including restrictions on the issue of debt or dilution of Perelman’s shareholding in those Notes.
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In re Transkaryotic Therapies, Inc., C.A. No. 1554-N, 2006 WL 1388749 (Del. Ch. May 10, 2006).
Respondent in appraisal action sought two-tier, rather than one-tier, confidentiality order.
Continue Reading...Cherry Line, S.A. v. Muma Services f/k/a Murphy Marine Services, Inc., C.A. No. 03-199-JJF, 2006 U.S. Dist. Lexis 29818 (D. Del. May 8, 2006).
Defendant filed a motion for sanctions and for dismissal for failure to prosecute.
Continue Reading...This is a motion to amend the Complaint under Court of Chancery Rules 15(a) and 15(aaa) for the third time before the Court of Chancery, involving a foreign judgment enforcement action. Plaintiff sought to withdraw his petition for receivership and add factual predicates to various claims he made. In an earlier hearing, the Court of Chancery permitted plaintiff's motion for discovery and converted the defendants' motion for dismissal upon plaintiff's motion to one of summary judgment.
Continue Reading...The plaintiff is a German entity organized under that country's laws, as is the second named German limited liability defendant. The latter party is also a general partner in the first defendant entity. The plaintiff was one of two bidders that made an unregulated tender offer for a part of the first-named defendant's Delaware limited partnership interest. Plaintiff filed a motion in the Court of Chancery for expedited injunction proceedings, seeking to enjoin the defendant's general partner from approving any transfer agreements related to the tender offers.
Continue Reading...Defendants filed cross-motions requiring depositions of thirteen named plaintiffs' under Ch. Ct. R. 30(b)(6) in either Delaware or New York. Plaintiffs filed motions for protective orders, to limit the numbers of deponents and contended depositions could occur outside the United States via videoconferencing.
The plaintiffs' Australian company had reincorporated in Delaware.
Plaintiff sought equitable relief requesting its shareholders to be permitted to vote on a poison pill's extension. The court treated this matter as a representative one, rather than an individual shareholder suit.
Continue Reading...Bonham v. HBW Holdings, Inc., C.A. No. 820-N, 2005 WL 2335464 (Del. Ch. Sept. 20, 2005).
Defendants moved to stay discovery pending resolution of their motion to dismiss.
Continue Reading...Federal Ins. Co. v. Lighthouse Constr., Inc., 230 F.R.D. 387 (D.Del. 2005).
A subrogation action was brought by a property insurer to recover for loss incurred by a roof collapse against a building contractor. The contractor sought leave of the Court to file a third-party complaint against the erection contractor. The insurer also sought leave to file a claim against the erection contractor.
The Court held that the contractor could file a third-party claim for indemnity against the erection contractor. However, the Court also ruled that the plaintiff-insurer was barred by a two-year statute of limitations from filing a third-party claim against the erection contractor.
Continue Reading...This matter springs from a commercial dispute. The present opinion pertains to plaintiff's Daubert Motion seeking to exclude a part of the proposed expert testimony of defendants' expert. The expert intended to testify on accounting matters. The Court granted plaintiff's motion holding that the challenged parts of the proposed testimony failed the test of relevancy.
Continue Reading...Tracinda Corp. v. DaimlerChrysler AG, 362 F.Supp.2d 487 (D.Del. 2005).
Tracinda Corporation ("Tracinda"), a Nevada entity with its principal place of business in California, was engaged in investing in companies and at the time was Chrysler's largest shareholder. Tracinda brought this action against defendants comprising of DaimlerChrysler AG, Daimler-Benz AG ("Daimler"), Jurgen Schrempp and Manfred Gentz, (collectively "Defendants") who were citizens of Germany alleging: (1) violations of securities laws; (2) common law fraud; and (3) conspiracy in connection with the 1998 merger between Chrysler Corporation ("Chrysler") and Daimler-Benz AG ("Daimler-Benz"). In this Memorandum Opinion, the Court examined a number of evidentiary objections brought by both parties. The objections included: expert opinion testimony, statements made by the CEO of the German manufacturer that were published in a newspaper, investment banker documents discussing business combination scenarios between the merger parties, third-party research reports, meeting notes on the merger, failure to include charts and privileged attorney-client matters.
Continue Reading...This case involved whether TIG Ins. Co. ("TIG") met its contractual obligations to provide adequate counsel to defend Premier Parks, Inc. ("Six Flags") in an employment discrimination case. After intially granting plaintiff's motion to compel discovery, the court limited its ruling on reargument after it became clear that complying with the court's order would require manual searches of files rather than simple electronic searches.
Continue Reading...Plaintiffs filed a motion to compel deposition testimony of defendant's subsidiaries in a matter involving an international transaction. The motion was granted in part and denied in part.
Continue Reading...Belanger v. Fab Indus., Inc., et al., C.A. No. 054-N, 2005 WL 493593 (Del. Ch. Feb. 17, 2005).
The court granted defendant's motion for protective order in a case arising out of a dissolution petition under 8 Del. C. §275.
Continue Reading...This opinion deals with attorney sanctions under Court of Chancery Rules 11 and 37.
Continue Reading...This is a motion to quash jurisdictional discovery. The court granted the motion, quashing the discovery.
Continue Reading...Minority shareholders of LLC brought a derivative suit for corporate waste and breach of fiduciary duties. Defendants filed a motion to stay discovery pending the resolution of a motion to dismiss. The court granted it.
Continue Reading...This discovery-related action involves a claim of access to defendant-corporation's documents listed in its privilege log through a motion to compel. The court granted the motion in part, but denied production of the shareholder repurchase document.
Continue Reading...Westchester Fire Ins. Co. v. Household Intern., Inc., No. Civ. A. 02-1328 JJF, 2005 WL 23351 (D.Del. Jan. 5, 2005), aff'd, 167 Fed.Appx. 895 (3d Cir. 2006).
In this opinion the Court considered: (1) Plaintiff's Motion For Protective Order; (2) Defendants' Motion To Compel Discovery Relating To Financial Institutions Endorsement; (3) Defendants' Motion To Compel Deposition Of Westchester's Corporate Representative Witness; and (4) Defendants' Motion To Compel Discovery Relating To Westchester's Denials And Defenses.
The Court denied all of defendants motions and held plaintiff's motion moot.
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For more information concerning any of these cases, contact Edward M. McNally at emcnally@morrisjames.com or 302.888.6880
