Chancery Court Denies Requested Protective Order in Rohm and Haas v. Dow Chemical Litigation

Posted on February 20, 2009 by Francis Pileggi

Rohm and Haas Co. v. The Dow Chemical Co., (Del. Ch., Feb. 19, 2009), read letter decision here. The Chancery Court denied a Motion for Protective Order filed by proposed third-party deponents in this procedural ruling. Dow sought to depose several members of the Haas family who were also trustees of the trust that is a major shareholder. This expedited case is scheduled to go to trial next month on the claim by Rohm and Haas that it is entitled to specific performance of a merger agreement.

Prior posts about the background of this case that has received widespread attention in the popular press, and a prior procedural decision, have been highlighted on this blog here.

In this short letter decision, the court noted the broad scope of discovery allowable under Rule 26, but also acknowledged the court’s power to restrict discovery where appropriate. In light of the large role played by the trust as a shareholder, and the claim that the shareholders would be harmed if the merger was not consummated, as well as the likelihood of obtaining useful information from the deponents, the court denied the motion for protective order, but emphasized that Dow assured the court that it would treat the witnesses with respect and "accommodate their schedules and conduct the depositions in a location convenient to the witnesses."

  • Thomason

    While these deposition may yield bits of discoverable evidence, ample justifications exist for some form of protective measures. First, the connection between a merger agreement between two publicly-traded companies and one company’s shareholders’ viewpoints is fairly attenuated, but even more so, when it’s the views of trustees of a trust holding shares. There, any connection is at the line between the light of relevance and the shadows of the un-discoverable. Second, what probative value is there to expressed disagreement between the testimony of a 30(b)(6) deponent and that of shareholders or of share-tending trustees? The 30(b)(6) deponent speaks the company line, but shareholders speak only in their self-interest.
    For the court to just ‘encourage’ respect when the trustee deponents are being inconvenienced and challenged is to wash its hands of the problems that typically can occur in depositions.