Delaware Practice and Procedure for Non-Delaware Lawyers
These guidelines for collaboration between Delaware counsel and non- Delaware lawyers were prepared by Francis G.X. Pileggi and Kevin F. Brady.
This is a compilation of selected key Delaware court decisions, rules, and customs to guide Delaware attorneys serving as “Delaware Counsel” (or “local counsel”), and out-of-state attorneys admitted to practice in Delaware pro hac vice, or non-Delaware lawyers who collaborate on Delaware litigation with Delaware counsel.
The Role of Delaware Counsel
The Delaware Court of Chancery does not recognize the limited role of “local counsel” to the extent that it implies a less than plenary role of Delaware counsel—even if non-Delaware counsel are overseeing the litigation or taking the “laboring oar.”[i] Other Delaware courts have a similar view. The Court of Chancery emphasizes that a Delaware attorney of record is responsible for every action taken by his or her client—from the content of the pleadings to the fulfillment of discovery obligations. “[T]he Delaware lawyer who appears in an action always remains responsible to the Court for the case and its presentation,” without reference to who drafted the document at issue or was responsible for certain actions.[ii]
The Court of Chancery recently published Guidelines on Best Practices for Litigating Cases Before the Court of Chancery, which dispenses with the concept that “local counsel” is applicable in Delaware as a role with less than full responsibility.[iii] The Guidelines state in part:
1. Role of Delaware Counsel
a. The concept of “local counsel” whose role is limited to administrative or ministerial matters has no place in the Court of Chancery. The Delaware lawyers who appear in a case are responsible to the Court for the case and its presentation.
b. If a Delaware lawyer signs a pleading, submits a brief, or signs a discovery request or response, it is the Delaware lawyer who is taking the positions set forth therein and making the representations to the Court. It does not matter whether the paper was initially or substantially drafted by a firm serving as “Of Counsel.”
c. The members of the Court recognize that Delaware counsel and forwarding counsel frequently allocate responsibility for work and that, in some cases, the allocation will be heavily weighted to forwarding counsel. The members of the Court recognize that forwarding counsel may have primary responsibility for a matter from the client’s perspective. This does not alter the Delaware lawyer’s responsibility for the positions taken and the presentation of the case.
d. Non-Delaware counsel shall not directly make filings or initiate contact with the Court, absent extraordinary circumstances. Such contact must be conducted by Delaware counsel.
e. It is not acceptable for a Delaware lawyer to submit a letter from forwarding counsel under a cover letter saying, in substance, “Here is a letter from my forwarding counsel.”
Former Chancellor William Chandler summarized the duties of “Delaware Counsel” in a recent interview, where he explained that Delaware attorneys have a duty to review all filings to make certain that the arguments and positions are consistent with Delaware’s rules and laws.[iv] The former chancellor also spoke about the obligation of Delaware attorneys to inform out-of-state counsel about Delaware courts’ customs and traditions.
Attorneys Admitted Pro Hac Vice
The Delaware courts also strictly regulate the pro hac vice admission of out-of-state attorneys, and the rules require a Delaware attorney moving the admission of an out-of-state attorney to determine and certify to the admitting court that the lawyer to be admitted is reputable and competent.[v] Out-of-state counsel also must certify that they have reviewed Delaware’s Principles of Professionalism for Delaware Lawyers. Even after being admitted to practice in Delaware pro hac vice, an out-of-state attorney may not (1) sign pleadings; (2) file documents with the Court;[vi] (3) communicate directly with the Court; or (4) attend proceedings without Delaware counsel (including calls with the court, mediation and arbitration proceedings), without express permission by the Court.[vii] However, out-of-state counsel who are admitted pro hac vice may take or defend depositions in the pending action without the presence of their Delaware counsel.[viii]
The fee for pro hac vice admission is assessed on an annual basis, and varies by court. The District of Delaware, which recently announced its “Pro Hac Vice Enhancements,” now allows District of Delaware registered CM/ECF users to pay the $25 annual fee for attorneys admitted pro hac vice through the Court’s electronic filing system.[ix]
An out-of-state attorney’s pro hac vice status may be revoked upon a motion to the Court.[x] Inappropriate conduct by out-of-state attorneys will not be tolerated by the courts, and can lead to revocation of an attorney’s pro hac status and submission of specific matters to the bar of the attorney’s home state as well as Delaware’s Office of Disciplinary Counsel.[xi] Examples of inappropriate conduct are provided below.
Delaware’s pro hac vice rules apply with equal force to Delaware-barred attorneys who do not maintain an office in Delaware. Maintaining an office in Delaware is a prerequisite to serving as an attorney of record in Delaware pursuant to Sup. Ct. R. 12(a)(i); if a Delaware attorney retires, or practices in another state, and his firm does not maintain a bona fide Delaware office, then that attorney will need to be admitted pro hac vice before filing documents with or arguing before any Delaware court.
The Delaware Supreme Court’s Office of Disciplinary Counsel compiled materials and case excerpts relevant to the practice of law in Delaware for attorneys admitted pro hac vice.[xii] These materials provide guidance on issues frequently encountered by Delaware counsel when assisting out-of-state counsel, as well as guidance for counsel admitted pro hac vice, including:
- Out-of-state counsel’s desire to impermissibly limit the scope of retention of Delaware Counsel;
- Identifying the client: distinguishing the underlying client in the litigation from out-of-state counsel who directs Delaware counsel and pays the bills;
- Special consideration required when both Delaware counsel and out-of-state counsel are associated with the same firm, including the proper form of signature blocks; and
- Procedures for Delaware-barred attorneys who practice out of state and do not maintain a bona fide Delaware office.
As a supplement to the extensive materials provided by the Office of Disciplinary Counsel, the following cases provide distinct examples of attorney conduct that will not be tolerated by the Delaware courts and how the courts address such conduct:
- Sample v. Morgan, 935 A.2d 1046 (Del. Ch. 2007) (holding that a non-Delaware lawyer and her law firm could be sued in Delaware for providing advice and services to a Delaware corporation, its directors, and its managers on matters of Delaware corporate law, including the preparation of a certificate of incorporation, which they provided to a service agent to be filed in Delaware) (Ex. 12 hereto).
- Beck v. Atl. Coast PLC, 868 A.2d 840 (Del. Ch. 2005) (sanctioning and fining out-of-state counsel under Rule 11 and Rule 37 for filing a deceptive complaint, improperly certifying that the plaintiff was fit to serve as class representative, and intentionally withholding relevant non-privileged documents responsive to discovery requests) (Ex. 13 hereto).
- Auriga Capital Corp. v. Gatz Props., LLC, 2012 Del. Ch. LEXIS 19 (Del. Ch. Jan. 27, 2012) (shifting fees where plaintiff and his counsel acted in bad faith by “splatter[ing] the record with a series of legally and factually implausible assertions,” allowing defendant to collect responsive documents without legal supervision, and failing to preserve relevant documents and information) (Ex. 14 hereto).
- Griffin v. The Sigma Alpha Mu Fraternity, C.A. No. 09C-04-067 JAP (Del. Super. Mar. 15, 2012) (imposing a $500 fine against plaintiffs for allowing out-of-state counsel, who was not admitted pro hac vice in Delaware, to conduct a deposition in a Delaware case) (Ex. 15 hereto).
- In re Asbestos Litig. Limited to Ronald Carlton, C.A. No. 10C-08-216 ABS (Del. Super. May 14, 2012) (warning Delaware counsel of possible sanctions and/or rejection of documents filed for failure to adhere to the requirement that all correspondence to the Court be submitted on Delaware counsel’s letterhead and signed by Delaware counsel) (Ex. 16 hereto).
Electronic Discovery Duties
Electronic data preservation, collection, and production are also governed by the Delaware courts. Both the District of Delaware and the Court of Chancery provide guidelines on preserving electronically stored information (ESI) on their websites.
The District of Delaware implemented both a Default Standard for Discovery, Including Discovery of Electronically Stored Information[xiii] and a Default Standard for Access to Source Code.[xiv] These standards require counsel for all parties to confer on several topics concerning the production of ESI to avoid costly litigation of discovery disputes.
The Court of Chancery has adopted Guidelines for Preservation of Electronically Stored Information that require counsel to develop and oversee a process to preserve all relevant ESI.[xv] This process should include, at a minimum, identifying all custodians of potentially relevant information, disseminating litigation hold notices to those custodians, and conferring with opposing counsel to discuss whether they will limit or forgo discovery of ESI.
— — —
These guiding Delaware principles are further refined by the individual courts, each having its own rules for the admission of out-of-state attorneys, and the requirements of Delaware counsel. In addition, Delaware charges fees on an annual basis to renew a pro hac vice motion to enable out-of-state counsel to maintain his or her pro hac vice status in a particular case.
Because electronically stored information has created unique and unusual situations for lawyers and their clients in terms of discovery and trial, this topic is currently under review by many courts in Delaware.
**The exhibits referred to in this column are available by contacting the authors.
[i] State Line Ventures, LLC v. RBS Citizens, N.A., 2009 Del. Ch. LEXIS 233, at * 1 (Del. Ch. Dec. 2, 2009)
[iii] Delaware Court of Chancery, Guidelines to Help Lawyers Practicing in the Court of Chancery (Jan. 6, 2012), http://courts.state.de.us/chancery/docs/guidelines.pdf
[iv] Francis G.X. Pileggi and Kevin F. Brady, Interview with Chancellor William Chandler from the Delaware Court of Chancery, Delaware Corporate & Commercial Litigation Blog (June 17, 2011), http://delawarelitigation.com/2011/06/articles/commentary/interview-with-chancellor-william-chandler-from-the-delaware-court-of-chancery/
[v] Delaware Supreme Court and Delaware State Bar Association, Principles of Professionalism for Delaware Lawyers, at ¶ C (Nov. 1. 2003), http://courts.delaware.gov/forms/download.aspx?id=39428
[vi] The Court of Chancery issued an Order to clarify that only members of the Delaware Bar can be signed up with the LexisNexis eFiling system as eFilers and to receive eFiling notifications by email. See Delaware Court of Chancery, Standing Order (Aug. 5, 2008) http://courts.delaware.gov/chancery/docs/ ChanceryStandingOrder_Out-Of-StateAttorneys_080408.pdf
The Court of Chancery also issued a Notice informing Delaware lawyers that it is a violation of Rule 79.1 to share their eFiling passwords or add non-Delaware lawyers to the electronic service list. See Francis G.X. Pileggi, Chancery Clarifies and Admonishes: eFiling Passwords for Delaware Lawyers Only, Delaware Corporate & Commercial Litigation Blog (May 6, 2008), http://www.delawarelitigation.com/2008/05/articles/ commentary/chancery-clarifies-and-admonishes-efiling-passwords-for-delaware-lawyers-only/
[vii] See Andrea L. Rocanelli, Pro Hac Vice: Ethical Challenges of Serving as Delaware Counsel, Office of Disciplinary Counsel of the Delaware Supreme Court (Jan. 25, 2008), http://www.delawarelitigation.com/int86.PDF (citing Forte Capital Partners, LLC v. Bennett, Del. Ch., C.A. No. 1495-N (2005) (rejecting pleadings, motions, and letters to the Court signed by out-of-state counsel; also rejecting the appearance before Court in a teleconference by an attorney admitted pro hac vice when Delaware counsel was not present for the conference)). See also http://www.delawarelitigation.com/2008/01/articles/ commentary/delaware-litigation-via-pro-hac-vice-admissions/ (suggesting that Delaware lawyers provide these materials to out-of-state lawyers when asked or retained to serve as local counsel).
[viii] See Griffin v. Sigma Alpha Mu Fraternity, 2012 Del. Super. LEXIS 119 (Del. Super. Ct. Mar. 15, 2012) (holding that out-of-state counsel is not permitted to question a deposition witness in a Delaware action—even if “supervised” by Delaware counsel—“unless, and until, counsel is admitted pro hac vice.”)
[ix] United States District Court for the District of Delaware, Pro Hac Vice Enhancements (July 13, 2012), http://www.ded.uscourts.gov/pro-hac-vice
[x] See State ex rel. Secretary of the DOT v. Mumford, 731 A.2d 831 (Del. Super. Ct. 1999) (revoking the pro hac vice admission of out-of-state attorney who “demonstrated a lack of civility and professionalism by ‘coaching the witnesses’ during the depositions, by failing to control or attempt to control the objectionable conduct of his client, and by encouraging the [inappropriate] conduct of his client.”)
[xi] Manning v. Vellardita, 2012 Del. Ch. LEXIS 59 (Del. Ch. Mar. 28, 2012) (holding that while out-of-state attorney’s failure to fully disclose law firm affiliation “fell short of the level of candor this Court expects of attorneys practicing in Delaware,” there was no basis to revoke attorney’s pro hac vice status; however, Court referred the matter to the bar association of attorney’s home state and the Delaware Office of Disciplinary Counsel).
[xii] See supra note 7.
[xiii] United States District Court for the District of Delaware, The Default Standard for Discovery, Including Discovery of Electronically Stored Information (Dec. 8, 2011), http://www.ded.uscourts.gov/sites/default/files/Chambers/ SLR/Misc/EDiscov.pdf
[xiv] United States District Court for the District of Delaware, The Default Standard for Access to Source Code (Dec. 8, 2011), http://www.ded.uscourts.gov/sites/ default/files/Chambers/SLR/Misc/DefStdAccess.pdf
[xv] See Delaware Court of Chancery, Guidelines for Preservation of Electronically Stored Information (Jan. 18, 2011), http://courts.delaware.gov/forms/download.aspx?id=50988. See also Francis G.X. Pileggi, Delaware Court of Chancery Issues Non-Binding Guidelines to Help Lawyers Navigate Their Cases Through the Court More Efficiently, Delaware Corporate & Commercial Litigation Blog (Jan. 15, 2012), http://delawarelitigation.com/2012/01/ articles/chancery-court-updates/delaware-court-of-chancery-issues-non-binding-guidelines-to-help-lawyers-navigate-their-cases-through-the-court-more-efficiently/.