ACS State Healthcare, LLC v. Wipro, Inc. and Wipro, Ltd., No. 4385-VCP (Del Ch., July 23, 2009), read Order here; and

In Re: Waddell & Reed Financial, Inc., No. 4602-CC (Del. Ch., June 12, 2009), read Order here.

The two above Orders of the Delaware Court of Chancery, in unrelated cases, are noteworthy enough to highlight. Rulings of the Chancery Court in the form of Orders, and some transcripts of oral bench rulings, are cited in briefs by Delaware lawyers if they address a sufficiently important  issue. Though of arguable precedential value, if they are on point and there are no closer well-established cases controlling the issue, they are not uncommonly viewed by the Delaware Bench and Bar as at least worthwhile to refer to in briefs.

Leslie Spoltore, an esteemed litigation partner in our Delaware office, has prepared the following summaries of the two referenced short Orders.

ACS State Healthcare, LLC v. Wipro, Inc. and Wipro, Ltd., No. 4385-VCP ( Del. Ch., July 23, 2009).

The ever evolving world of electronic discovery has created uncounted changes in the practice of law. The shear volume of electronically stored information (ESI) can have significant impact on the cost, scope and length of the discovery process. As technology evolves so too does the discovery process, sometimes referred to as EDD or electronic data discovery. The case of ACS State Health Care, LLC v. Wipro Inc. and Wipro Ltd. is a recent example of how the Delaware Chancery Court is developing the law in this evolving field.

On July 23, 2009, the Court of Chancery signed a “clawback” Stipulation and Order in this case, one of the first such rulings in Chancery Court. [But see, here for a recent decision in the Hexion case that interpreted a somewhat related stipulated order, and here for a September 2009 Chancery Court decision that allowed for "clawback" of inadvertently produced documents.] The Stipulation permits the parties to the action to produce documents, without first engaging in a page-by-page review and without risk that such production would constitute a waiver of attorney client privilege. Noting that the voluminous number of documents that were likely to be relevant and/or responsive in the case, the parties determined that a document-by-document review prior to production would cause “substantial delay” and would be unduly burdensome. In an effort to alleviate the cost and time of discovery, the Stipulation sets forth the protocols for the search for responsive documents (e.g., key word searches, analytical software tools, and other reasonable means to locate privileged materials). If the protocols are followed, and if privileged material was inadvertently disclosed, the disclosure of such material will not be considered a waiver of any attorney-client, work product and/or other applicable privilege or immunity. ( As an aside, one of the counsel involved recognized, off the record, that it was akin to an experiment to address the new challenges presented by EDD of ESI.)
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In Re: Waddell & Reed Financial, Inc.,  No. 4602-CC (Del. Ch., June 12, 2009).

In the case of In Re: Waddell & Reed Financial, Inc. (“Waddell”) the Court of Chancery was asked to address the issue of reopening a shareholder vote to include approximately 3.2 million shares of common stock which were previously uncounted. The disputed shares were provided by the shareholders to RiskMetrix Group, Inc., a proxy advisory firm. Due to a technical error with the transmission from RiskMetrix Group, Inc., the votes of these shareholders were not counted.
Waddell and Daniel C. Schulte (“Schulte”) sought relief in the Court of Chancery to redress this error. The Verified Petition filed by Waddell and Schulte was supported by affidavits and other documents which outlined the technical nature of the failure to remit the proxies. Finding that it was equitable to allow the votes to be counted, Chancellor Chandler entered an Order on June 12, 2009 permitting the inspector to reopen the vote and to accept the previously omitted votes.