Concord Steel, Inc. v. Wilmington Steel Processing Co., Inc., C.A. No. 3369-VCP (Del. Ch. Oct. 7, 2010), read opinion here. Blog summaries of prior decisions of the Delaware Court of Chancery in this matter are available here.
The limited issue addressed in the latest decision in this case was a motion to open judgment pursuant to Court of Chancery Rule 60(b).
Summary of Decision
The Court denied the motion based in part on timing. Specifically, the Court was presented with an argument that new information was discovered in Concord’s post-trial bankruptcy proceeding that arguably impacted the outcome of the trial in Chancery. That is, WSP argued that a laptop exists that was previously thought to be destroyed.
The Court reasoned that the defendants (WSP) failed to cite any evidence that Concord represented to the Court that it did not possess the laptop or knew where it was. This 18-page decision is a well reasoned explanation about how difficult it is to open a judgment based on Rule 60(b). The Court listed the eight prerequisites for succeeding on a motion based on Rule 60(b). See footnotes 25 through 29.
Overview of Court’s Analysis
Although there is no hard deadline for a motion under Rule 60(b)(2), such a motion based on newly discovered evidence must be made “without unreasonable delay.” One of the key factors in the Court’s analysis was whether the “newly discovered evidence” could have been discovered prior to trial.
In the course of its discussion, the Court noted the distinction between limited discovery during the expedited period before a preliminary injunction hearing, and the fuller discovery prior to a plenary trial. In the trial of this case, the Court noted that it denied a motion to force the production of the laptop at issue because the motion came too late, shortly before trial. The Court reasoned then, that not enough effort was made on a timely basis to compel the production prior to trial, of the laptop that WSP now argues that it discovered after trial.
In addition, the Court reasoned that WSP did not carry its burden to show that the laptop that it argues it found evidence of after trial, “would be material under the circumstances.” That is, it was not shown that the laptop (allegedly discovered after trial), contained material information, and it was not demonstrated that the alleged newly discovered evidence was other than merely cumulative or impeaching in character. See footnote 47. Moreover, it was not certain that the new data that was alleged to be available, was actually in existence.
A Closing Note About ESI
The Court referred to one of its prior decisions in this case and the separate decision in Beard Research, Inc. v. Kates, 981 A.2d 1175, 1187 (Del. Ch. 2009), for important principles regarding electronic discovery procedure in the Court of Chancery. Namely, the Court emphasized that litigants [must] not defer electronic discovery issues until the last minute. That is, electronic discovery issues must be addressed early and often. If parties wait until the end of the allotted period for discovery to present such issues to the Court in a motion to compel, the Court will not be sympathetic or receptive to motions presented at such a late date.
In sum, the Court found that the arguments made in the motion to open judgment were similar to the motions that the Court rejected shortly before trial.