Encite LLC v. Soni, et al., C.A. No. 2476-CC (Del. Ch. April 15, 2011), read letter decision here.
Court of Chancery rejected a request for the extension of a deadline for submitting expert reports.
This 7-page letter ruling is a useful tool for the toolbox of Chancery practitioners who deal with the issue of extending deadlines imposed by a Scheduling Order.
Court of Chancery Rule 6(b) applies to motions to extend deadlines after the expiration of the prescribed period, during which the Court may grant an extension “if the failure to act was the result of excusable neglect.” Excusable neglect has been defined in other circumstances by the Delaware Supreme Court as “neglect which might have been the act of a reasonably prudent person under the circumstances.” (citing Dolan v. Williams, 707 A.2d 34, 36 (Del. 1998)). The Court reasoned in this decision that the foregoing standard was not met.
I love it when the Court uses Latin. In this decision the Court explained that: “Informal agreements among counsel do not operate, ex proprio vigore, to modify a Court’s Order.”
The salient background facts of this case involve a conversation with counsel in which one of the attorneys thought that there was an oral agreement to extend the deadline for submitting expert reports. That oral understanding was not confirmed in writing and one of the attorneys denied having that understanding.
The bottom line “takeaways” from this ruling are at least three-fold:
(1) No modifications of the deadlines in a Scheduling Order will be effective, regardless of written confirmation among counsel, unless and until the Court approves such modifications of the Scheduling Order;
(2) Even if all counsel agree in writing to a modification of the Scheduling Order, and even if they are deadlines that do not impact dispositive motions or trial dates, those modifications must be submitted to the Court for approval prior to the expiration of the applicable deadlines; and
(3) Requests for modification after the expiration of the deadlines in the Scheduling Order are subject to the “excusable neglect” standard under Court of Chancery Rule 6(b). Because that standard was not met here, the Court determined that the plaintiff’s “thirteenth-hour attempt to modify the Scheduling Order is denied.” The Court relied on a recent Delaware Supreme Court decision upholding a trial court’s refusal to include an expert report that was submitted after the deadline in the Scheduling Order. See Jackson v. Hopkins Trucking Company, Inc., 2010 WL 3397478, at * 3 (Del. Aug. 30, 2010).
Parenthetically, in closing, although the Court did not address it and did not rule on it, the Court mentioned “in passing” but did not condemn the position of one party who required that a discovery request made during a deposition be submitted in writing afterwards.
UPDATE: A motion for reconsideration was denied in a letter ruling on April 26, 2011, available here.