Kinexus Representative LLC v. Advent Software, Inc., C.A. No. 1161-VCN (Del. Ch. June 30, 2011), read letter ruling here. See summary of 2008 Chancery decision in this case here for more background on the long history of this Delaware corporate litigation. That 2008 decision also includes important procedural rulings involving electronic discovery, and the obligation to specify which documents, by Bates-number, among 288,000 produced, were responsive to specific interrogatories.
In this latest ruling, the Court denied a motion to dismiss for failure to prosecute based on Court of Chancery Rules 41(b) and 41(c)–but after expressing its displeasure with the lack of alacrity with which this matter has progressed. The Court of Chancery often leaves it up to counsel for the parties to propose a scheduling order, as compared to many other courts that impose a scheduling order. Nonetheless, the Court of Chancery often brings cases to trial within a year of a complaint being filed, and if there is insufficient activity in a case, without justification, the Court will often require the parties to explain why the case is not moving forward with celerity.
The bottom line in this case is that the Court gave the plaintiff another chance to “move this case along.” The author of this ruling exhibited more sympathy for counsel whose client may not have been fully cooperative–a leniency that is not always found in decisions by Delaware’s court of equity.
One practical insight at footnote 5 was the request, which was rejected, for over $250,000 to cover the cost of storage and preservation of electronic data during the 10 years since the date of the incident giving rise to the lawsuit–in the event the motion to dismiss was denied. The figure sought for EDD is an indication of the increased cost of litigation due to electronic discovery and the high cost of storing and preserving ESI.
I am declining to give any more details of the dilatory nature of this litigation in my short overview because the purpose of this blog is not to pillory any party or counsel but rather to highlight the issues addressed in key corporate and commercial decisions from Delaware’s Supreme Court and Court of Chancery. Some rulings naturally have wider application than others.