Salgado v. Mobile Services International LLC, C.A. No. 5268-VCN (Nov. 30, 2011), read letter ruling here.
The Court addressed the best solution for dealing with the failure of one of the parties to comply with both the prior discovery orders of the Court and the applicable rules regarding discovery.
Very Brief Overview
This letter ruling provides one of the most balanced and temperate resolutions of a discovery dispute that I have seen in the recent past regarding what the plaintiff conceded was a failure to comply with the Court’s discovery order. Implicit in the Court’s measured tone was the important nuance that distinguishes between failure of a party to comply with the applicable rules of discovery as opposed to the failure of an attorney to produce the documents required. This case involved the failure to produce certain documents that were covered by a prior discovery request and order. The exacerbating facts involve a party who was a resident of a foreign country and who was served with a subpoena for his laptop while in Wilmington, Delaware, for a deposition. For what the Court described as “unpersuasive reasons,” he left the country after the deposition with the laptop and claims that he was later mugged and his laptop was stolen, thus making an order to produce the laptop apparently futile.
Fee shifting against losers of a discovery motion are increasingly common in the Delaware Court of Chancery – – some say well-nigh routine. This ruling partially shifted fees in a carefully circumscribed manner that only related to this most recent issue of the lack of compliance with a prior order.
This is one of the better Chancery decisions involving a discovery dispute to the extent that it demonstrates an understanding of the plight of a lawyer involved in a discovery entanglement of the client’s own making.
Chancery Rule 37(b)(2)
The Court referred to Court of Chancery Rule 37(b)(2), which provides that the Court shall require the party failing to obey discovery order or his attorney (or both) “to pay the reasonable expenses, including attorneys fees, caused by the failure, unless the Court finds that the failure was substantially justified or that other circumstances made an award of expenses unjust.” It appears from the letter decision that the fees were imposed on the plaintiff as a party and not his attorney – – an important distinction.