This post was prepared by an associate in the Delaware office of Eckert Seamans.
The focus of this blog is key Delaware corporate and commercial litigation decisions. That includes the Complex Commercial Litigation Division of the Superior Court. The rules and procedures in that court are not always the same as those in the Court of Chancery. It remains important to know the differences. For example, Court of Chancery Rule 26 and Superior Court Rule 26 are not identical, regarding what information provided to a party’s expert is discoverable.
Two recent rulings address this topic: CIM Urban Lending GP v. Cantor Commercial Real Estate Sponsor, L.P., C.A. No. 11060-VCS (Del. Ch. May 19, 2016) (TRANSCRIPT) and Green v. Nemours Found., C.A. No. N15C-03-208 (Del. Super. Aug. 17, 2016).
Superior Court Rule 26: The Superior Court of Delaware recently took a close look at Superior Court Rule 26 and made some very important distinctions regarding what is discoverable and what is not when it comes to information given to a party’s expert.
Background: In Green, the Superior Court considered plaintiff’s counsel inadvertently including two documents titled “Work Product Memorandum” and “Deposition Preparation Exhibits” in a binder that was produced to defense counsel prior to taking the plaintiff’s expert’s deposition. The plaintiff sought to recover those documents once the mistake was realized. After returning the documents, defendants’ counsel filed a motion to compel their production.
Analysis: The Superior Court has adopted the federal version of Rule 26(b), which requires counsel to “identify facts or data that the party’s attorney provided and that the expert considered in forming the opinions to be expressed” and “identify assumptions that the party’s attorney provided and that the expert relied on in forming the opinions to be expressed.”
The court left no stone unturned with its analysis of Rule 26 — often relying on the Advisory Committee’s comments to the Rule when it was amended. The Superior Court held that documents are deemed “considered,” and thus not privileged, “if it was seen by the expert, regardless whether he relies upon it and indeed, even if he rejects it entirely.”
However, the court did not extend such a sweeping definition of the other non-disclosure exception — the requirement that assumptions provided by counsel to the expert be disclosed. The Superior Court stated: “So to the extent the attorney communicates with the expert his ‘assumptions’ about the case — be they hypotheticals or other possibilities — these communications are privileged from disclosure unless the expert were to aver that he ‘relied’ on the assumption as posited by the attorney.”
Court of Chancery Rule 26: The Court of Chancery’s ruling in CIM Urban Lending GP stems from a dispute over the language in a limited partnership agreement and cross motions to compel information provided to each parties’ experts. The plaintiffs sought documents that the defenses’ expert relied on in determining his report. The defendants sought documents from the plaintiffs regarding a pre-litigation investigation into whether the limited partnership agreement was breached.
Analysis: Citing Chancery Rule 26(b)(4), which requires production of facts and opinions to which the expert is expected to testify and a summary of the grounds for each opinion, the court held that the information that was actually considered and relied on in the final defendants’ expert’s report was not privileged because that expert report was placed at issue since the expert will be testifying at trial.
However, the court held that documents considered and relied on by a non-testifying expert to prepare a pre-litigation report were protected work product and not discoverable. This is a very important distinction made by the court.
Finally, it is important to note that, unlike the Superior Court, the Court of Chancery has not adopted the most-recent language of the federal rules. Both the Superior Court and the Court of Chancery Rules contain substantially similar language in Rules 26(b)(1)–(4).
Importantly, however, Court of Chancery Rule 26 does not have a counterpart to Superior Court Rule 26(b)(6), which expressly exempts: (1) the compensation that the expert is paid; (2) the facts or data provided to the expert; and (3) the assumptions provided to the experts from any claim of privilege.
However, the Guidelines on Best Practices for Litigating Cases before the Court of Chancery (the “Guidelines”) expresses a preference for parties to stipulate what information is privileged. It’s also important to note that according to the Guidelines, parties are encouraged to agree to stipulate that “[m]aterials or information that may have been viewed or considered but not relied upon by the [e]xpert” are not discoverable, and the court provides a sample stipulation to address these issues.