Why this ruling is noteworthy: All those who litigate in the Delaware Court of Chancery need to read an important opinion issued yesterday that enforces key litigation rules by way of granting a motion to compel discovery replies. The court, in the case styled In Re Oxbow Carbon LLC Unitholder Litigation, Consol. C.A. No 12447-VCL (Del. Ch. March 13, 2017), deemed waived a multitude of “non-substantive, generic” objections made to providing discovery responses, based on the deficiencies the court found in those objections. Although prior rulings of the court have similarly enforced the same discovery standards, see, e.g., recent case highlighted here, and synopsis of earlier decision here, this opinion provides comprehensive and formal additional guidance regarding the doctrinal underpinnings of the court’s conclusions and the reasons for striking the objections, with copious citations to Delaware case law and scholarly articles. The opinion includes reference to federal cases and commentary that are instructive because the Chancery Rules of Procedure are based on the federal rules of civil procedure.
Bottom line: This decision provides clear “step by step” instructions for litigators who want to avoid waiver of objections to discovery requests, and waiver of claims of privilege and work product. Nonetheless, as an anecdotal observation, it remains less than unequivocally certain that all members of the Delaware judiciary will strictly enforce the standards explained in this opinion–with the same vigor or rigor as applied in this decision–even though the same rules involved in this case and the same cited authority are applicable in other trial courts in Delaware. I’m also willing to bet that a large percentage of practitioners do not follow religiously the standards enforced in this decision–and are never challenged via a motion to compel.
Key principles/takeaways from this decision:
- Chancery Court Rule 26(b)(1) is the starting point for an analysis about what is “discoverable”. The “spirit of Rule 26(b) calls for all relevant information, however remote, to be brought out for inspection not only by the opposing party but also for the benefit of the Court….”
- When a party objects to discovery, “the burden is on the objecting party to show why and in what way the information requested is privileged or otherwise improperly requested.”
- Once the requesting party provides “some minimal” justification for the request, the burden shifts to the responding party to demonstrate why discovery should be limited or foreclosed. See footnote 2 for cases cited.
- Three requirements for a valid objection to discovery requests: (i) The objection must be specific; (ii) it must explain why it applies on the facts of the case to the request being made; (iii) if a party is providing information subject to the objection, the party must articulate how it is applying the objection to limit the information it is providing. Moreover, objections must be “plain enough and specific enough so that the Court can understand in what way the discovery is claimed to be objectionable.” (citing Van de Walle, 1984 WL 8270, at *2.)
- Each of the challenged objections was reviewed, and “generic, non-substantive objections” such as assertions that the requests were “overly broad”, excessive or “unduly burdensome” or not relevant, were overruled. Rather, in order for such objections to be valid, the objecting party needs to “submit affidavits” or “offer evidence” revealing the nature of the burden.
- Likewise, objections asserting “vague or ambiguous” questions were overruled because “they should have explained in what way the terms were giving them trouble, interpreted the terms in a reasonable and constructive way, and set out in their responses how they were interpreting them.”
- A bare assertion of privilege will not suffice. Privilege cannot be properly asserted unless a party provides “sufficient facts as to bring the identified and described document within the narrow confines of the privilege.” Separately, privilege in this case was also waived because the facts sought to be discovered were “at issue” in the litigation, and the “truthful resolution of [those facts] requires an examination of the confidential communications.”
- Work product likewise cannot be protected by invoking “in anticipation of litigation” as a “formulaic set of magic words” without specifying the litigation involved and satisfying the following requirements on a privilege log:
(a) the date of the communication, (b) the parties to the communication (including their names and corporate positions), (c) the names of the attorneys who were parties to the communication, (d) [a description of] the subject of the communication sufficient to show why the privilege applies, as well as [the issue to which] it pertains…. With regards to this last requirement, the privilege log must show sufficient facts as to bring the identified and described document with the narrow confines of the privilege. Slip op. at 11 (citation omitted).
- Work product was waived in this case because the log did not satisfy the foregoing requirements. In addition, “routine investigations” are not generally protected by work product.
In sum, many examples recited in this opinion of “non-substantive, generic” objections (that I know are commonly used by many litigators), were overruled as invalid, such as objections based on relevance, and unspecified assertions that the requests were overly broad, overly burdensome, or ambiguous.
SUPPLEMENT: The court issued a supplemental opinion on March 30, 2017 denying the motion for reargument (notwithstanding the attempt by the movant to categorize it as a “request for clarification”). In re Oxbow Carbon LLC Unitholder Litigation, Consol. C.A. No. 12447-VCL (Del. Ch. March 30, 2017). Although the Memorandum Opinion of five pages is important for an understanding of the foregoing original court opinion, one part of the decision denying the motion for reargument is especially noteworthy: On page 4, the court explained that a privilege was waived for those documents on the privilege log “for which no attorney is identified.”
The court also was not persuaded that one might discern that an attorney was involved if one “dug into the documents that corresponded to the entries on the log.” The court explained that it previously considered and rejected that argument. It added that the requirements for a privilege log are clear and the prior “discovery-obstructing” stances did not allow the movant to receive the benefit of the doubt. The court also cited to a prior decision on privilege logs and waiver in Klig v. Deloitte, 2010 WL 3489735, at * 3 (Del. Ch. Sept. 7, 2010), highlighted on these pages.