The latest Chancery decision in hotly contested litigation captioned In re Oxbow Carbon LLC Unitholder Litigation, Consol., C.A. No. 12447-VCL, (Del. Ch. July 28, 2017), addresses several issues that are of practical importance for all trial lawyers. Several prior Delaware decisions in this case that have been highlighted on these pages provide additional background. Among the key principles addresses in this decision is the application of Rule 3.7(a) of the Delaware Lawyers’ Rule of Professional Conduct, which generally bars a lawyer from acting as an advocate at the same trial in which the lawyer is likely to be a necessary witness – – with three exceptions. After a careful application of the rule to the facts of this case, the Delaware Court of Chancery reasoned that, on balance, the lawyer involved should not be prevented from testifying, although his testimony would be approached with care.
The opinion explained that the lawyer involved was present during the trial but that he was not acting as an advocate to the extent that he did not have a speaking role. This was intentional because it was expected that he might be needed as a rebuttal witness.
Importantly, the court emphasized that his testimony would not undermine the fairness of the proceedings, especially because it is a bench trial and the court fully understood the difference between the role of a fact witness and the role of a counsel for one of the parties. The court provided ample citations to authority including the well-known Delaware Supreme Court decision entitled Appeal of Infotechnology, Inc., 582, A.2d 215, 221 (Del. 1990), which generally stands for the principle that a non-client litigant only has standing to enforce a rule of professional conduct such as an alleged conflict “when he or she can demonstrate that the opposing counsel’s conflict somehow prejudiced his or her rights.” Moreover, the court is aware that rules of professional conduct are sometimes used as a tactical weapon to seek inappropriately to disqualify opposing counsel. See footnotes 22 through 24.
Trial Practice Tips from the Court
This opinion also features a practical commentary from the court with insights on trial practice regarding the order that witnesses are called, and the preference of calling a witness only once when he will be both an adverse witness and a witness favorable to the other party. The alternatives in calling an adverse witness for a party’s case in chief, involve the court deciding whether or not the party calling the adverse witness will question the party first as part of his case-in-chief. In this case, the court decided to permit counsel to conduct a direct examination first, followed by the cross examination by the adverse party. This approach allowed the party who has the burden of proof to determine the order of witnesses by calling adverse witnesses for its case-in-chief. But that party here did not have the opportunity to question an adverse witness from the outset as a hostile witness. Instead, counsel for the witness had the opportunity to present the witness first, after which opposing counsel would cross-examine. The court preferred this approach as a more efficient use of trial time, although it deprives the party with the burden of proof of calling and questioning a hostile witness from the outset.
The author of this opinion also explained that generally he prefers to give the party with the burden of proof the ability to first question – – even an adverse witness, but in this case because both sides had asserted interrelated claims and defenses where they each technically bore the burden of proof, there was less ability to view one side as having the burden such that they should also receive the tactical advantages that accompany that burden.
Lastly, the opinion included a useful discussion of Delaware Rule of Evidence 615 regarding sequestration of witnesses and the ability of the court at the request of a party to order witnesses excluded from the trial so that they can hear the testimony of other witnesses – – with the exception of a party who was a natural person, or an officer or an employee of a party which is not a natural person, or a person whose presence is necessary to the presentation of the cause.