A recent Delaware Court of Chancery bench ruling provides guidance on two important procedural topics that do not enjoy a robust body of case law to illuminate the nuances that practitioners must be familiar with in connection with certain aspects of Chancery litigation. In the matter styled: In Re Morrow Park Holding LLC, Cons., C.A. No. 2017-0036-TMR (Del. Ch. Oct. 22, 2018) (Transcript), the court provided the applicable standards for addressing two key procedural issues:
(1) How to determine the amount of a bond required by Court of Chancery Rule 65(c) for purposes of satisfying a prerequisite for the issuance of injunctive relief. See pages, 12-13; and 18-19.
(2) How to determine “inadvertence” when a party seeks to claw-back documents that are privileged or otherwise should not have been produced, based on the alleged inadvertent production of those documents, in light of the terms of a confidentiality order, as well as applicable case law. See page 8-10.
In connection with determining whether appropriate procedures were used in order to decide if there was an “inadvertent” production, the court explained “reasonable and customary” protocols for document review to include:
(i) key word searches to generate a pool of responsive documents;
(ii) then using a different set of key word searches to set aside some of those responsive documents as potentially privileged;
(iii) then subjecting those documents to a separate review;
(iv) then reviewing the remaining responsive documents for privilege before production and flagging families of the documents marked as privileged; and
(v) subjecting those to an additional level of review.
The Court described the foregoing as “standard practice.” That procedure broke down in this situation due to the apparent failure of a vendor and one paralegal to follow those protocols. The court still found inadvertence.
The court also described the factors that supported the court’s conclusion that the production was inadvertent, including those referred to the decision in Jefferson v. Dominion Holdings, which discussed the four factors that the court generally considers to determine whether production of discovery materials was inadvertent. See pages 8-10.