This post is an aggregation of miscellaneous worthwhile Delaware corporate litigation developments that was easier to present as one post instead of multiple smaller posts:
1. Case Law Regarding Importance of Formalities to Modify Pretrial Scheduling Orders:
A Delaware Supreme Court opinion of several years ago, highlighted on these pages, emphasized that informal extensions of a scheduling order, without court approval, might not be recognized by the court if the unapproved new deadlines are not met. See Christian v. Counseling Resources Associates. A recent Chancery transcript ruling indicates that there may not be uniform application of that Supreme Court decision in the trial courts. See Greenstar IH Rep, LLC v. Tutor Perini Corp., C.A. No. 12885-VCS, transcript (Del. Ch. Mar. 11, 2019; filed Mar. 27, 2019); see also Vanilla Corp. v. VelQuest Inc., C.A. No. 7459-VCL, transcript (Del. Ch. Jan. 15, 2013). But see and compare: a relatively recent Chancery decision that went to great lengths to emphasize the importance of adhering to scheduling orders and court-imposed deadlines, which was highlighted on these pages.
2. Rule 54 Interpretation:
Court of Chancery Rule 54 allows “costs” to be awarded to the “prevailing party,” but disputes about: (i) who is the prevailing party; and (ii) which exact costs are covered by the rule, are not well developed nuances explained by many reported Delaware court opinions. Not to worry: a recent Chancery transcript ruling added to the paucity of court decisions on this important, esoteric topic by finding that the costs of a supersedeas appeal bond were included as Rule 54 costs when, after a Supreme Court remand, the party who lost in the trial court and posted a bond pending appeal–and became the prevailing party on remand–was entitled to the costs of the supersedeas bond. The court distinguished a prior case where a compromise by the parties on a substitute for a bond did not make it a “necessary expense” in that matter. See In re Oxbow Carbon, LLC Unitholder Litigation, C.A. No. 12447-VCL consol. (Order )(Del. Ch. May 10, 2019). One of the many prior Chancery decisions in this matter was highlighted on these pages–a lengthy post-trial Chancery opinion which was reversed in part on appeal and remanded.
3. Amendments to Court of Chancery Rules of Procedure:
The Court of Chancery Rules are modeled after the Federal Rules of Civil Procedure which were recently amended. Consistent with the recent amendments to the FRCP, the Court of Chancery recently amended Rules 1, 26, 34 and 37–effective on July 1. The press release from the court is at the following link. The order changing the rules is available at this link, and a redlined version of the new rules is available at this link.
In short, highlights of the amendments include the following:
(i) the proportionality standard is imposed, based on the type of the case, as an explicit parameter for the scope of discovery instead of the former “unduly burdensome” standard;
(ii) specific references added to “ESI” for electronically stored information;
(iii) the new rules follow the federal amendments and omit the well-worn standard of “reasonably calculated to lead to the discovery of admissible evidence,” and replace it, in the comment section only, with: “any possibility that the discovery will lead to relevant evidence.”
4. Useful Commentary on “Non-Financial” Caremark Claims:
The Harvard Corporate Governance Blog has a useful blog post about Caremark claims for non-financial matters such as: condoning a culture of harassment, e.g., the Harvey Weinstein matter. It’s a 2018 post, but still relevant today.