This post was prepared by Frank Reynolds, who has been following Delaware law and writing about it in various publications for over 30 years.
The Delaware Chancery Court recently rejected most of a motion for re-argument of a ruling in which it had found an attorney-client and work-product privilege log deficiently documented in expedited litigation over a non-compete agreement between two biopharmaceutical research companies in Thermo Fisher Scientific PSG Corporation v. Arranta Bio MA, LLC C.A. No. 2022-0608-NAC, letter opinion issued, (Del. Ch. Nov. 28, 2022.)
Vice Chancellor Nathan Cook’s Nov. 28 letter opinion rejected each of the arguments plaintiff Thermo Fisher Scientific PSG Corp. made in support of its bid under Court of Chancery Rule 59(f) to reverse his November 15 order that Thermo must quickly address 563 documents it had withheld without sufficient reason or failed to specify an attorney connection to a communication to justify privilege.
No do-over or re-argument
In declining to grant most of Thermo’s re-argument petition in a multi-front discovery battle, the vice chancellor said, “At bottom, the (Nov.15) Order found that Plaintiff failed to comply with basic logging requirements, and Plaintiff now argues for a “do-over,” which the Order already rejected.” He explained that, “This is highly expedited litigation involving sophisticated parties and counsel with substantial litigation resources. Even setting aside the concerns over gamesmanship, I would still reject the request.”
The ruling should be of interest to Chancery Court practitioners since it examines a long list of what the vice chancellor found to be defective privilege logging and the ways in which a litigant could fall far short of the “heavy burden” a petitioner for re-argument bears.
When Thermo sued Arranta Bio MA, LLC over how supplies of genetic ingredients for biomedical research in which they were jointly involved should be handled, Arranta filed a motion to compel Thermo to fill what it claimed were numerous gaps in its log of nearly two thousand documents it had fully or partially withheld on grounds of attorney-client or work-product privilege.
In a November 15 ruling after oral argument on the privilege log issue, the vice chancellor had ordered that within five business days, Plaintiff must produce to Defendant in unredacted form the 563 documents from its log that Plaintiff had entirely withheld and for which Plaintiff has identified no attorney.
“With respect to Plaintiff’s 1,974 total privilege log entries, approximately 95% repeated one of three generic phrases to describe the purported topic of legal advice,” Vice Chancellor Cook wrote, adding that, “nearly 80% of Plaintiff’s 1,974 entries were entirely withheld (rather than redacted) …and Plaintiff failed to identify an attorney involved for over 33% of the documents that Plaintiff had entirely withheld.”
Laying out general rules for re-argument, he said:
“The Court will deny a motion for re-argument ‘unless the Court has overlooked a decision or principle of law that would have a controlling effect or the Court has misapprehended the law or the facts so that the outcome of the decision would be affected.”
A motion for reargument “may not be used to relitigate matters already fully litigated or to present arguments or evidence that could have been presented before the court entered the order from which re-argument is sought.”
“Where the motion merely rehashes arguments already made by the parties and considered by the Court when reaching the decision from which re-argument is sought, the motion must be denied.”
The vice chancellor said Thermo argues that he misapprehended the law by holding that every entry on the privilege log must name an attorney, but “this is also incorrect. To be sure, a document does not have to be sent to or from an attorney to be properly withheld, and the Order does not hold otherwise—but an attorney needs to be involved somehow and identified.”
“The burden of proving that the privilege applies to a particular communication is on the party asserting the privilege,” he ruled. “
The court exempted a few draft versions of complaints and regulatory filings but otherwise found, “it is unclear why Plaintiff believes that presentations and draft correspondence are so obviously privileged that Plaintiff should be excused from satisfying basic logging obligations.”
Otherwise, the court denied the motion, finding that Plaintiff “has failed to meet its heavy burden to show that re-argument is warranted and instead seeks to relitigate matters that have been fully litigated.”