Any litigator who has been practicing long enough will confront a challenge with a pre-trial deadline. The Delaware Bar, at least traditionally, has had a custom of freely granting reasonable requests for extensions. But in summary proceedings, where a trial is often scheduled within 90 days of a complaint being filed, special nuances need to be addressed.

Bottom line: A deadline for disclosing trial witnesses will not be extended absent good cause shown. The test is not whether the other side will be prejudiced.

In the recent decision styled PVH Polymath Venture Holdings Ltd. v. TAG Fintech, Inc., C.A. No. 2023-0502-BWD (Del. Ch. Aug. 3, 2023), Magistrate in Chancery Bonnie W. David granted a Motion in Limine to bar the introduction of an expert report at trial that was submitted after the applicable deadline.

Prior Delaware decisions highlighted on these pages exemplify how seriously Delaware courts treat deadlines, especially those enshrined in a scheduling order. See, e.g., these examples. Careful readers may recall a blog post earlier this month about two decisions enforcing deadlines (coincidentally in August of all months).

In this pithy decision, the following key points are noteworthy about a deadline issue in the most common type of summary proceeding: a DGCL Section 220 case:

Highlights

  • A deadline for disclosing trial witnesses will not be extended absent good cause shown. The test is not whether the other side will be prejudiced.
  • Scheduling Orders in summary proceeding are often shorter and less detailed than their more extensive counterparts in a plenary action–but no specifically-delineated deadline for expert witnesses simply means that the deadline for all fact discovery will also include the completion of all expert discovery.
  • The Scheduling Order in this particular case included a deadline–prior to the cutoff for fact discovery–by which witness lists needed to be exchanged, as well as those witnesses to be presented by affidavit, which is not uncommon in a Section 220 trial presented “on a paper record”.
  • Rule 44.1 regarding disclosure of foreign law experts did not supersede the deadlines in the Scheduling Order.
  • The Court explained that deadlines are essential in summary proceedings and that in order to litigate efficiently: “the parties need to cooperate with one another to tee up issues for resolution. There isn’t time for ‘overly aggressive litigation strategies’ and games of ‘gotcha'”. Slip op. at 5.
  • The Court cited an example of a prior Delaware decision the precluded the use of an expert report that was not timely disclosed. See footnote 6.

Postscript: Pursuant to Chancery Rule 144(h), the parties in this matter agreed to submit this case for a final decision by the Magistrate in Chancery.

A recent Delaware Court of Chancery ruling emphasizes the importance of meeting deadlines that are part of a scheduling order, and the consequences for not following those deadlines.  In two separate Orders in the matter of Shareholder Representative Services, LLC v. Alexion Pharmaceuticals, Inc., C.A. No. 2020-1069-MTZ, Order (Del. Ch. Mar. 23, 2023), the court granted a motion to exclude an expert report when the deadline for disclosing the subject matter of expert testimony was not met.  Specifically, six days after the deadline, the identity of the expert and his CV were produced, but not the subject matter of his proposed testimony. That was not disclosed until his expert report was provided 26 days after the deadline for disclosure–on the date that expert reports were due. Neither leave to amend the scheduling order nor consent from the other parties was sought. (FYI: Orders can be cited in briefs in Delaware.)

The court relied on Rule 6(b) which allows the court “for good cause shown” in its discretion to enlarge the period of time by which the parties are required to meet a deadline:  “if requested before it [the deadline] expires, or ‘upon motion made after the expiration of the specified period … where the failure to act was the result of excusable neglect.’’’

In the explanation on the last page of the Order, the court explained that the party involved neither sought an extension before the deadline nor moved for an extension after the deadline, nor did it try to show excusable neglect.  The court noted prior decisions of the Delaware Court of Chancery have stricken an expert report that was submitted late.  See Encite LLC v. Sony, 2011 WL 156181 (Del. Ch. Apr. 15, 2011).

In a second, separate Order in the same case, the court granted a motion in limine to exclude untimely produced documents that a party tried to use as exhibits for trial because they were not produced by the deadline.  In Shareholder Representative Services LLC v. Alexion Pharmaceuticals, Inc., C.A. No. 2020-1069-MTZ, Order (Del. Ch. June 28, 2023), the court explained that the documents requested in discovery were not produced until after the discovery deadline, and were required to be produced even though the opposing party “did not press for them.”  The court cited prior decisions where the court “excluded from trial documents that an expert relied on but were not timely produced.”  See Verition P’rs Master Fund v. Aruba Networks, C.A. No. 11448-VCL (Del. Ch. Nov. 30, 2016).  In sum, the court struck the documents that were sought to be introduced as exhibits because they were responsive to requests for production and there was a failure to timely produce them. Thus, the expert was prohibited from testifying or opining on the contents of those documents.

A recent decision by the Delaware Court of Chancery is useful for litigators who need to know what remedies are available when an opposing party does not provide documents required by court-ordered deadlines: Dolan v. Jobu Holdings, LLC, C.A. No. 2020-0962-JRS (Del. Ch. Sept. 2, 2021).

Quick Overview of Case:

In connection with a summary proceeding in a books and records action pursuant to Section 18-305 of the Delaware LLC Act, certain tax returns were required to be produced pursuant to a Stipulation and Consent Order. The deadlines were not met. Notwithstanding various excuses provided by the defendant and the accountant for the defendant who was preparing the tax returns that were required to have been submitted, the plaintiff filed a motion to show cause why the defendant should not be held in contempt for violating the court-ordered deadlines.

Standard for Civil Contempt:

The court recited the standard for holding a party in civil contempt for not complying with the court order as follows:

“To establish civil contempt, the petitioning party must demonstrate that the contemnors violated an Order of this Court of which they had notice and by which they were bound (footnotes omitted). The petitioning party bears the burden of showing contempt by clear and convincing evidence; only upon carrying that burden will the ‘burden . . . shift to the contemnors to show why they were unable to comply with the order. Importantly, to justify a citation for contempt, the violation must not be a mere technical one, but must constitute a failure to obey the Court in a meaningful way. Further, even where there has been a violation, the Court will consider good faith efforts to comply with the order, or to remedy the consequences of non-compliance. Resolution of a motion to show cause why a party should not be held in contempt is addressed to the discretion of this Court.’” (citations omitted.)

Court’s Reasoning:

The Court determined that the conduct of the defendants in not meeting the Court-imposed deadlines did not rise to the level of contempt because the defendants’ actions did not constitute a failure to obey the court in a meaningful way. Although there was a technical violation, the Court reasoned that in order for the failure to be “meaningful,” the defendants would have needed to act in “willful disregard of the Order or have refused to make good faith efforts to comply.” Slip op. at 5.

The Court also imposed a new deadline which I will refer to as the “really, really final deadline” which the Court explained would not be extended “absent good cause shown.” See footnote 12.

Takeaway:

Most readers have encountered the frustration caused by an opposing party not meeting deadlines, which–especially in a summary proceeding or an expedited proceeding–makes it more difficult for the counterparty to meet their own deadlines, and “jams-up” other deadlines in the case when the opposing party does not “keep on schedule.” This decision exemplifies the difficulty in enforcing even deadlines that are part of a court order, but litigators should keep decisions like this in their toolbox so that in appropriate circumstances even if motion practice is not a panacea, there may be reputational reasons for the nonconforming party to comply, perhaps, in the face of a reluctant motion.

 

City of Monroe Employees’ Retirement System v. Capps, C.A. No. 7788-CS, Order (Del. Ch. Sept. 29, 2012).

Practice Tip Regarding Requests for Extensions in Chancery

The above linked order, with annotations, denied a request for an extension of the due date for filing a brief in an expedited matter.  The annotations from the court at the end of the order provide a practice tip to practitioners in the Court of Chancery.  One takeaway from the comments by the court are that a request for an extension of time to file a brief should not be filed at the very last minute, and in addition, one should not assume that the motion for an extension will be granted.  Therefore, the deadlines in effect should be met unless and until an extension is approved.

 

Two recent letter decisions provide practice tips from the Chancellor for Chancery practitioners regarding coordinating with non-Delaware lawyers working on Chancery cases, as well as nuances of contacting chambers for scheduling purposes. In the matter styled In re SwervePay Holdings Acquisition, LLC, C.A. No. 2021-0446-KSJM (Del. Ch. Oct. 21, 2024), the court provided instruction for non-Delaware lawyers working with Delaware lawyers as follows:

  • The court advised that non-Delaware lawyers should “allow the Delaware attorneys to advise on all aspects of [the] matter, including the relevant deadlines, the need to meet them, and the need to extend basic courtesies like brief extensions when requested.”
  • “… it also bears reminding that non-Delaware attorneys should not dump their brief on their Delaware friends at the last minute.”

See generally Guidelines for Practicing in the Court of Chancery published by the Court.

In Anchorage Police & Fire Retirement Systems, et al. v. Adolf, C.A. No. 2024-0354-KSJM (Del. Ch. Oct. 22, 2024), the Chancellor provided protocols for nuances of scheduling that might be regarded as unwritten rules and insights into how the court schedules hearings.

The court instructed that hearings are scheduled on motions in 90-minute blocks. The court added that if a party needs more than 90 minutes to present a motion “that it is incumbent on that party to request more time through a motion or letter on the docket filed in advance of a hearing.” Slip op. at 2.

The court also informed the parties that when calling chambers for scheduling, the litigants should assume that the Chancellor’s assistant “has a better understanding” of the Chancellor’s schedule, and simply because there is nothing on the docket does not mean that the Chancellor is available at that time.

Vice Chancellor J. Travis Laster of the Delaware Court of Chancery and Professor Elise Bernlohr Maizel recently published a law review article entitled Discovery as a Compliance Problem, available at this hyperlink, 50 J. Corp. L. 53 (2024), which should be read by all lawyers involved in commercial litigation in Delaware.


Highlights include the following bullet points:

  • Civility expectations, and a reminder that the duty of a lawyer to the Court supersedes the duty to a client. See pages 73-77.
  • There is no such thing as “local counsel” in Delaware. That is, Delaware counsel will be held responsible for all court filings and all positions taken–even if out-of-state counsel is taking the lead. See footnotes 148-149 and accompanying text.
  • Deposition rules in Delaware impose more restrictions and duties on lawyers compared to many other states. See page 77.
  • Deadlines in scheduling orders are strictly enforced in Delaware. See page 79.
  • Privilege may be waived if a privilege log is not properly compiled. See pages 79-80.
  • Boilerplate objections to discovery requests are not truly replies at all–especially when the objection does not make clear what exactly is being withheld and what is being produced. See pages 80-82. See also Del. Ct. Ch. R. 34(b) (requiring specific objections and explanations about what is being withheld based on objections.)

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Yesterday, on the same date as the announcement that the Governor of Delaware required the closure of “non-essential businesses” (that apparently is defined not to include law firms),  the Delaware Supreme Court ordered, in essence, all Delaware Courts closed to the public until April 15 (e.g., for in-person access) due to the pandemic that has nearly shutdown most of the U.S. and much of the world. This is a supplement to prior Standing Orders issued by Delaware Courts due to the Covid-19 coronavirus pandemic.

Today, the Chancellor of the Court of Chancery issued a “Statement” clarifying the impact on Chancery of the Supreme Court’s closure of in-person access to the Courts until April 15.

In sum, no trial dates beyond April 15 have been postponed and no existing filing deadlines or discovery deadlines have necessarily been suspended, though the Chancellor’s Statement today expressed that the Courts will be solicitous in extending deadlines, and the Court expects counsel and the parties to be cooperative–and to resolve any scheduling issues without Court involvement–in the tradition of professionalism that defines the Delaware Bar.