Litigants in one of the nation’s preeminent forums for corporate matters, the Delaware Court of Chancery, are now counseled to follow its non-binding “Guidelines to Help Lawyers Practicing in the Court of Chancery,” which encourage cooperation in discovery. However, they must also contend with a new ruling from the Delaware Supreme Court, Christian v. Counseling Resource Associates, that on the face of it potentially promotes contention.
On January 1, the Court of Chancery issued a press release explaining that it was updating its rules “to account for modern discovery demands” and to “bring the court’s rules in line with current practice.” The revised Court of Chancery Rules, consistent with similar updates to the Federal Rules of Civil Procedure, no longer refer to the discovery of only “documents” and “tangible things” but also to electronically stored information (ESI).
The same day, the Court of Chancery also issued the Guidelines that explain parties’ obligations with respect to the preservation of ESI, suggest procedures for collection and review, provide pointers for expedited discovery in certain cases, and encourage parties to meet and confer before bringing any discovery disputes to the court. The court emphasized that the Guidelines, while non-binding, are designed to “encourage communication among counsel” and to “help avoid unnecessary and expensive disputes regarding the discovery process.”
The next day, the Delaware Supreme Court released an opinion that seems to send a different message. In Christian, the court remarked that parties that grant discovery extensions without court approval “do so at their own risk.” If a party misses a discovery deadline, then the opposing party now has two choices under Christian: (1) to “resolve the matter informally” or (2) to “promptly notify the court” of the problem in “the form of a motion to compel, a proposal to amend the scheduling order, or a request for a conference.” If parties choose to resolve discovery disputes informally, they waive the right to contest late filings through “motions to compel, motions for sanctions, motions to preclude evidence, or motions to continue the trial.” The court acknowledged the possibility that under its ruling, “some vital discovery will not be produced until the day before trial. Still, the party prejudiced by the delay accepts that risk by failing to promptly alert the trial court when the first discovery deadline passes.”
More (or less) Cooperation
Will the Christian opinion thwart more cooperative discovery, as envisioned by the Court of Chancery’s Guidelines? In fact, it gives parties even more incentive to seek judicial intervention and file discovery motions to protect their right to contest discovery issues. The ruling also seems to contradict the suggestions in “The Sedona Conference Cooperation Proclamation: Resources for the Judiciary,” which asserts that “formal motion practice on discovery disputes is disfavored.” The Cooperation Proclamation further recommends that judges encourage “parties to make good faith efforts to resolve disputes on their own.” Under Christian, however, the bench may be required to take a far more active role in managing discovery to ensure cases stay on track and litigants may need to take a more contentious position to protect its rights.
Given the complexity of e-discovery, the use of advanced review tools, and the volume of ESI, it will be more important than ever for litigants in Delaware to prepare for the prospect of multiple discovery motions seeking sanctions. To improve the defensibility of their processes, parties may want to engage e-discovery experts who can bolster the defensibility of their review strategy and technology, and testify to the sufficiency of their preservation and collection efforts.