Email Users Beware: Companies and Corporate Officers Should Evaluate Email Practices in Light of Delaware Chancery Court Decision

On September 5, 2013, the Delaware Chancery Court ruled that the attorney-client privilege does not protect from disclosure emails sent by corporate officers to their personal attorneys using the company’s email account. In re Info. Mgmt. Servs., Inc. Derivative Litig., No. 8168-VCL (Del. Ch. Sept. 5, 2013), available here. Although the Chancery Court cautioned that its ruling was limited to the facts of the case before it, this decision is consistent with an increased level of scrutiny by the courts to emails arising in the corporate environment. See, e.g., In re Vioxx Products Liab. Litig., 501 F.Supp.2d 789 (E.D. La. 2007). The decision highlights the danger to companies and corporate officials of haphazard email use.

In re Info. was a consolidated case involving two derivative actions brought by two families against each other. Info. Mgmt. at 2-4. Through trusts, each family owned 50 percent of the company, Information Management Services, Inc. (the “Company”), which was privately held. Id. Each of the family trusts filed a derivative action on the Company’s behalf against members of the other family alleging breach of fiduciary duty. Id. The two actions were consolidated. Id. at 4.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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