This is the sixth in a series of posts summarizing the 7 most important eDiscovery cases in Delaware in 2014.
Gloria James v. National Financial LLC, and Loan Till Payday LLC, C.A. No. 8931–VCL, December 5, 2014.
Ian McCauley previously summarized James v. National Financial in our blog post of December 29, 2014 which highlighted Delaware Counsel's discovery obligations as well as the sanctions that may be imposed for not complying with those obligations. The original post can be read in its entirety here: http://www.morrisjames.com/blogs-Delaware-eDiscovery-Report,court-of-chancery-clarifies-delaware-counsels-role-in-discovery.
The three key points made by Vice Chancellor Laster in his opinion were:
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“Technological incompetence is not an excuse for discovery misconduct.” Counsel’s excuse to the Court that he is not “computer literate” was not a valid one. Technological competence is specifically included in Rule 1.1 of the Delaware Lawyers’ Rules of Professional Conduct. The Court noted that if counsel does not feel confident in dealing with discovery issues, they should partner with either eDiscovery counsel or an outside consultant or vendor.
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“The Court of Chancery does not recognize the role of purely ‘local counsel’….This expectation is particularly important during discovery.” Vice Chancellor Laster reiterated that Delaware counsel cannot serve as a mere mail-drop and cannot simply sign documents prepared by outside counsel. Instead, Delaware counsel must play an “active role in the discovery process, including in the collection, review, and production of documents.” At the very least, Delaware counsel must ensure outside counsel is aware of what the Court expects in discovery.
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“Although I believe that entry of default judgment would be warranted on these facts, I will not grant that remedy in light of the Delaware Supreme Court’s guidance about invoking the ultimate sanction and the availability of less punitive consequences.” Instead of granting a default judgment, Vice Chancellor Laster deemed admitted a key fact against the Defendants case. The Vice Chancellor also granted fees and expenses.
