Chancery Prioritizes Efficiency in Ruling on Discovery Motions

Morris James LLP

Brown v. Matterport, Inc., 2021-0595-LWW (Del. Ch. Jun. 5, 2023)

The plaintiff sued alleging that the defendants had used lockup restrictions to improperly prevent him from selling shares. The Court of Chancery considered three discovery motions, and the ruling in all three instances focused on the efficiency of the discovery process.

The first motion dealt with the scope of responses to interrogatories. The plaintiff’s interrogatories requested that the defendant “describe communications” pertaining to relevant material. In their answer, the defendant identified specific communications without elaborating on substance. Plaintiff claimed this response was insufficient, but the Court disagreed, reasoning that the response disclosed sources of information and identified key facts. Any further description was better sought in depositions, and the interrogatory responses would make those depositions more productive.

In the second motion, the plaintiff challenged the scope of search as applied to folders on the Defendant’s data system. Plaintiff demanded that the defendant produce from company-shared files on its data system using broad search terms, as opposed to targeted folder searches. The Court found this unreasonable. The terms were overbroad, resulting in hundreds of thousands of document hits, and sampling showed very low responsiveness. The Court did require revised search term reports for suggested limiters at a meet and confer but declined to mandate the inclusion of specific terms. Importantly, the Court noted that shared drive folders are typically identified in custodial interviews and collected in full, rather than via search terms run across the entire network.

Third, the defendant requested a protective order to preclude depositions until completion of written discovery, because the plaintiff stated he may recall deponents after current discovery disputes are resolved. The Court found that, due to the plaintiff’s ongoing discovery requests, it would be an inefficient and unnecessary burden to schedule repeat depositions. The Court held that the plaintiff could take depositions before completion of written discovery, but he may not re-depose witnesses absent a showing of good cause.

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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