Court Opinion

ID: 4657316
Source: CourtListenerOpinion
Date Created: 2021-02-04 15:02:40.076138+00
Date Added: 2024-06-11T08:01:16.526321
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

CHARLES DAVID WOOD, JR., and DNIC              )
INSURANCE HOLDINGS, INC., individually and     )
derivatively on behalf of LONESTAR HOLDCO,     )
LLC; and FREESTONE INSURANCE COMPANY           )
IN LIQUIDATION, through its Receiver,          )
                                               )
                Plaintiffs,                    )
                                               )
           v.                                  ) C.A. No. 2017-0034-JTL
                                               )
U.S. BANK NATIONAL ASSOCIATION, U.S.           )
BANK TRUST NATIONAL ASSOCIATION,               )
ALEXANDER BURNS, SOUTHPORT LANE                )
MANAGEMENT, LLC, SOUTHPORT LANE,               )
L.P., SOUTHPORT LANE ADVISORS, LLC,            )
SOUTHPORT LANE SECURITIES, LLC,                )
SOUTHPORT      INTERMEDIARIES,    LLC,         )
SOUTHPORT RE, LLC, SOUTHPORT LANE              )
GENESIS L.P., SOUTHPORT INSURANCE              )
HOLDINGS, LLC, SOUTHPORT SPECIALTY             )
FINANCE,    LLC,    SOUTHPORT   ASSET          )
FINANCE, LLC, SOUTHPORT EQUITY I, LLC,         )
THE DALMORE GROUP, LLC, DALMORE                )
FINANCIAL,     LLC,    ADMINISTRATIVE          )
AGENCY SERVICES, LLC, HEARTLAND                )
FAMILY GROUP, LLC, GLENN WEBER,                )
DARREN FORTUNATO, and JOEL PLASCO,             )
                                               )
                Defendants,                    )
                                               )
          and                                  )
                                               )
LONESTAR HOLDCO, LLC,                          )
                                               )
                Nominal Defendant.             )

                                OPINION

                      Date Submitted: January 13, 2021
                       Date Decided: February 4, 2021
Michael W. Teichman, Elio Battista, Jr., Judy M. Jones, PARKOWSKI, GUERKE &
SWAYZE, P.A., Wilmington, Delaware; Eric P. Haas, GARDNER HAAS PLLC, Dallas,
Texas; Attorneys for Plaintiffs.

Paul D. Brown, CHIPMAN BROWN CICERO & COLE, LLP, Wilmington Delaware;
William B. Kerr, KERR, LLP, New York, New York; Attorneys for Defendants Alexander
Burns and Heartland Family Group, LLC.

LASTER, V.C.
      Through Heartland Family Group, LLC, Alexander Burns controlled Southport

Lane, L.P., and its affiliates (the “Southport Entities”). Using Lonestar Holdco LLC, the

Southport Entities acquired two companies: Redwood Reinsurance SPC, Ltd., and

Freestone Insurance Company.

      The plaintiffs contend that beginning in 2013, Burns and Heartland orchestrated a

series of interested transactions through which they caused the Southport Entities to

exchange valuable assets held by Freestone and Redwood for less valuable or valueless

ownership interests in other entities that Burns and Heartland controlled, such the Destra

Targeted Income Unit Investment Trusts (the “Challenged Transactions”). The plaintiffs

maintain that the Challenged Transactions eventually rendered Redwood and Freestone

insolvent. Through this action, the plaintiffs seek to recover damages from Burns,

Heartland, and the other defendants.

      In December 2019, the plaintiffs served requests for production of documents on

Burns and Heartland. In January 2020, Burns and Heartland served responses. As to every

request, they invoked “their rights and privileges under the United States Constitution,

including the Fifth Amendment.”

      In February 2020, plaintiffs provided authorities demonstrating that the objection

was not well taken and sought to confer on a path forward. In June, July, August, and

September, Burns and Heartland promised to amend their responses and produce

documents. Those promises proved empty.
       Meanwhile, in July 2020, the plaintiffs served interrogatories and requests for

admissions on Burns and Heartland. In September, Burns and Heartland promised to

respond in October. That promise also proved empty.

       On October 23, 2020, plaintiffs moved to compel the production of documents and

responses to interrogatories. Prompted by that motion, Burns and Heartland served

amended responses to the document requests. In December, Burns and Heartland claimed

they had not refused to produce documents and had asserted more limited objections. Their

responses do not bear that out.

       Burns and Heartland still have not responded to the interrogatories or requests for

admissions. They claim to have prepared responses, but moved for a retroactive extension

in the time to respond so that Burns and Heartland would not (i) have waived their

objections to the interrogatories by failing to serve responses for over seven months and

(ii) be deemed to have admitted the subjects addressed in the requests for admissions by

failing to provide timely responses. Forwarding counsel claims that any delays were due

to his difficulties practicing during the COVID-19 pandemic. Delaware counsel has

remained silent.

       Fact discovery closes on February 26, 2021. At this point, Burns and Heartland have

almost run out the clock. This decision grants the plaintiffs’ motion to compel and denies

the motion for a retroactive extension.

                                            2
                   I.      THE SELF-INCRIMINATION CLAUSE

       The principal issue in dispute is Burns and Heartland’s reliance on the Fifth

Amendment. This court’s decisions do not shed light on how to apply the Fifth Amendment

to requests for production of documents in a civil case.

       The Self-Incrimination Clause in the Fifth Amendment guarantees that “[n]o person

. . . shall be compelled in any criminal case to be a witness against himself.” U.S. Const.

amend V. “The constitutional privilege against self-incrimination is essentially a personal

one, applying only to natural individuals.” United States v. White, 322 U.S. 694, 698

(1944). “[A]rtificial entities are not protected by the Fifth Amendment.” Braswell v. United

States, 487 U.S. 99, 102 (1988).

       Just as an artificial entity may not invoke the Self-Incrimination Clause, a “long line

of cases has established that an individual cannot rely upon the [clause] to avoid producing

the records of a collective entity which are in his possession in a representative capacity,

even if these records might incriminate him personally.” Bellis v. United States, 417 U.S.

85, 88 (1974). Known as the “collective entity doctrine,” this rule applies regardless of

whether the subpoena or request for production is directed to the entity or to the individual

in his capacity as a custodian of the entity’s records. See Braswell, 487 U.S. at 104, 108–

09. In either case, the individual “may not resist a subpoena . . . on Fifth Amendment

grounds.” Id. at 109. In other words, “[a]n individual cannot claim the Fifth Amendment

privilege with regard to business records, even if they are in his own possession.” Doe v.

Somerset, 2019 WL 3564175, at *3 (Del. Super. Aug. 2, 2019).

                                              3
       In this case, the plaintiffs’ requests for production of documents contained thirty-

seven requests directed to Burns and Heartland. In response to all but seven requests, Burns

and Heartland invoked the Fifth Amendment. As to the other seven requests, they

responded with one word: “None.”

       In response to eight requests, Heartland claimed not to possess any documents, and

Burns refused to produce documents based the Self-Incrimination Clause. Those requests

were as follows:

•      Request 15: “All documents and communications concerning the transfer,
       movement, or flow of funds or securities into or out of the following [six identified]
       U.S. Bank accounts between January 1, 2012 and April 30, 2014.”

•      Request 18: “All documents concerning the formation, creation, issuance,
       registration and/or authentication of any Destra investments, units, or securities.”

•      Request 19: “All documents concerning the valuation, certification, reporting and/or
       validity of any Destra investments, units, or securities.”

•      Request 20: “All documents concerning the net asset value(s) of any Destra
       investments, units, or securities.”

•      Request 21: “All documents concerning the sale, transfer and/or exchange of any
       Destra investments, units, or securities.”

•      Request 22: “All documents concerning the identification, ownership and/or
       valuation of any assets owned, directly or indirectly, by any Destra trust.”

•      Request 28: “All communications between October 22, 2013 and April 30, 2014,
       concerning the transfer, sale, exchange, or valuation of any assets owned,
       controlled, or held by Freestone, Redwood, Lonestar, Destra, Constellation,
       Imperial, Tower, or any of the Southport Entities.”

•      Request 29: “Documents sufficient to identify each U.S. Bank account owned,
       controlled, or managed by any of the Southport Entities, Dalmore, Destra,
       Freestone, Redwood, Lonestar, White Rock, FSP Capital, Constellation, Alexander
       Burns, Kevin Adler, Andrew Scherr, Robert McGraw, and/or Michael Morrow
       between January 1, 2013 and April 30, 2014.”

                                             4
Dkt. 287 Ex. 3. These requests seek business records of Heartland to which the Self-

Incrimination Clause does not apply. To the extent that Burns has responsive documents,

he holds them as a custodian of Heartland, not in his personal capacity. Burns’ invocation

of the Self-Incrimination Clause in response to these requests is thus overruled.

       In response to another twenty-two of the requests, Burns and Heartland committed

to produce only those documents “not otherwise subject to Burns’ right to invoke the Fifth

Amendment of the United States Constitution.” See Dkt. 287 Ex. 3 ¶¶ 6–14, 16, 23–25, 27,

30–37. The tenor of these requests is similar to those listed above. The requests seek

business records of Heartland to which the Self-Incrimination Clause does not apply. To

the extent that Burns has responsive documents, he holds them as a custodian of Heartland,

not in his personal capacity. Here too, Burns’ invocation of the Self-Incrimination Clause

is overruled.

A.     The Single-Person-Entity Exception

       Burns argues that the collective entity doctrine does not apply in this case because

he is the sole member of Heartland. The idea that a single-person entity might not be subject

to the collective entity doctrine is traceable to United States v. Doe, 465 U.S. 605 (1984).

There, the Supreme Court of the United States held that “the owner of a sole proprietorship

acts in a personal rather than a representative capacity” when responding to a subpoena

and accordingly could invoke the Self-Incrimination Clause. Id. at 608. In Doe, however,

the sole proprietor operated his business through “an unincorporated sole proprietorship.”

Id. at 607 n.2 (emphasis added).

                                             5
       Four years later, the Supreme Court of the United States revisited Doe in a case

where the sole stockholder of a corporation invoked the Self-Incrimination Clause to

withhold corporate books and records. Braswell, 487 U.S. at 104. The Braswell decision

emphasized the distinction between an unincorporated sole proprietorship and an

individual acting on behalf of an incorporated entity:

       Had petitioner conducted his business as a sole proprietorship, Doe would
       require that he be provided the opportunity to show that his act of production
       would entail testimonial self-incrimination. But petitioner has operated his
       business through the corporate form, and we have long recognized that, for
       purposes of the Fifth Amendment, corporations and other collective entities
       are treated differently from individuals.

Id. In a footnote, the Court left “open the question whether the agency rationale supports

compelling a custodian to produce corporate records when the custodian is able to

establish, by showing for example that he is the sole employee and officer of the

corporation, that the jury would inevitably conclude that he produced the records.” Id. at

118 n.11.

       Although the Supreme Court of the United States declined to address this issue in

Braswell, the overwhelming weight of federal decisions from the courts of appeals

recognizes that the collective entity doctrine applies with equal force to a single-person

entity. The United States Court of Appeals for the First Circuit has held that “the sole

shareholder of a one-man corporation has no ‘act of production privilege’ under the [F]ifth

[A]mendment to resist turnover of corporate documents.” In re Grand Jury Proceedings

(The John Doe Co., Inc.), 838 F.2d 624, 627 n.3 (1st Cir. 1988). The court explained that

the choice to incorporate brings with it “all the attendant benefits and responsibilities of

                                             6
being a corporation,” including the responsibility “to produce and authenticate records of

the corporation . . . .” Id. at 627. In another decision, the same court explained that

       even assuming [the entity] to be a one-man corporation and [the custodian]
       to be that one man, the corporate records are not shielded from production,
       nor may [the custodian] resist a subpoena for those records on the ground
       that the act of production would impermissibly infringe on his Fifth
       Amendment right against self-incrimination.

United States v. Lawn Builders of New Eng. Inc., 856 F.2d 388, 394 (1st Cir. 1988); accord

Amato v. United States, 450 F.3d 46, 53 (1st Cir. 2006). Every other circuit court that has

considered this issue has reached the same conclusion.1

       Burns and Heartland maintain that the collective-entity doctrine should not apply to

a single-member LLC, but that argument lacks force. The principal factor that courts use

when determining whether to apply the collective entity doctrine is whether the

organization is a juridical entity with separate legal existence.2 Case law discussing the

       1
         See In re Twelve Grand Jury Subpoenas, 908 F.3d 525, 527 (9th Cir. 2018)
(holding that sole shareholder or sole employee of corporation or LLC may not “invoke
the Fifth Amendment privilege against self-incrimination to resist producing those
collective entities’ documents” because “the size of the collective entity . . . [is] not
relevant”; “All of our sister circuits to consider this issue have reached the same
conclusion.”), cert. denied, 140 S. Ct. 289 (2019); accord In re Grand Jury Subpoena
Issued June 18, 2009, 593 F.3d 155, 158 (2d Cir. 2010); Grand Jury, 786 F.3d at 258;
United States v. Stone, 976 F.2d 909, 912 (4th Cir. 1992); In re Custodian of Recs. of
Variety Distrib., Inc., 927 F.2d 244, 247 (6th Cir. 1991); see also Bellis, 417 U.S. at 100
(“[N]o privilege can be claimed by the custodian of corporate records, regardless of how
small the corporation may be.”).
       2
          See Bellis, 417 U.S. at 95 (examining whether the entity had an “established
institutional identity independent of its individual [constituents]”); see also Twelve Grand
Jury, 908 F.3d at 529 (drawing no distinction between “one-person corporations” and
“LLCs”).

                                              7
collective entity doctrine draws a line “between incorporated and unincorporated

persons.”3

       The Delaware Uniform Limited Liability Act (the “LLC Act”) makes clear that an

LLC has a separate juridical existence distinct from its members. 6 Del. C. § 18-201(b).

The LLC Act also makes clear that an LLC need only have one member. See id. § 18-

101(8). “This means that the [LLC] has an existence recognized by law as distinct from

that of its members and others just as a corporation is recognized as having a legal existence

separate and apart from its stockholders.” Robert L. Symonds, Jr. & Matthew J. O’Toole,

Delaware Limited Liability Companies § 2.05, at 2-20 (2019). Burns and Heartland are

       3
         In re Grand Jury Empaneled on May 9, 2014, 786 F.3d 255, 259 (3d Cir. 2015)
(discussing Bellis, 417 U.S. at 90). Although the separate juridical status of the entity
prevents a document custodian from relying on the Self-Incrimination Clause, the absence
of separate juridical status does not mean that an individual can rely on the Self-
Incrimination Clause. The Supreme Court of the United States has held that when an
unincorporated organization is a collective entity with many members, then a document
custodian for that entity can be compelled to produce documents and cannot invoke the
Self-Incrimination Clause. See White, 322 U.S. at 701. The White decision framed the
overarching inquiry as follows:

       The test . . . is whether one can fairly say under all the circumstances that a
       particular type of organization has a character so impersonal in the scope of
       its membership and activities that it cannot be said to embody or represent
       the purely private or personal interests of its constituents, but rather to
       embody their common or group interests only. If so, the privilege cannot be
       invoked on behalf of the organization or its representatives in their official
       capacity.

Id. at 701. In White, the Court held that “[l]abor unions—national or local, incorporated or
unincorporated—clearly meet that test.” Id.

                                              8
distinct for purposes of the Self-Incrimination Clause. The collective entity doctrine

therefore applies, notwithstanding the fact that Heartland is a single-person entity.

B.     The Act-Of-Production Doctrine

       Burns also invokes what is known as the act-of-production doctrine. This doctrine

recognizes that the Self-Incrimination Clause applies “when the accused is compelled to

make a Testimonial Communication that is incriminating.” Fisher v. United States, 425

U.S. 391, 408 (1976). The act of producing evidence can have a testimonial dimension if

that act “has communicative aspects of its own.” Id. at 410.

       The Supreme Court of the United States has explained that the act-of-production

doctrine rarely applies when an individual produces documents on behalf of an entity:

       [T]he Court has consistently recognized that the custodian of corporate or
       entity records holds those documents in a representative rather than a
       personal capacity. Artificial entities such as corporations may act only
       through their agents, and a custodian’s assumption of his representative
       capacity leads to certain obligations, including the duty to produce corporate
       records on proper demand . . . . Under those circumstances, the custodian’s
       act of production is not deemed a personal act, but rather an act of the
       corporation. Any claim of Fifth Amendment privilege asserted by the agent
       would be tantamount to a claim of privilege by the corporation—which of
       course possesses no such privilege.

Braswell, 498 U.S. at 109–10 (citation omitted). “Since no artificial organization may

utilize the personal privilege against compulsory self-incrimination, . . . it follows that an

individual acting in his official capacity on behalf of the organization may likewise not

take advantage of his personal privilege.” Bellis, 417 U.S. at 90.

       Under these precedents, Burns cannot invoke the act-of-production doctrine. The

requests seek business records and related documents. To the extent that Burns possesses

                                              9
records, he holds them as a custodian of Heartland. He therefore may not take advantage

of his personal privilege against self-incrimination to avoid production.

       In the unlikely event that Burns were to produce documents in his personal capacity,

his invocation of the Self-Incrimination Clause nevertheless would fail because he has not

made any attempt to show how the act of production could be incriminating. See Grand

Jury Subpoena, 973 F.2d at 51 (rejecting act-of-production argument because proponent

“failed to address” how the act of production would be testimonial and self-incriminating).

And based on the requests themselves, it is not apparent how Burns could make such a

showing. The requests do not seek any categories of documents that are inherently

incriminating; they seek documents relating to the Challenged Transactions. The parties

agree that the Challenged Transactions (whether or not proper) took place, and business

transactions almost always are documented in some form. The mere existence of

documents relating to the Challenged Transactions is not incriminating. Accordingly,

production could not be regarded as making any type of incriminating testimonial

statement or admission.

       Burns also argues that the act of producing the records would provide some

testimonial indication as to their authenticity. But the Supreme Court of the United States

has held that a custodian can be compelled to testify as to the authenticity of corporate

records: “[A] corporate officer who has been required by subpoena to produce corporate

documents may also be required, by oral testimony, to identify them . . . .” Curcio v. United

States, 354 U.S. 118, 125 (1957). Such testimony is ancillary to the act of producing the

records. E.g., United States v. Austin-Bagley Corp., 31 F.2d 229, 234 (2d Cir. 1929)

                                             10
(“[T]estimony auxiliary to the production is as unprivileged as are the documents

themselves.”), cert. denied, 279 U.S. 863 (1929). This decision has already held that the

Self-Incrimination Clause does not enable Burns to withhold the corporate documents that

the plaintiffs seek. Burns therefore could be compelled to authenticate those documents as

corporate records. It follows that any testimonial statement or admission resulting from the

production of those documents does not violate the Self-Incrimination Clause.

                            II.      OTHER OBJECTIONS

       In addition to relying on the Self-Incrimination Clause, Burns and Heartland raised

an assortment of general objections to producing documents. Those objections are

overruled.

       When a party objects to providing discovery, “[t]he burden . . . is on the objecting

party to show why and in what way the information requested is privileged or otherwise

improperly requested.” Van de Walle v. Unimation, Inc., 1984 WL 8270, at *2 (Del. Ch.

Oct. 15, 1984). Generic and formulaic objections “are insufficient.” Id. (internal quotation

marks omitted). For an objecting party to carry its burden,

       the objection must be specific, the party making it must explain why it applies
       on the facts of the case to the request being made, and if the party is providing
       information subject to the objection, the party must articulate how it is
       applying the objection to limit the information it is providing.

In re Oxbow Carbon LLC Unitholder Litig., 2017 WL 959396, at *3 (Del. Ch. Mar. 13,

2017) (collecting authorities); accord Van de Walle, 1984 WL 8270, at *2 (“Objections

should be plain enough and specific enough so that the Court can understand in what way

[the discovery is] claimed to be objectionable.” (quoting 4A Moore’s Federal Practice §

                                              11
33.27, at 33-164 to 33-167)). “[B]oilerplate, generalized objections are inadequate and

tantamount to not making any objection at all.” Oxbow, 2017 WL 959396, at *2 (internal

quotation marks omitted) (collecting authorities).

       Burns and Heartland raised a series of broad, generic, and formulaic objections

which they invoked only to the extent that the objections might apply, without explaining

whether or how they in fact applied or to what extent Burns and Heartland were using them

to limit their responses. The general objections included the following:

•      “Defendants object to the Definitions and the Instructions to the extent they impose
       greater requirements than Delaware law or the Rules of the Court of Chancery.”

•      “Defendants object to the Requests to the extent they seek discovery of material not
       in the possession, custody or control of Defendants, or that is already in Plaintiffs’
       possession, custody or control.”

•      “Defendants object to each Request to the extent such Request is duplicative of other
       Requests.”

•      “Defendants object to the Requests to the extent they seek documents that are not
       relevant to the subject matter involved in the pending action or otherwise not
       proportional to the needs of the case.”

•      “Defendants object to the Requests to the extent they are overly broad and unduly
       burdensome, and in particular any Request that calls for the production of ‘all
       documents’ and/or ‘all communications’ in a particular category.”

Dkt. 287 Ex. 3 (emphasis added). These objections serve only to obfuscate and confuse.

They are overruled.

       Burns and Heartland also lodged a general objection to the phrase “relating to,”

contending that “such phrase is inherently overbroad and potentially encompasses an

enormous number of irrelevant or inadmissible materials, including documents,

communications, and materials that are protected by the attorney-client and work-product

                                             12
privileges.” Dkt. 287 Ex. 3 ¶ G. Burns and Heartland supported this assertion by citing

Rule 26(b) and three decisions from federal district courts in other jurisdictions.

       In this court, requests for documents “relating to” a particular topic are customary.

The term itself is not objectionable. A request might use this formulation in an overly broad

or unduly burdensome manner, but the objecting party must then respond by explaining its

objection with specificity and proposing a reasonable narrowing of the request. Burns and

Heartland did neither of these things. Their objection is therefore overruled.

       Finally, Burns and Heartland object to the requests

       [t]o the extent they seek disclosure of information protected by the attorney-
       client privilege, the attorney work product doctrine or any other applicable
       privilege or immunity, including Burn’s right to invoke the Fifth Amendment
       of the United States Constitution.

Dkt. 287 Ex. 3 ¶ C. The reference to the unidentified possibility of some “other applicable

privilege or immunity” is non-specific and non-substantive. The balance of the objection

would have been acceptable if Burns and Heartland had provided a privilege log, but they

did not. At this point, their claims of privilege are waived. See Mechel Bluestone, Inc. v.

James C. Justice Cos., Inc., 2014 WL 7011195, at *5 (Del. Ch. Dec. 12, 2014).

    III.     THE INTERROGATORIES AND REQUESTS FOR ADMISSION

       Burns and Heartland have waived any objections they might have to the

interrogatories and requests for admissions. Under Rule 33(b), any objections to

interrogatories are waived unless asserted within thirty days of service. Under Rule 36(a),

if a party fails to answer or object to a request for admission within thirty days of service,

                                             13
then the request is deemed admitted. It is undisputed that Burns and Heartland did not raise

objections or provide responses within this timeframe.

       Burns and Heartland have now moved to enlarge their time to respond retroactively,

claiming that their failure to respond was due to excusable neglect. “The Court may grant

a motion to extend the expired time for discovery if a movant shows its failure to complete

discovery was an act of excusable neglect.” Wood v. Brian Collison & Dep’t of Corr., 2014

WL 7149214, at *3 (Del. Super. Dec. 12, 2014). “Excusable neglect is that neglect which

might have been the act of a reasonably prudent person under the circumstances.” Battaglia

v. Wilm. Sav. Fund Soc., 379 A.2d 1132, 1135 n.4 (Del. 1977). A court may provide

additional time if the movant “demonstrates good cause, absent bad faith and undue

prejudice to the other parties.” Wood, 2014 WL 7149214, at *3.

       To establish excusable neglect, Burns and Heartland submitted a declaration of

William B. Kerr, one of their attorneys. They did not offer any other declarations. The Kerr

Declaration blamed the failure to respond on difficulties Kerr encountered in managing his

practice during the COVID-19 pandemic. He averred that he could not respond to

discovery because he was working remotely and inadvertently overlooked the fact that

interrogatories and requests for admissions had been served. He also cited a backlog of

work and the reopening of courts in New York.

       The court is sympathetic to the additional burdens of practicing law during the

COVID-19 pandemic. None of Kerr’s averments, however, support a finding of excusable

neglect. Each lawyer in this case, as well as the court, has been forced to deal with

unforeseen obstacles and difficulties. Kerr delayed providing responses for six months.

                                            14
During this time, he repeatedly represented to plaintiffs’ counsel that he would provide

answers on various dates, only to fail to live up to his commitments.

       Kerr also has not explained why Delaware counsel did not provide the responses.

“Even when forwarding counsel has been admitted pro hac vice and is taking a lead role

in the case, the Court of Chancery does not recognize the role of purely ‘local counsel.’”

James v. Nat’l Fin. LLC, 2014 WL 6845560, at *12 (Del. Ch. Dec. 5, 2014). “The

admission of an attorney pro hac vice shall not relieve the moving attorney from

responsibility to comply with any Rule or order of the Court.” Del. Ct. Ch. R. 170(b). “Our

rules make clear that the Delaware lawyer who appears in an action always remains

responsible to the Court for the case and its presentation.” State Line Ventures, LLC v. RBS

Citizens, N.A., 2009 WL 4723372, at *1 (Del. Ch. Dec. 2, 2009). Delaware counsel could

and should have assisted Kerr in keeping the case on track.

       Given the amount of time that has passed, the plaintiffs would suffer unfair

prejudice if Burns and Heartland now were permitted to assert objections and withdraw

their deemed admissions. Discovery is about to close, and a number of depositions have

already occurred. The motion for a retroactive extension of time to respond to the

interrogatories and requests for admissions is denied.

                                IV.     CONCLUSION

       This decision overrules Burns and Heartland’s objections based on the Self-

Incrimination Clause and their general objections to the production of documents. Burns

and Heartland shall produce all documents responsive to the requests within fourteen days.

The requests for admissions are deemed admitted. Burns and Heartland shall answer the

                                            15
interrogatories in full, within fourteen days, and shall not raise any objections. After

producing documents and answering the interrogatories, Burns shall appear for a second

deposition. Under Rule 37, plaintiffs are awarded the reasonable expenses that they have

incurred in obtaining this relief.

                                          16