Court Opinion

ID: 4545454
Source: CourtListenerOpinion
Date Created: 2020-07-01 14:02:30.933648+00
Date Added: 2024-06-11T08:52:15.666699
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

GARY and ANNA-MARIE CUPPELS,
individually and on behalf of all others
similarly situated, > C. A. No.: S18C-06-009 CAK

Plaintiffs,
Vi
MOUNTAIRE CORPORATION, an
Arkansas corporation, MOUNTAIRE

FARMS, INC., a Delaware corporation, and :
MOUNTAIRE FARMS OF DELAWARE,

INC., a Delaware corporation,
Defendants.

Submitted: June 26, 2020
Decided: June 29, 2020

MEMORANDUM OPINION AND ORDER
Upon Plaintiffs’ Motion for Sanctions: GRANTED
Chase T. Brockstedt, Esquire, Stephen A. Spence, Esquire, Baird Mandalas
Brockstedt, 1413 Savannah Road, Ste. 1, Lewes, Delaware 19958, Attorneys for

Plaintiffs.

Philip C. Federico, Esquire, Brent Ceryes, Esquire, Schochor, Federico and Staton,
P.A., 1211 Paul Street, Baltimore, Maryland 21202, Attorneys for Plaintiffs.
F, Michael Parkowski, Esquire, Michael W. Teichman, Esquire, Parkowski,
Guerke & Swayze, P.A., 1105 North Market Street, 19" Floor, Wilmington,
Delaware 19801, Attorneys for Defendants.

Lisa C. McLaughlin, Esquire, Todd L. Goodman, Esquire, John C. Phillips, Jr.,
Esquire, Phillips, Goldman, McLaughlin & Hall, P.A., 1200 North Broom Street,
Wilmington, DE 19806, Attorneys for Defendants.

James R. Wedeking, Esquire, Sidley Austin, LLP, 1501 K Street, N.W.
Washington, DC 20005, Attorney for Defendants.

KARSNITZ, J.
The case before me is a serious, high stakes litigation. The parties
have treated it as such and argued over nearly everything. Zealous representation
is appropriate and commendable. Here, however, I am being asked to examine if
one party has gone beyond the bounds of what is acceptable. Plaintiffs have filed
a second motion for sanctions, and I resolve the motion in my opinion.

I addressed Plaintiffs’ first motion several weeks ago and denied it in
an oral ruling. In that ruling, I expressed deep concern about Defendants’ tactics
and conduct. While I believed at that time Defendants’ conduct supported
sanctions, I exercised my discretion and gave Defendants another chance.' Among
other things, in reviewing the first motion, I was flabbergasted that Defendants
had filed a motion to compel responses to Rule 30” interrogatory answers almost
two years after they had been filed. I have also at, I believe, every conference,
hearing or argument I have conducted to date, warned the parties of the lack of
civility which permeated the case.

If I use a baseball analogy, this is Defendants’ third strike. I have

tried to control the litigation not only through discovery rulings, but also by

 

| While only the first motion for sanctions, I had on at least one prior occasion expressed concern
about Defendants’ litigation strategies.
2 DEL. SUPER. CT. CIV. R. 30.
importuning all parties to act civilly, to operate within Court rules and to take
positions supportable by precedent.

In my opinion, Plaintiffs have met their burden to show both violation
of rulings I or Special Master White have made, and Defendants wrongfully
refused to disclose the contents of documents which are obviously relevant. The
documents inappropriately redacted bear directly upon one of the many contested
issues: whether this Court has jurisdiction of the Defendant Mountaire
Corporation (hereinafter “MC”). The battle over jurisdiction has lasted almost two
years, and, of course, significantly delayed the case. While the old saw “...justice
delayed is justice denied...” can only be taken so far, I give it more than due
consideration. My urging to civility has fallen on deaf ears. I am entering an
order sanctioning all Defendants.

PROCEDURAL HISTORY
On June 13, 2018, Plaintiffs Gary and Anna-Marie Cuppels, in their individual
capacity and on behalf of similarly-situated individuals (collectively, “Plaintiffs”)
filed suit (the “Complaint”) against Defendants Mountaire Corp. (“MC”) Mountaire
Farms, Inc. (“MFT”), and Mountaire Farms of Delaware, Inc. (“MFODI,” along with
MC and MFI, “Defendants”) related to the operation of a chicken processing facility

in Sussex County, Delaware. On July 20, 2018, Defendants separately moved to
dismiss the Complaint (collectively, the “Rule 23 Motions to Dismiss”). Plaintiffs
filed the Amended Complaint on October 12, 2018 (the “Amended Complaint”). Two
weeks later, on October 26, 2018, Defendants moved to dismiss the Amended
Complaint (the “Rule 12 Motion to Dismiss,” along with the Rule 23 Motions to
Dismiss, the “Motions to Dismiss”).

On February 22, 2019, the Court entered an order with respect to the Motions
to Dismiss’, in which it “conclude[d] that limited discovery should be allowed for the
limited purpose of (a) determining whether Plaintiffs can maintain this action as a
class action and (b) deciding whether MC has sufficient contact with Delaware to
permit this Court to exercise personal jurisdiction over it.”* The February 22nd Order
further provided that “[t]he parties may conduct discovery, limited to (a) the elements
of class certification as outlined by Rule 23(b), and (b) MC’s contacts with
Delaware.”

On February 25, 2019, the Plaintiffs propounded a set of Interrogatories,

Requests for Production, and Requests for Admissions directed to Defendants (the

3 D. I. 87 (the “February 22" Order’).
4ld., pp. 3-4.
sId., p. 4.

ME] 33624521v.1
“Jurisdictional Discovery Requests”).° On April 10, 2019, Defendants served their
Responses to Interrogatories and Requests for Production (the “Jurisdictional
Discovery Responses”). ’ Two days later, Plaintiffs sent a letter to the Court, in which
counsel represented that “the parties’ positions on the scope of discovery are
polarized and the Court’s intervention is necessary.’

The Court held an office conference on April 30, 2019, and one day later, the
parties sought clarification of the February 22nd Order.’ On May 14, 2019, the Court
appointed David A. White, Esquire as Special Discovery Master (the “Special
Master”).'° Two weeks later, the Court provided further clarity regarding the scope
of Defendants’ discovery obligations,'' in which the Court authorized Plaintiffs to
seek discovery limited to theories of specific jurisdiction under 10 DEL.C. § 3104(c),
civil conspiracy, and agency.’

On June 4, 2019, Plaintiffs moved to compel Defendants’ supplemental
response to the Jurisdictional Discovery Requests (the “Jurisdictional Motion to

Compel”). Briefing on the Jurisdictional Motion to Compel concluded, and the

6 D. I. 88, D. I. 89, D. I. 90.

7D. I. 106, D. I. 107, D. I. 108.
sD. I. 105.

?D. 1. 118, D. 1. 119.

D). 1. 125,

'D. I. 148 (the “May 29" Order”),
"TId., pp. 9-10.
Special Master issued a thirty-seven page letter decision and opinion granting
Plaintiffs’ request for relief in part.'* Of relevance to Plaintiffs’ current application
for relief, the Special Master decided:

[Jurisdictional Discovery] Request [for Production] No. 11 seeks the
production of minutes from all shareholder meetings and the meetings
of board of directors. The Request is over broad. However, the
requested information could evidence, among other things, MC’s direct
or indirect involvement in the operation of the facilities in Delaware.
See 10 DEL. C. § 3104(c)(3). MC is compelled to produce the minutes
from the meetings of shareholders and the board of directors that
concern (1) the formation of a business for the purpose of operating a
chicken-processing facility in Delaware, (2) the operation of the
facilities in Delaware, (3) the sharing of revenues or expenses among the
Defendants related to the facilities in Delaware, (4) the sharing of
employees among the Defendants at the facilities in Delaware, and (5)
MC’s oversight or supervision of the facilities in Delaware. To the
extent that the parties’ confidentiality order does not address the
treatment of sensitive information that may be contained in these
documents, the parties must first confer regarding a protocol for
redacting the documents. Ifthe parties are unable to reach an agreement
concerning the protection of proprietary or commercially-sensitive
information within ten (10) days, the parties should request a status
conference with the Special Master to further discuss and resolve the
matter. '4

The Special Master granted similar relief with respect to the Jurisdictional Discovery

Request for Production Directed to MFODI."° Defendants took exception to the June

 

'’ D. I. 157 (the “June 2019 Decision”).
'“Id., p. 28.
Id.,p. 34.

ME! 33624521v.1
2019 Decision, '® which the Court denied in large part.'’ The Court described the June
2019 Decision as “robust” and “comprehensive.”'* Other than a limitation imposed
on Defendants’ obligation to respond to a single interrogatory, the Court adopted the
June 2019 Decision in toto."

Following the issuance of the August 2019 Order, the Court stayed this action
to provide the parties with an opportunity to pursue mediation.” The parties’ efforts
to mediate ultimately failed and the stay expired. While Defendants’ subsequent
efforts to comply with the Jurisdiction Discovery Order are unclear, as of the Court’s
Office Conference on December 30, 2019, Plaintiffs insisted that Defendants had not
satisfied their obligations.

In January 2020, Defendants supplemented their response to the Jurisdictional
Discovery Requests.”1 Shortly thereafter, “Plaintiffs complained of ‘extensive

redactions’ undertaken by Defendants in their document production and requested ‘a

 

'°D. 1. 165.

"DP. I. 215 (the “August 2019 Order,” along with the June 2019 Decision, the “Jurisdictional
Discovery Order”).

"Id, p. 4.

"Id.,p.9.

*° See D. I. 226.

*! See Special Master Letter Decision and Order at 3, Cuppels, et al. v. Mountaire Corp., et al.,
C.A. No. $18C-06-009 CAK (Del. Super. Ct. Apr. 30, 2020), White, S.M. (the “April 30
Decision’).
privilege log for all withheld documents and an appropriately detailed redaction

””*? Defendants responded to Plaintiffs’ complaints as follows:

log
As to Plaintiffs’ request for a privilege log for all withheld documents
and a redaction log, these are unnecessary and, therefore, will not be
produced. In his June 19, 2019 decision regarding jurisdictional
discovery and his August 6, 2019 decision regarding class discovery, the
Special Master was clear that Defendants had to produce only
responsive, non-privileged documents and information.”

The war of letters continued, in which Plaintiffs disputed the notion that no privilege
log was necessary." Defendants answered “that while no documents were withheld
from their production on the basis of privilege, ‘certain information contained in the
produced documents [was redacted] on the grounds that the information either was
privileged, confidential, or non-responsive to the relevant request.’”*> Defendants
agreed to produce a redaction log and provided Plaintiffs with a pair of redaction logs

in March 2020 (the “Redaction Logs”).”* The Redaction Logs prompted additional

” Id., pp. 3-4.

3Id., p. 4.

4Td.

Td.

**Id. at pp. 4-5. “The Redaction Logs listed four (4) categories of redacted information: (1) trade
secret information related to pricing, performance, and sales; (2) commercially-sensitive information
related to finances; (3) names of non-party entities; and (4) information that falls outside of the
Jurisdictional Discovery Order. Plaintiffs argue that Defendants’ redactions are improper.” /d., p.
5.

ME] 33624521 v. |
questions, in which Plaintiffs found Defendants’ redactions to be “improper and
unsupported” and demanded an unredacted copy thereof.”’

On April 8, 2020, Plaintiffs formally sought to compel Defendants’ production
of unredacted copies of the documents identified on the Redaction Logs (the
“Redaction Motion to Compel”).”* That same day, Plaintiffs sought the entry of an
order compelling the production of unredacted copies of minutes from Defendants’
meeting of shareholders and board of directors, respectively (the “Meeting Minutes
Motion to Compel”).” The Redaction Motion to Compel and the Meeting Minutes
Motion to Compel presented an area of overlap concerning Defendants’ decision to
redact portions of meeting minutes.*” Defendants redacted the meeting minutes on
the basis of responsiveness,”’ in which they interpreted the June 2019 Order to permit
“the redaction of those sentences, paragraphs, or pages from meeting minutes that did
not touch on the aforementioned subjects.”*

The Special Master issued a letter decision and opinion concerning the

Redaction Motion to Compel and the Meeting Minutes Motion to Compel on April

271d.

Id.

*Id., p. 6.
Id, pp. 5-6.
Ud., p. 7.
Id., p. 19.
30, 2019.7 The April 30 Decision compelled Defendants to produce unredacted
copies of numerous documents, including meeting minutes.** The Special Master
rejected Defendants’ efforts to redact portions of responsive documents,” in which
the April 30 Decision cited to four (4) cases from the district courts sitting in the
Third Circuit in the previous four (4) year period which were adverse to Defendants’
redaction position.*° Further, the Special Master characterized Defendants’
interpretation of the June 2019 Decision as “incorrect and without a basis of support[,
in which he found that the June 2019 Decision] ... excused Defendants from having
to produce any meeting minutes, 1.e., documents, which did not include information
relevant to the subject areas. To the extent that any portion of the minutes from any
meeting discussed one of [the] subject areas [listed in the June 2019 Decision], the
document is responsive and it should be produced in its entirety (subject to the proper

9937

assertion of privilege). Finally, the Special Master rejected Defendants’

confidentiality concerns based on the confidentiality order negotiated by the parties
approximately one year prior to the April 30 Decision, in which the confidentiality

order included strict provisions limiting Plaintiffs’ use of discovery materials.**®

Bid

“Id.

%Id., pp. 13-22.
*Id., pp. 13-18.
TId., p. 20.
sstd., pp. 21-22.

ME] 33624521v.1
Defendants did not take an exception to the April 30 Decision. Pursuant
thereto, Defendants produced unredacted meeting minutes among other documents.
Plaintiffs’ review of the unredacted documents prompted the filing of the Second

Sanctions Motion.

THE CONDUCT WHICH I
FIND PRODUCES THIS RESULT

Not surprisingly, and in the face of the jurisdictional challenge,
Plaintiffs sought production of comprehensive corporate records. Defendants
fought the production and Mr. White ultimately limited Defendants’
responsibilities to production of documents which address five specific areas as
described above,” and generically dealing with topics which were related to MC’s
contacts with Delaware.” This Court affirmed that ruling and I ultimately ordered
the documents be produced by the end of January, 2020.

Defendants produced some documents on time*', but unilaterally
redacted them to allegedly remove irrelevant material. Defendants told me at my
hearing on Plaintiffs’ first motion for sanctions they relied upon a minority view to
support their action. Upon review of the record this is not correct. Defendants

made the redaction only upon their own authority. In reviewing that conduct, the

39 June 19 Decision.
40 Id.
a1 The parties were still fighting over what was to be produced. See April 30 Decision.

10
Special Master found a few cases which supported unilateral redactions, but
rejected the reasoning. Only after being directed to the minority view did
Defendants seize upon it as justification. Defendants misdirection is but another
reason to support the action I take here.” In addition, Defendants in their response
cited authorities which had rejected their position. There is Delaware precedent
from the Federal Court adopting the majority view.” Finally, the Special Master
believed that the redactions had been made by the clients, not counsel.“* Again,
not surprisingly, Plaintiffs filed a motion to compel production of unredacted
documents. Mr. White followed the majority view that full unredacted documents
had to be produced. Defendants redactions were in part predicated upon a claim
of privilege with accompanying privilege log. The privilege logs were of such
poor quality the Special Master ordered new logs.* Defendants relied upon their
determination of relevance and a claim of trade secrets. The latter claim is

especially troubling to me as the parties have entered into a typical confidentiality

42 Defendants argue in opposition to this motion that I have already ruled upon the same
application. While I disagree with the contention, Defendants misdirection at the previous
hearing would cause me to reconsider the decision I made at that time.

43 Del. Display Grp. LLC, et al. V. Lenovo Grp. Ltd., et al., 2016 WL 720977 at *6 (D. Del. Feb.
23, 2016) (“Plaintiffs instead argue that the information about attorneys’ fees is ‘irrelevant and
highly sensitive’. ... This may be true, but such a fact does not entitle Plaintiffs to redact
information, which they deem irrelevant, from otherwise responsive documents.”) (ordering
plaintiffs to produce unredacted versions of royalty reports.)

44 April 30 2020 Decision.

4s Id.

ME1 33624521v.1
11
agreement which covered trade secrets. The claim of privilege was soon
abandoned by Defendants.
In the Special Master’s letter explaining his ruling granting Plaintiffs’
motion to compel production of unredacted documents, Mr. White said
Defendants’
.. Motivation for redacting those documents
is not altruistic. History tells us that they
are not making use of redactions in order to
help Plaintiffs weed through tens of thousands
of pages for relevant information. Defendants
simply do not want Plaintiffs to possess the
redacted information...

The unredacted documents were produced May 11, 2020.

Had the issue been resolved at that point, I would have taken no
further action. But Plaintiffs have now provided me side-by-side comparisons of
the documents in redacted and unredacted forms.*° Even a cursory examination
shows that the redactions were of information which clearly and obviously
covered issues required by Mr. White’s Order to be produced, and which bear
directly on the jurisdictional issue, the same jurisdictional issue which has caused

substantial delay in the case. Had the documents in unredacted form been

produced when they should have, the case would be far closer to resolution.

46 I attach the comparison as an Appendix to this opinion.

12
LEGAL ANALYSIS
I have the inherent authority to manage my docket. I have the
obligation to control parties’ conduct to promote a fair, speedy and just resolution
of cases. Superior Court Civil Rule 1 mandates that I apply all of the rules to
reach a fair and just resolution of cases.

“Sanctions may serve one or more of three proper purposes: punishment,
deterrence, or coercion.”*’ The ability to award sanctions stems from the Court’s
inherent authority to manage its docket and the powers afforded it under the Delaware
Superior Court Civil Rules.“* Delaware Superior Court Civil Rule 37 authorizes the
Court to sanction a party based on its failure to comply with a court order.” The rule

provides, in pertinent part, that if “a party fails to obey an order to provide or permit

discovery ..., the Court may make such orders in regard to the failure as are just ...”°°

The Court’s authority includes the power to compel a non-compliant party to pay its

]

adversary’s reasonable expenses, including attorneys’ fees,°’ in which the rule

“In re ExamWorks Grp., Inc. S’holder Appr. Litig., 2018 WL 1008439, *6 (Del. Ch. Feb. 21,
2018).

“8 Td.; DEL. SUPER. CT. CIv. R. 1, 16, 37.

*” DEL. SUPER. CT. Civ. R. 37(b); Dynacorp, et al. vy. Underwriters at Lloyd’s London, et al.,
2014 WL 4656393, at *3 (Del. Super. Ct. Sept. 18, 2014) (‘Rule 37 gives the Court broad
discretion to impose sanctions and shift costs for discovery violations.”); Pharmerica Long-Term
Care, Inc. v. New Castle RX, LLC, 2010 WL 5130746, at * (Del. Super. Ct. Dec. 8, 2010)
(same).

°° DEL. SUPER. CT. Civ. R. 37(b)(2).

51 Td.

MEI 33624521v.1
13
requires the Court to impose a monetary sanction unless “the failure was substantially
justified or that other circumstances make an award of expenses unjust.”

Defendants assert two principal arguments in opposition to Plaintiffs’ request
for sanctions: (1) the issue was previously decided by the Court; and (2) its redaction
of responsive documents was based on a good faith interpretation of the June 2019
Decision. I reject the first argument. The simple reason is that upon production of
the unredacted documents, the obvious relevance of the documents becomes clear, as
does how Defendants misinterpreted the decisions issued in this case for their own
benefit.

Defendants’ good faith defense also fails. Delaware Superior Court Civil Rule
34 requires a party to produce documents “as they are kept in the usual course of
business ...”°> Delaware Superior Court Civil Rule 5, along with an extensive body
of case law, evidence a clear preference in favor of transparency and access to
information.** Neither the Court nor the Special Master have issued any decisions in
this Action which altered the requirements of these fundamental principles. In fact,

the February 22™ Order, the May 29" Order, the June 2019 Decision, and the August

2019 Order make no reference to redactions, let alone authorize Defendants to redact

2d
“SDEL. SUPER. CT. ClIv. R. 34(b).
“DEL. SUPER. CT. Civ. R. 5.

14
information in those documents, which they deemed responsive, based on their
unilateral determination that portions of such responsive documents were irrelevant
or nonresponsive. Further, the Special Master previously rejected the notion that
Defendants misinterpreted the June 2019 Decision as “incorrect and without a basis
of support.” Iagree. Defendants did not then, and have not now, cited to any legal
authority permitting a line-by-line redaction of information in a responsive document
on the basis of relevance and/or non-responsiveness. This omission, in light of four
recent decisions from the district courts in the Third Circuit rejecting Defendants’
premise, is significant, because Defendants have not advanced any legal authority to
Justify their interpretation of the June 2019 Decision. Defendants’ position runs
contrary to the rules of this Court, the legal findings of the District of Delaware and
its sister courts, and the long-standing practice of attorneys in this State. Defendants’
decision, as opposed to its interpretation of the June 2019 Decisioning, was strategic
and flawed.

Defendants’ reliance on case law in support of their good faith defense also
falls short. First, eBay can be distinguished from this action on the facts. Although
the Court of Chancery compelled the plaintiff to produce unredacted copies of
meeting minutes in eBay, it did not find that defendants were entitled to recoup their

6 April 30 Decision, p. 20.

MEI 33624521v.1
15
expenses, because “the redaction of relevant portions of the minutes was an

inadvertent oversight, not a knowing concealment or the result of grossly negligent

9956 t?

conduct.””” Defendants’ conduct in this action was not inadvertent.’’ The redactions
were intentional, and as discussed above, without any legal basis of support. Next,
while a court may consider a party’s good faith in determining whether sanctions are
appropriate, ** such efforts should be of a party’s own accord and not motivated by

*» Here, Defendants produced unredacted

a pending motion or looming sanction.
copies of the meeting minutes in response to the April 30" Decision. Defendants’
motivation to comply with the April 30" Decision is unknown, but noteworthy
considering their prior failure to produce unredacted copies of the documents in
response to the June 2019 Decision, the August 2019 Order, and the Court’s direction
at the December 2019 Office Conference. For similar reasons, Defendants mistakenly
rely on Dickinson to excuse their history of noncompliance.” The facts underlying
the Second Sanctions Motion bear no resemblance to Dickinson, which concerned the
State of Delaware’s level of compliance with an agreement to reform certain
“eBay Domestic Holdings, Inc. v. Newmark, et al., 2009 WL 3494348, at *5 (Del. Ch. Oct. 29,
The sheet number of redacted documents eliminates the possibility of mistake or neglect.
“Aveta, Inc., et al. v. Bengoa, 986 A.2d 1166, 1181 (Del. Ch. 2009).

*Dyncorp, 2014 WL 4656393, at *3; Pharmerica Long Term Care, Inc., 2010 WL 5130746, at

aon
Dickinson v. Castle, 1991 WL 208467, at *4-5 (Del. Ch. Oct. 15, 1991).

16
correctional facilities.°’ Unlike the present case, the record in Dickinson established
a level of compliance over a prolonged period of time, in which “the history of the
[prior] three years of [the] litigation [had] been one of sustained progress toward
better and better conditions for prisoners ...” The present fact pattern bears more
closely to those underlying the Toussaint decision, which the Dickinson court rejected
in denying the plaintiff's motion for contempt.” Finally, ExamWorks only serves to
bolster Plaintiffs’ request for relief.” In ExamWorks, the court found the petitioners’

misconduct to be “sloppy and haphazard”™ in one respect and the product of

9965

“excusable neglect”®’ in another. In both instances, the nature of the petitioners’

misconduct justified an award of sanctions.° Thus, any notion that Defendants
innocently misinterpreted Delaware Superior Court Civil Rule 34 and the June 2019
Decision — a premise that I expressly reject — is of limited value.

Both case law and common sense dictate that before sanctioning a party,

I must determine a violation of a court order occurred.’ The violation cannot be

6l Td.

“Jd. (“In contrast to the facts in Toussaint, where the court had been faced with a long period of
noncompliance and evidence that, absent coercion, noncompliance was likely to exist again in
the future, the defendants in this case have worked, in my opinion, diligently and in good faith to
comply with the Order ...”) (citing Toussaint v. McCarthy, 597 F. Supp. 1427 (N.D. Cal. 1984)).
°In re ExamWorks Grp., Inc. S’holder Appr. Litig., 2018 WL 1008439.

“Td. at *9.

Jd. at *10.

Id. at *10-11.

67 Dickinson v. Castle, supra.

MEI 33624521v.1
17
merely technical, but must be a failure to obey the court in a meaningful way. Our
courts have authorized the sanction of dismissal or default judgment for discovery
violations.” In a least one case the court has recognized the sanctions of deeming
personal jurisdiction to be admitted.”

Five separate orders required Defendants to produce the documents
requested.”'

In my view the only way to move the case fairly and to demonstrate my
commitment to civility and appropriate conduct is to order sanctions against
Defendants. The time for talking and urging is over.

THE APPROPRIATE SANCTIONS

I will implement the least severe sanctions appropriate under the facts
and circumstances of the case.” Plaintiffs provide me three alternatives:

l. Finding liability against all Defendants.

2. Deferring as a sanction that MC is subject to the jurisdiction of

this Court.

6Id., citing Palmigiano v. DiPrete, 700 F. Supp. 1180 (D.R.I. 1988).

oo DEL. SUPER. CT. CIV. R. 37(b)(2)(c); Hoag v. Amex Assurance Co., 953 A.2d 713 (Del.
2008).

70 Hart Holding Co., Inc. v. Drexel Burnham Lambert, Inc., 1992 WL 127567 (Del. Ch. May 28,
1992).

1 The June 19 Decision; Court Order of August 1, 2019 (D.I. 215); Court Order of December 30,
2019 (D.I. 249); the April 30 Decision; and Court Order of May 8, 2020 (D.I. 360).

n Hoag v. Amex Assurance Co., supra.

18
3. Money sanctions.

I address each suggestion seriatim:
A. Finding Liability

Finding liability is for me the ultimate sanction. Imposing it ends
perhaps the most important part of the case. Plaintiffs’ damage claims are
enormous. While Defendants would still be able to contest the amount of
damages, they would not be able to contest their liability for the damages. I am
unwilling to take that step. Arguably, what Defendants have done would support
the step. I am exercising my discretion and will not impose this sanction.

B. Finding Jurisdiction Over MC

On June 18, 2020, I issued an opinion in which I found and held that
MC is subject to the jurisdiction of this Court. I did so on the merits and my view
of the facts presented. While the relief requested by Plaintiffs is justified given

what has transpired, the suggested relief is, as it turns out, no relief.

MEI 3362452Iv.1
19
C. Money Sanctions

I am left then with the sanction of imposing fees and costs on
Defendants as a sanction. Plaintiffs have requested fees in the amount of
$33,753.00 which were incurred as a result of the fight over documents in the
larger jurisdictional fight. They also requested that I assess against Defendants the
sum of $10,320.25 which represents their share of billings from Mr. White for
work he did addressing the document issues.

I have reviewed Mr. White’s billings. What he has billed is fair and
reasonable, and was billed for time spent addressing the document issues. I assess
it against all Defendants.

Imposing attorney’s fees always to me has an element of arbitrariness.
Plaintiffs ask for $33,750.00. I have no doubt the amount requested represents a
reasonable value of the professional service and effort Plaintiffs expended in
responding to the document issues. However, I am exercising my discretion in
awarding the lesser amount of $18,000.00.

I contemplated assessing the sanctions only against MC. I am not,
but rather am entering an order which holds all Defendants responsible, jointly and
severally, for the money sanctions. I do so because all Defendants are represented

by the same counsel and their strategy has been joint. In my view they should be

20
jointly responsible.

I take the actions I outline here with no joy and with great hesitation.
Defendants are represented by competent, professional counsel. I do not know
where the breakdown in civility and tactics occurred here, and it matters not. It is
my hope that I will not again in this case be presented with issues of sanctions for
inappropriate conduct.

Defendants shall pay to Plaintiffs’ counsel within thirty days of this

opinion and order the following:

Fees: $18,000.00
Costs: 10,320.25
Total: $28,320.25
IT ISSO ORDERED

Sens

cc: Prothonotary

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