Court Opinion

ID: 6339012
Source: CourtListenerOpinion
Date Created: 2022-05-10 13:02:02.871388+00
Date Added: 2024-06-11T15:49:10.024188
License: Public Domain

COURT OF CHANCERY
                                    OF THE
                              STATE OF DELAWARE
 LORI W. WILL                                               LEONARD L. WILLIAMS JUSTICE CENTER
VICE CHANCELLOR                                                  500 N. KING STREET, SUITE 11400
                                                                WILMINGTON, DELAWARE 19801-3734

                             Date Submitted: May 3, 2022
                              Date Decided: May 9, 2022

A. Thompson Bayliss, Esquire                 Raymond J. DiCamillo, Esquire
Michael A. Barlow, Esquire                   Kevin M. Gallagher, Esquire
Eliezer Y. Feinstein, Esquire                Daniel E. Kaprow, Esquire
Abrams & Bayliss LLP                         Caroline M. McDonough, Esquire
20 Montchanin Road, Suite 200                Richards, Layton & Finger, P.A.
Wilmington, Delaware 19807                   920 North King Street
                                             Wilmington, Delaware 19801
Peter J. Walsh, Jr., Esquire
Matthew F. Davis, Esquire
Abraham C. Schneider, Esquire
Patrick A. Lockwood, Esquire
Potter Anderson & Corroon LLP
1313 North Market Street, 6th Floor
Wilmington, Delaware 19801

                RE:   In re Aerojet Rocketdyne Holdings, Inc.
                      C.A. No. 2022-0127-LWW
Dear Counsel:

       This letter addresses the motion to quash and for a protective order filed by

non-party Gibson Dunn & Crutcher LLP (“GDC”).                   The motion concerns

subpoenas duces tecum and ad testificandum that plaintiff Warren Lichtenstein

served on GDC. For the reasons discussed below, the motion is denied with one

exception.

       GDC is the longtime counsel of Aerojet Rocketdyne Holdings, Inc. (the

“Company”) and currently serves as litigation counsel for the defendants, who
C.A. No. 2022-0127-LWW
May 9, 2022
Page 2 of 7

comprise half of the Company’s board of directors (the “Board”). The plaintiffs—

who make up the other half of the Board—served the subpoenas on March 7, 2022

and April 14, 2022, respectively.1

         On April 16, 2022, Lichtenstein’s counsel provided a proposed search

protocol for GDC’s documents.2            The protocol sought documents from two

corporate partners at GDC and from litigation partner Randy Mastro. GDC did not

produce documents in response to the subpoena duces tecum but served written

responses and objections.3 GDC also did not engage with Lichtenstein’s counsel

on the proposed search protocol.

         GDC’s motion was filed on April 27, 2022. It rests, in large part, on the

assertion that the plaintiffs’ subpoenas seek privileged information.4              Similar

arguments were addressed in the court’s May 5, 2022 letter decision regarding

Lichtenstein’s motion to compel.5         The court explained that the plaintiffs are

entitled to access the Company’s privileged information because they are

incumbent Board members and not adverse to the Company. For the same reasons,

1
    Dkts. 62, 117.
2
 Pl.’s Opp’n to Mot. to Quash and for Protective Order (“Pl.’s Opp’n”) Ex. 18 (Dkt.
184).
3
    Pl.’s Opp’n Ex. 7.
4
    Mot. to Quash and for Protective Order (“Mot. to Quash”) ¶¶ 18-25 (Dkt. 161).
5
    Dkt. 205.
C.A. No. 2022-0127-LWW
May 9, 2022
Page 3 of 7

the plaintiffs are entitled to the Company’s privileged communications with its

outside counsel at GDC.

         GDC further argues that the subpoenas seek duplicative discovery that has

been or could be obtained from the defendants or the Company.6 Duplicative

requests are “forbidden when the objecting party shows that the discovery request

is fully duplicative and meant to harass the producing party.”7 Though GDC’s

production may overlap in some respects with the productions from the defendants

or the Company, I cannot conclude that the document requests are fully duplicative

or intended to harass. Search parameters can be negotiated to reduce duplication

while allowing for the discovery of relevant, admissible information.

         GDC has also not shown that the subpoenas are overbroad or seek irrelevant

information.8 The scope of discovery permissible under Court of Chancery Rule

26 is “broad and far-reaching.”9 The plaintiffs are alleging that the defendants

used Company resources—including Company counsel—to advance the

6
    Mot. to Quash ¶¶ 26-30.
7
  Grace Bros., Ltd. v. Siena Hldgs., Inc., 2009 WL 1547821, at *1 (Del. Ch. June 2,
2009); see Hamilton P’rs v. Highland Cap. Mgmt. L.P., 2016 WL 612233, *6 (Del. Ch.
Feb. 2, 2016) (finding a discovery request “neither fully duplicative nor oppressive”
where it was reasonable to suspect that parties would submit different documents for the
same requests and where submitting the same requests would allow the plaintiff to test
for completeness and accuracy).
8
    Mot. to Quash ¶¶ 31-33.
9
    Cal. Pub. Emps. Ret. Sys. v. Coulter, 2004 WL 1238443, at *1 (Del. Ch. May 26, 2004).
C.A. No. 2022-0127-LWW
May 9, 2022
Page 4 of 7

defendants’ interests on matters over which the Board was deadlocked. Though I

express no view on the merits of that issue, the discovery sought appears to be

sufficiently relevant.     Certain comprehensive requests, such as those seeking

documents related to all aspects of GDC’s representation of the Company

regardless of time period, can likewise be narrowed through an appropriate search

protocol.

         In addition, GDC has not demonstrated that the discovery sought is overly

burdensome. Although search term hit reports are not necessarily required for a

party opposing discovery to demonstrate burden, some credible showing of burden

must be advanced.10 GDC’s argument seems to be that it would be burdensome for

it to produce documents given the exigencies of this case.

         Circumscribed discovery lends itself to expedited litigation as a matter of

practicality.     Often, that tailoring of discovery comes in the form of search

parameters (a date range, custodian list, and search terms). The search parameters

proposed by Lichtenstein include just three document custodians and, for many

requests, a date range spanning less than two months.11 But, again, GDC did not

10
  See Fortis Advisors LLC v. Johnson & Johnson, 2021 WL 4314115, at *2-3 (Del. Ch.
Sept. 21, 2021).
11
     Pl.’s Opp’n Ex. 18.
C.A. No. 2022-0127-LWW
May 9, 2022
Page 5 of 7

undertake negotiations on the parameters Lichtenstein proposed before filing this

motion.

         GDC makes one specific argument concerning burden: that discovery from

opposing counsel in expedited litigation is manifestly burdensome.                 I am not

entirely persuaded by that argument given the unique circumstances here. GDC is

not just trial counsel—it has long served as counsel to the Company and allegedly

participated in events that led to this litigation. “It is the case that when attorneys

participate in the occurrence that gives rise to or relates to the legal claims being

litigated, the information they may thus learn is generally not protected from

discovery.”12 The discovery the plaintiffs seek from the defendants’ trial counsel

is, however, a different matter.13

         “Upon motion by a party or by the person from whom discovery is sought,

and for good cause shown, the Court . . . may make any order which justice

requires to protect a party or person from annoyance, embarrassment, oppression,

or undue burden or expense.”14             The court will limit discovery if it “is

unreasonably cumulative or duplicative, or is obtainable from some other source

12
     Rainbow Navigation, Inc. v. Yonge, 1988 WL 13564, at *1 (Del. Ch. Feb. 11, 1988).
13
   For clarity, “trial counsel” refers to the litigators at GDC representing the defendants in
this lawsuit and at trial, not GDC as a whole.
14
     Ct. Ch. R. 26(b).
C.A. No. 2022-0127-LWW
May 9, 2022
Page 6 of 7

that is more convenient, less burdensome, or less expensive.”15 “[T]he discovery

process as it might apply to trial counsel,” in particular, must be carefully

supervised by the court.16         Discovery of trial counsel may put at risk “the

confidentiality      of   client   communications,”    the   “prospect    of   possible

disqualification,” and “harassment or other improper motivation to a greater extent

than ordinarily occurs.”17

           Lichtenstein asserts that he asks for this discovery primarily to understand

who authorized the retention of GDC as litigation counsel in February 2022 and

the February 3, 2022 letter from Mr. Mastro accusing the plaintiffs of

misconduct.18        The plaintiffs have other avenues to obtain this information,

including discovery that the court expects is being provided given its ruling on the

plaintiffs’ motion to compel, that do not implicate the special considerations raised

when discovery is directed to trial counsel. Those other sources of discovery are

also less burdensome. Mr. Mastro—who is named as a document custodian in

Lichtenstein’s search protocol—is the defendants’ lead trial counsel for a trial set

15
     Id.
16
  Rainbow Navigation, 1988 WL 13564, at *1; see also In re Oxbow Carbon LLC,
Unitholder Litig., 2017 WL 2814879 (Del. Ch. June 29, 2017) (ORDER).
17
     Rainbow Navigation, 1988 WL 13564, at *1.
18
     Pl.’s Opp’n ¶ 27.
C.A. No. 2022-0127-LWW
May 9, 2022
Page 7 of 7

to begin in two weeks. Accordingly, GDC is entitled to a protective order insofar

as the subpoenas seek discovery from the defendants’ trial counsel.

      With that exception, the motion is denied. The court expects the parties to

expeditiously meet and confer on an appropriate search protocol for GDC’s

production and the timing of a deposition (if any). The court encourages the

parties to endeavor to minimize unnecessary duplication with regard to documents

sought from GDC given the approaching trial. A rolling production should begin

as soon as possible and be completed promptly.

                                      Sincerely yours,

                                      /s/ Lori W. Will

                                      Lori W. Will
                                      Vice Chancellor

cc: All counsel of record (by File & ServeXpress)