Grunstein v. Silva

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Justia Opinion Summary

CFG produced to defendants 5,000 pages of pleadings and court filings from an action pending in Maryland and later produced 238,000 pages worth of its own documents that it had already produced in the Maryland action. CFG produced all of the documents as Highly Confidential, so that only four of the attorneys representing defendants could review the documents. Defendants moved to vacate the designation. The court determined that defense attorneys may review the documents if they certify that during the pendency of this case they will neither be involved in the New York Litigation, nor represent any client in a matter involving the purchase or sale (including financing) of any nursing home or adult assisted living center. The Court declined to de-designate any of the documents as Highly Confidential; CFG, through its counsel, is to review, within 30 days of the date of this letter opinion, all of the Discovery Documents that refer to Beverly, and determine whether those documents are entitled to be designated Highly Confidential.

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COURT OF CHANCERY OF THE STATE OF DELAWARE JOHN W. NOBLE VICE CHANCELLOR 417 SOUTH STATE STREET DOVER, DELAWARE 19901 TELEPHONE: (302) 739-4397 FACSIMILE: (302) 739-6179 July 2, 2012 Arthur L. Dent, Esquire Potter Anderson & Corroon LLP 1313 North Market Street Wilmington, DE 19801 Re: Bruce E. Jameson, Esquire Prickett, Jones & Elliott, P.A. 1310 King Street Wilmington, DE 19801 Grunstein v. Silva C.A. No. 3932-VCN Date Submitted: June 22, 2012 Dear Counsel: On March 19, 2012, CFG produced to Defendants 5,000 pages of pleadings and court filings from an action pending in Maryland Capital Funding Group Inc. v. Walker & Dunlap, LLC, Case No. 327075 (Cir. Ct. Md. Feb 17, 2010) (th .1 On April 23, 2012, CFG produced to Defendants 238,000 pages worth of its own documents that it had already 1 The background facts have been set out before. Grunstein v. Silva, 2011 WL 378782 (Del. Ch. Jan. 31, 2011); Grunstein v. Silva, 2009 WL 4698541 (Del. Ch. Dec. 8, 2009). Those facts will not be restated here. The Court will generally employ the same nomenclature as was used in its previous opinions addressing this prolonged dispute. Grunstein v. Silva C.A. No. 3932-VCN July 2, 2012 Page 2 produced in the Maryland Action the Court Defendants, are allowed to view those documents. *** on all of the Maryland Documents. In the alternative, the Defendants contend that CFG initially produced all of the Maryland Documents as Highly Confidential, but agreed to go back and determine which documents were actually entitled to that designation, and the Defendants seek to hold CFG to that agreement. The Defendants further contend that they have asked CFG if additional Dechert attorneys could review the Maryland Documents and that CFG has refused unless Grunstein v. Silva C.A. No. 3932-VCN July 2, 2012 Page 3 in those areas [during the pendency of 2 The Defendants argue that other Dechert attorneys should be allowed to review the Maryland Documents without having to make that certification.3 CFG contends that it only agreed to produce the Maryland Documents, many of which may be irrelevant to this case, because the Defendants agreed that those documents could be produced with Highly Confidential designations. CFG argues that the Defendants should be held to that agreement. With regard to the certification it is demanding of Dechert attorneys, CFG argues that Dechert represents parties in litigation in New York between Rubin Schron and Grunstein , and that Dechert may also represent other actual or potential customers or competitors of CFG. Therefore, CFG argues that Dechert attorneys who view the Maryland Documents must make the certification that CFG has proposed in order to assure protected from improper use and disclosure. 2 3 Originally, the Defendants also objected to CFG certain interrogatory responses, supplemental document productions, and depositions as Highly Confidential. See id. at ΒΆΒΆ 4-5. The parties have resolved those objections. Grunstein v. Silva C.A. No. 3932-VCN July 2, 2012 Page 4 *** The Court Documents, documents created for the Maryland Action, have been designated Highly Confidential pursuant to an order entered by the Circuit Court of Maryland. The Defendants may be correct that the parties to the Maryland Action decide whether to designate specific Court Documents as Highly which Court Documents are Highly Confidential. Nevertheless, the parties to the Maryland Action are able to designate Court Documents as Highly Confidential because of a protective order entered by the Circuit Court of Maryland. The Circuit Court of Maryland has authorized the procedure by which the Court Documents, documents created for the Maryland Action, have been designated Highly Confidential. This Court is necessarily wary of de-designating documents as Highly Confidential when a court of another state, for which those documents were created, has given its imprimatur to the Highly Confidential designation.4 4 See, e.g., Aveta Inc. v. Bengoa mindful of the importance of comity towards courts in other jurisdictions, and I did not want to issue an order that would tread on the prerogatives and jurisdiction of my judicial colleague in Grunstein v. Silva C.A. No. 3932-VCN July 2, 2012 Page 5 Moreover, if there is a unique set of facts that would compel treading on the jurisdiction of complaint with regard to the Court Documents is that an affidavit, sworn by Dwyer , and attached to the complaint in the Maryland Action, contains important facts about CFG. The Defendants received the Court Documents on March 19, 2012. Approximately seven weeks later, on May 10, 2010, who is authorized to view the Court Documents, deposed Dwyer pursuant to Court of Chancery Rule 30(b)(6).5 Most, if not all, important facts in the Dwyer Affidavit could have been brought out through the Rule 30(b)(6) deposition of Dwyer, and the Defendants no longer claim that that deposition is improperly designated.6 Therefore, the Court will not de-designate any of the Court Documents. *** The Discovery Documents, unlike the Court Documents, were not created for the Maryland Action. The Discovery Documents are CFG documents that happened to be produced in the Maryland Action. Therefore, although those 5 6 See supra note 3. Grunstein v. Silva C.A. No. 3932-VCN July 2, 2012 Page 6 documents have been designated Highly Confidential in the Maryland Action, that designation does not bind this Court, at least as to those documents designated by CFG. CFG does not argue otherwise. Rather, it argues that it only agreed to produce all of the Discovery Documents because the Defendants agreed to accept those documents subject to the Highly Confidential designations entered in the Maryland Action. There is some evidence to support that position.7 There is, produce all of the Discovery Documents as Highly Confidential, and then go back, look at the Discovery Documents, and determine which were actually entitled to Highly Confidential treatment.8 9 7 Although the agreement reached between CFG and the Defendants is See the documents produced in our case in your case subject to the Highly Confidential designations and the restrictions 8 See have had a chance to review them, all of the documents produced to date by Capital Funding 9 Miles v. Cookson, 677 A.2d 507, 508 (Del. Ch. 1995) (citing Dann v. Chrysler Corp., 166 A.2d 431, 432 (Del. Ch. 1960)). Grunstein v. Silva C.A. No. 3932-VCN July 2, 2012 Page 7 probably closer to what the Defendants suggest, many of the Discovery Documents produced in the Maryland Action are likely irrelevant to this action. Thus, CFG (or, more specifically, its counsel) is to review, within 30 days of the date of this letter opinion, all of the Discovery Documents that refer to Beverly and to determine in good faith whether those documents are entitled to be designated Highly Confidential. With regard to all of the other Discovery Documents, the Defendants may request that CFG de-designate any document that they believe in good faith is relevant (or could likely be used to discover admissible evidence) and not entitled to Highly Confidential treatment. *** The last (at least for now) dispute is over what certification Dechert professional responsibilities will often be sufficient assurance that she will not improperly use or disclose confidential information. The Court, however, does recognize th of parties in the New York Litigation. The certification that CFG has requested, however, would carry too much risk of unknowing and unintentional violation. Grunstein v. Silva C.A. No. 3932-VCN July 2, 2012 Page 8 The Court adopts the following formulation: Dechert attorneys may review the Maryland Documents if they certify that during the pendency of this case they will neither be involved in the New York Litigation, nor represent any client in a matter involving the purchase or sale (including financing) of any nursing home or adult assisted living center. *** In sum, the Court will not de-designate any of the Court Documents as Highly Confidential; CFG, through its counsel, is to review, within 30 days of the date of this letter opinion, all of the Discovery Documents that refer to Beverly, and determine whether those documents are entitled to be designated Highly Confidential; and Dechert attorneys may review the Maryland Documents if they certify that during the pendency of this case they will neither be involved in the New York Litigation nor represent any client in a matter involving the purchase or sale (including financing) of any nursing home or adult assisted living center. Grunstein v. Silva C.A. No. 3932-VCN July 2, 2012 Page 9 IT IS SO ORDERED. Very truly yours, /s/ John W. Noble JWN/cap cc: Register in Chancery-K