Sanction For Deposition Misconduct

The Delaware Chancery Court recently issued a letter opinion dealing with allegations of deposition misconduct

This letter opinion resolves one of the two pending motions for sanctions in the lawsuits that Elizabeth Elting and Philip R. Shawe have filed against each other…

Shawe moved under Court of Chancery Rule 30(d) for monetary sanctions against Elting and the law firm of Kramer Levin Naftalis & Frankel LLP (“Kramer Levin”) for the conduct of Kramer Levin attorney Philip Kaufman in defending the deposition of Ronald Greenberg, another Kramer Levin attorney, on February 6, 2015. The basis for Shawe’s motion is that Mr. Kaufman inappropriately instructed Mr. Greenberg not to answer many of the seventy-five questions for which Mr. Kaufman gave that instruction, and that Mr. Kaufman terminated the deposition prematurely.

Mr. Kaufman is admitted pro hac vice in these actions and thus is bound by the Court of Chancery Rules…

Having reviewed the complete transcript of Mr. Greenberg’s deposition, I conclude that Mr. Kaufman’s defense of that deposition did not comport with the standards required by the Court of Chancery Rules. Many of the questions that Mr. Kaufman instructed Mr. Greenberg not to answer were benign and did not implicate any privilege.

Ruling

The litigation of these actions has been a heated affair to be sure, but that does not excuse unprofessional conduct. Mr. Kaufman’s defense of this deposition crossed the line between zealous advocacy and unprofessional conduct, and frustrated the fair examination of Mr. Greenberg. The argument that Shawe was not prejudiced because he elected not to elicit testimony from Mr. Greenberg at trial is unpersuasive. The fact that Shawe later chose not to call Mr. Greenberg as a witness at trial does not relieve Mr. Kaufman of his obligations under the Court of Chancery Rules, and the decision not to call Mr. Greenberg appears to have been a legitimate strategic choice given how the issues in the trial unfolded. Additionally, unclean hands does not apply here because Shawe’s sanctions motion for misconduct during the deposition of Mr. Greenberg does not directly relate to the very serious allegations of discovery misconduct that are the subject of Elting’s pending motion for sanctions…

In my opinion, and as contemplated by Court of Chancery Rule 30(d)(2), Shawe is entitled to his reasonable costs and attorneys’ fees incurred in preparing and conducting the deposition of Mr. Greenberg and in briefing the motion. The sanction will be assessed solely against Kramer Levin because Mr. Kaufman was acting primarily as counsel for the witness, Mr. Greenberg, during the deposition. Shawe’s counsel is directed to file an affidavit within ten business days setting forth his reasonable costs and attorneys’ fees as provided above, and a proposed order awarding such costs and fees within ten business days of entry of that order.

(Mike Frisch)