A Blog About Intellectual Property Litigation and the District of Delaware

Fire Extinguisher
Piotr Chrobot, Unsplash

An interesting transcript just hit the docket in CBV, Inc. v. ChanBond, LLC, C.A. No. 21-1456-GBW (D. Del.), a contract case, after the transcript restrictions expired. The hearing itself took place back in April, before Judge Noreika.

In the case, defendant ChanBond filed a letter seeking emergency relief after it inadvertently served a sealed filing on out-of-town counsel for another party, who allegedly took the position that he need not maintain the confidentiality of the document, either under the Court's order sealing the document or local rule 26.2 (which provides a confidentiality obligation prior to the entry of a protective order, as explained below).

Out-of-town counsel responded to the request for emergency relief by asking for notice and an opportunity to be heard before the Court takes any action.

The Court scheduled a hearing on the issue, and—echoing recent events—out-of-town counsel moved for leave to attend remotely. After the Court denied leave to attend remotely, he simply did not attend the hearing at all.

According to the transcript, the Court did not react favorably to counsel's failure to show:

THE COURT: Okay. And is the counsel who is the subject of this and who asked to be excused and I didn't excuse here?
MR. WILLIAMS: Stephen Rader is not here. He's in California Your Honor. We are the local counsel. We will be presenting today.
THE COURT: He was the one who was the subject of the motion. He is the one who was acting apparently inappropriately and asked for a hearing and due process to be heard. And he asked to be excused and I denied that motion. So where is he? Why isn't he here? I denied the motion, right, you saw that you shall. And he just decided he didn't care, he wouldn't come.
MR. WILLIAMS: Your Honor, I guess the question is, what is the agenda for the hearing today?
THE COURT: It's on the request to be heard on the violation of the local rule on confidentiality. And he is a key player in the violation that has been asserted.
And he asked to be excused from attending in person and I denied that request. So now he has just decided not to attend at all? Is that what I am to understand?
MR. WILLIAMS: It's correct, Your Honor, that he is not attending. . . .

The Court also made clear that—unsurprisingly—counsel cannot just decide on their own that a sealed document doesn't warrant confidential treatment:

THE COURT: . . So it was marked confidential. There was a court order where I allowed it to be treated as confidential. Was it treated as confidential as in kept by only outside counsel in the case?
MR. WILLIAMS: I need to explain the timeline, Your Honor.
THE COURT: I need to just know the answer to that question.
MR. WILLIAMS: Okay. Well, the document was sent to people on ECMF, everyone concedes that, I'm certainly not on it, Brian Crawford is, he wasn't in the office. Mr. Rader received it. I don't know who he shared it with specifically.
THE COURT: How are you here today? Mr. Rader didn't bother to show up because he just didn't like that I wanted him here in person and he asked to be excused and didn't come. And now you're saying I don't know what Mr. Rader did with it. If you were going to come and he wasn't going to be here, don't you think you should have an answer to that?
Because the question is, the question is not right now whether it should have been marked confidential.
I get it. You have questions on that. But the fact is it was. And you didn't come to me and say this shouldn't be confidential, you just did something with it. So we now need to know what was done with it, has it been recovered and then at some point we can address whether it really should be or part of it should be marked confidential. So let's start with the part that I care about right now and the reason that I had the hearing, which is, what was done with the document? Were people other than outside counsel given access to the document?
. . .
THE COURT: Was anything done with it to make that document public?
MR. WILLIAMS: Well, the question is, I think Mr. Rader's understanding was the document should have already been public.
THE COURT: Again, I get it. Totally understand. But Mr. Rader doesn't get to make that decision. I do. Okay? And you have to come to me to get me to make that decision, you don't get to just decide it. You do understand my concerns here which is your client went to intervene in this case. One of the grounds for intervention asked me to exercise my discretion. And I now have some concerns about whether if I allow your clients to be in the case you're just going to have my orders violated left and right without any respect whatsoever for the Court. Okay? And I have counsel who can't even be bothered to show up and answer the questions.

Finally, the Court rejected the idea that Local Rule 26.2 applies only to discovery, as opposed to court filings:

MR. CRAWFORD: . . . And then, Your Honor, our concern is that as noted, Rule [26.2] really applies to discovery issues.
THE COURT: It doesn't. No, it doesn't. I mean, Rule 26.2, familiarize yourself with the rules of the Court if you want to practice here. That's not right.
Okay? People use that -- we don't have that rule just so that, you know, things can be produced in discovery and then filed publicly on the docket. That's not the way it works.

For reference, Local Rule 26.2 is heavily used in patent cases, and permits parties to produce documents as confidential prior to the entry of a protective order:

If any documents are deemed confidential by the producing party and the parties have not stipulated to a confidentiality agreement, until such an agreement is in effect, disclosure shall be limited to members and employees of the firm of trial counsel who have entered an appearance and, where appropriate, have been admitted pro hac vice. Such persons are under an obligation to keep such documents confidential and to use them only for purposes of litigating the case.

LR 26.2.

Ultimately, opposing counsel asked for various relief, including revocation of the out-of-town counsel's pro hac admission, a referral to disciplinary counsel, and attorneys' fees. The Court asked for a legal submission supporting that relief, which opposing counsel filed the next day.

Looking at the docket, what happened after that is unclear. As far as I can tell, the out-of-town counsel withdrew his appearance (perhaps mooting much of the relief), and I'm not sure whether the Court has yet made a determination as to sanctions—although it's a busy docket, and I may not be seeing it.

Either way, the transcript is a good reminder of the importance of maintaining confidentiality of sealed materials and materials produced under LR 26.2.

If you enjoyed this post, consider subscribing to receive free e-mail updates about new posts.


Similar Posts