SUPERIOR COURT OF THE STATE OF DELAWARE PAUL R. WALLACE LEONARD L. WILLIAMS JUSTICE CENTER JUDGE 500 N. KING STREET, SUITE 10400 WILMINGTON, DELAWARE 19801 (302) 255-0660
Date Submitted: May 26, 2023 Date Decided: June 8, 2023
Martin S. Lessner, Esquire Arthur G. Connolly III, Esquire Elisabeth S. Bradley, Esquire Alan R. Silverstein, Esquire M. Paige Valeski, Esquire CONNOLLY GALLAGHER LLP Kevin P. Rickert, Esquire 1201 North Market Street, 20th Floor YOUNG CONAWAY STARGATT Wilmington, Delaware 19801 & TAYLOR, LLP 100 North King Street John Zavitsanos, Esquire Wilmington, Delaware 19801 Taylor Freeman, Esquire Harrison Scheer, Esquire Melvin A. Brosterman, Esquire Thomas Frashier, Esquire Patrick N. Petrocelli, Esquire AHMAD, ZAVITSANOS & MENSING P.C. Daria D. Anichkova, Esquire 1221 McKinney Street, Suite 2500 STROOCK & STROOCK & LAVAN LLP Houston, Texas 77010 180 Maiden Lane New York, New York 10038
RE: Hartree Natural Gas Storage, LLC v. PAA Natural Gas Storage, L.P., et al. C.A. No. N22C-07-073 PRW CCLD Hartree’s Request for Fees
Dear Counsel: This Letter Order resolves Plaintiff Hartree’s request for fees as a result of its
partial success on a recent motion to compel.
In March 2023, Hartree filed a motion to compel. The Court heard oral Hartree Natural Gas Storage, LLC v. PAA Natural Gas Storage, L.P., et al. N22C-07-073 PRW CCLD June 8, 2023 Page 2 of 6
argument and granted Hartree’s motion, in part.1 At argument, Hartree split its
presentation between first arguing the substance of the motion and second arguing
why an award of fees was appropriate.
The Court allowed supplemental briefing on the application for fees and that
request is now ripe for decision.2
ASSESSMENT OF FEES IS NOT WARRANTED HERE.
Rule 37 instructs:
[A] judge granting a motion to compel to ‘require the party or deponent whose conduct necessitated the motion or the party or attorney advising such conduct or both of them to pay the moving party the reasonable expenses incurred in obtaining the order, including attorney’s fees, unless the Court finds that the opposition to the motion was substantially justified or that other circumstances make an award of expenses unjust.’3
The latter part of the Rule grants the Court broad discretion over the fee-award
question.4 The Court, though
must exercise care when imposing any sanction, and such sanction must always be ‘tailored to [a] specific discovery violation and its prompt cure; that includes consideration of the intent of the party opposing 1 D.I. 99. 2 D.I. 98. 3 Serviz, Inc. v. ServiceMaster Co., LLC, 2021 WL 5768655, at *6 n.59 (Del. Super. Ct. Dec. 6, 2021) (emphasis omitted) (quoting Del. Super. Ct. Civ. R. 37(a)(4)(A)). 4 Dynacorp, et al. v. 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.” (citations omitted)). Hartree Natural Gas Storage, LLC v. PAA Natural Gas Storage, L.P., et al. N22C-07-073 PRW CCLD June 8, 2023 Page 3 of 6
discovery, and of whether and to what extent the party seeking discovery has been prejudiced . . . but should always be viewed in light of [the] proper functions that sanctions are intended to serve.’5
“‘Discovery is intended to be a cooperative and self-regulating process,’ and
‘cooperation and communication among the parties are essential during
discovery.’”6
As a general matter—its seemingly compulsory language
notwithstanding—a successful motion to compel does not itself mean that awarding
fees is mandatory.7 Instead, the Court looks to the facts of the specific discovery
contest and its resolution.
Take for example M&G Polymers USA, LLC v. Carestream Health, Inc.8
There this Court granted Rule 37 fees after needing to order the production of
documents near the close of trial because the defendant “had not identified during
5 Keith v. Lamontagne, 2021 WL 4344158, at *2 (Del. Super. Ct. Sept. 20, 2021) (certain alterations in original) (quoting In re Rinehardt, 575 A.2d 1079, 1082 (Del. 1990)). 6 Serviz, Inc., 2021 WL 5768655, at *6 n.59 (quoting Cartanza v. Cartanza, 2013 WL 1615767, at *2 (Del. Ch. Apr. 16, 2013)). 7 See, e.g., Showell v. Mountaire Farms, Inc., 2002 WL 31818512, at *2 (Del. Super. Ct. Nov. 18, 2002) (granting the motion to compel but declining to award fees because “the opposition to the motion was substantially justified as the assertion of attorney-client privilege was a valid legal argument under the facts of this case”); MacBride v. Rainbow River Tours, Inc., 1978 WL 187982, at *2 (Del. Super. Ct. Dec. 1, 1978) (granting the motion to compel but declining to award fees because “there [was] some merit to the defendant’s position” and because “the plaintiff [was] getting the benefit of information obtained by the defendant at much less effort and cost”). 8 2010 WL 1611042 (Del. Super. Ct. Apr. 21, 2010). Hartree Natural Gas Storage, LLC v. PAA Natural Gas Storage, L.P., et al. N22C-07-073 PRW CCLD June 8, 2023 Page 4 of 6
discovery certain redactions made on privilege grounds, and that at least one . . .
employee had failed to turn over clearly relevant documents to [defendant]’s trial
counsel during discovery.”9
While in Suburban Medical Services v. Brinton Manor Center,10 this Court
found that even though the defendants “delayed and stonewalled certain of
Plaintiffs’ discovery attempts with blanket objections and a seeming lack of interest
in engaging with what otherwise is a cooperative process,” fees were not
warranted.11 After granting in part, and denying in part, the motion to compel, the
Court concluded that while “it’s a close call,” it would not award fees.12
This discovery kerfuffle tends closer to Suburban Medical than to M&G
Polymers. Hartree brought this motion to compel seeking: (1) production of
documents; (2) production of a usable hit report; and (3) discovery from Plains
executives Jeremy Goebel, Chris Chandler, and Harry Pefanis.13 And Defendants
objected because, in their view: (1) the requests were too burdensome, and (2) the
9 Id. at *1, 76. 10 2022 WL 17688194, at *5-6 (Del. Super. Ct. Dec. 15, 2022). 11 Id. at *6. 12 Id. 13 Mot. to Compel at 2 (D.I. 62); id. at 3-4 (defendants “have not produced one document”); id. at 4-9 (defendants have failed to search for terms Hartree has requested); id. at 9-10 (defendants “have refused to collect documents” from certain Plains executives). Hartree Natural Gas Storage, LLC v. PAA Natural Gas Storage, L.P., et al. N22C-07-073 PRW CCLD June 8, 2023 Page 5 of 6
three custodians identified had little relevant evidence to offer.14
The parties resolved the first two issues leaving the Court to decide only the
custodians issue. The Court granted the remainder of the motion to compel thereon,
observing that the relevance standard is broad at the discovery stage15 and that the
Defendants’ had not shouldered their burden of demonstrating that the sought-after
custodians indeed did not have relevant information subject to disclosure under
Rule 26.16
Defendants’ initial objections, while not wholly baseless, were not well-found
under controlling Delaware discovery standards. And that one remaining objection
to Hartree’s discovery requests did result in increased expenditure of resources by
all involved. That is not to be lauded. But the Court, applying the broad discretion
it is given under Rule 37, finds that the circumstances here do not merit fee-shifting.
14 Response to Mot. to Compel at 6-9 (D.I.
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SUPERIOR COURT OF THE STATE OF DELAWARE PAUL R. WALLACE LEONARD L. WILLIAMS JUSTICE CENTER JUDGE 500 N. KING STREET, SUITE 10400 WILMINGTON, DELAWARE 19801 (302) 255-0660
Date Submitted: May 26, 2023 Date Decided: June 8, 2023
Martin S. Lessner, Esquire Arthur G. Connolly III, Esquire Elisabeth S. Bradley, Esquire Alan R. Silverstein, Esquire M. Paige Valeski, Esquire CONNOLLY GALLAGHER LLP Kevin P. Rickert, Esquire 1201 North Market Street, 20th Floor YOUNG CONAWAY STARGATT Wilmington, Delaware 19801 & TAYLOR, LLP 100 North King Street John Zavitsanos, Esquire Wilmington, Delaware 19801 Taylor Freeman, Esquire Harrison Scheer, Esquire Melvin A. Brosterman, Esquire Thomas Frashier, Esquire Patrick N. Petrocelli, Esquire AHMAD, ZAVITSANOS & MENSING P.C. Daria D. Anichkova, Esquire 1221 McKinney Street, Suite 2500 STROOCK & STROOCK & LAVAN LLP Houston, Texas 77010 180 Maiden Lane New York, New York 10038
RE: Hartree Natural Gas Storage, LLC v. PAA Natural Gas Storage, L.P., et al. C.A. No. N22C-07-073 PRW CCLD Hartree’s Request for Fees
Dear Counsel: This Letter Order resolves Plaintiff Hartree’s request for fees as a result of its
partial success on a recent motion to compel.
In March 2023, Hartree filed a motion to compel. The Court heard oral Hartree Natural Gas Storage, LLC v. PAA Natural Gas Storage, L.P., et al. N22C-07-073 PRW CCLD June 8, 2023 Page 2 of 6
argument and granted Hartree’s motion, in part.1 At argument, Hartree split its
presentation between first arguing the substance of the motion and second arguing
why an award of fees was appropriate.
The Court allowed supplemental briefing on the application for fees and that
request is now ripe for decision.2
ASSESSMENT OF FEES IS NOT WARRANTED HERE.
Rule 37 instructs:
[A] judge granting a motion to compel to ‘require the party or deponent whose conduct necessitated the motion or the party or attorney advising such conduct or both of them to pay the moving party the reasonable expenses incurred in obtaining the order, including attorney’s fees, unless the Court finds that the opposition to the motion was substantially justified or that other circumstances make an award of expenses unjust.’3
The latter part of the Rule grants the Court broad discretion over the fee-award
question.4 The Court, though
must exercise care when imposing any sanction, and such sanction must always be ‘tailored to [a] specific discovery violation and its prompt cure; that includes consideration of the intent of the party opposing 1 D.I. 99. 2 D.I. 98. 3 Serviz, Inc. v. ServiceMaster Co., LLC, 2021 WL 5768655, at *6 n.59 (Del. Super. Ct. Dec. 6, 2021) (emphasis omitted) (quoting Del. Super. Ct. Civ. R. 37(a)(4)(A)). 4 Dynacorp, et al. v. 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.” (citations omitted)). Hartree Natural Gas Storage, LLC v. PAA Natural Gas Storage, L.P., et al. N22C-07-073 PRW CCLD June 8, 2023 Page 3 of 6
discovery, and of whether and to what extent the party seeking discovery has been prejudiced . . . but should always be viewed in light of [the] proper functions that sanctions are intended to serve.’5
“‘Discovery is intended to be a cooperative and self-regulating process,’ and
‘cooperation and communication among the parties are essential during
discovery.’”6
As a general matter—its seemingly compulsory language
notwithstanding—a successful motion to compel does not itself mean that awarding
fees is mandatory.7 Instead, the Court looks to the facts of the specific discovery
contest and its resolution.
Take for example M&G Polymers USA, LLC v. Carestream Health, Inc.8
There this Court granted Rule 37 fees after needing to order the production of
documents near the close of trial because the defendant “had not identified during
5 Keith v. Lamontagne, 2021 WL 4344158, at *2 (Del. Super. Ct. Sept. 20, 2021) (certain alterations in original) (quoting In re Rinehardt, 575 A.2d 1079, 1082 (Del. 1990)). 6 Serviz, Inc., 2021 WL 5768655, at *6 n.59 (quoting Cartanza v. Cartanza, 2013 WL 1615767, at *2 (Del. Ch. Apr. 16, 2013)). 7 See, e.g., Showell v. Mountaire Farms, Inc., 2002 WL 31818512, at *2 (Del. Super. Ct. Nov. 18, 2002) (granting the motion to compel but declining to award fees because “the opposition to the motion was substantially justified as the assertion of attorney-client privilege was a valid legal argument under the facts of this case”); MacBride v. Rainbow River Tours, Inc., 1978 WL 187982, at *2 (Del. Super. Ct. Dec. 1, 1978) (granting the motion to compel but declining to award fees because “there [was] some merit to the defendant’s position” and because “the plaintiff [was] getting the benefit of information obtained by the defendant at much less effort and cost”). 8 2010 WL 1611042 (Del. Super. Ct. Apr. 21, 2010). Hartree Natural Gas Storage, LLC v. PAA Natural Gas Storage, L.P., et al. N22C-07-073 PRW CCLD June 8, 2023 Page 4 of 6
discovery certain redactions made on privilege grounds, and that at least one . . .
employee had failed to turn over clearly relevant documents to [defendant]’s trial
counsel during discovery.”9
While in Suburban Medical Services v. Brinton Manor Center,10 this Court
found that even though the defendants “delayed and stonewalled certain of
Plaintiffs’ discovery attempts with blanket objections and a seeming lack of interest
in engaging with what otherwise is a cooperative process,” fees were not
warranted.11 After granting in part, and denying in part, the motion to compel, the
Court concluded that while “it’s a close call,” it would not award fees.12
This discovery kerfuffle tends closer to Suburban Medical than to M&G
Polymers. Hartree brought this motion to compel seeking: (1) production of
documents; (2) production of a usable hit report; and (3) discovery from Plains
executives Jeremy Goebel, Chris Chandler, and Harry Pefanis.13 And Defendants
objected because, in their view: (1) the requests were too burdensome, and (2) the
9 Id. at *1, 76. 10 2022 WL 17688194, at *5-6 (Del. Super. Ct. Dec. 15, 2022). 11 Id. at *6. 12 Id. 13 Mot. to Compel at 2 (D.I. 62); id. at 3-4 (defendants “have not produced one document”); id. at 4-9 (defendants have failed to search for terms Hartree has requested); id. at 9-10 (defendants “have refused to collect documents” from certain Plains executives). Hartree Natural Gas Storage, LLC v. PAA Natural Gas Storage, L.P., et al. N22C-07-073 PRW CCLD June 8, 2023 Page 5 of 6
three custodians identified had little relevant evidence to offer.14
The parties resolved the first two issues leaving the Court to decide only the
custodians issue. The Court granted the remainder of the motion to compel thereon,
observing that the relevance standard is broad at the discovery stage15 and that the
Defendants’ had not shouldered their burden of demonstrating that the sought-after
custodians indeed did not have relevant information subject to disclosure under
Rule 26.16
Defendants’ initial objections, while not wholly baseless, were not well-found
under controlling Delaware discovery standards. And that one remaining objection
to Hartree’s discovery requests did result in increased expenditure of resources by
all involved. That is not to be lauded. But the Court, applying the broad discretion
it is given under Rule 37, finds that the circumstances here do not merit fee-shifting.
14 Response to Mot. to Compel at 6-9 (D.I. 76). 15 See, e.g. Levy v. Stern, 1996 WL 742818, at *2 (Del. Dec. 20, 1996) (“pretrial discovery rules are to be afforded broad and liberal treatment” (citation omitted)); Woodstock v. Wolf Creek Surgeons, P.A., 2017 WL 3727019, at *6 (Del. Super. Ct. Aug. 30, 2017) (“The scope of discovery under [Rule 26] is broad and far-reaching.” (citations omitted)); Hunter v. Bogia, 2015 WL 5050648, at *4 (Del. Super. Ct. July 29, 2015) (“In Delaware . . . a broad and liberal discovery process has been designed and adopted to avoid surprises during civil litigation.” (citations omitted)). 16 “When a party objects to providing discovery, the burden . . . is on the objecting party to show why and in what way the information requested is privileged or otherwise improperly requested.” Wood v. U.S. Bank Nat’l Ass’n, 246 A.3d 141, 149 (Del. Ch. 2021) (cleaned up); Henlopen Hotel v. United Nat’l Ins. Co., 2019 WL 3384843, at *1 (Del. Super. Ct. July 26, 2019). Hartree Natural Gas Storage, LLC v. PAA Natural Gas Storage, L.P., et al. N22C-07-073 PRW CCLD June 8, 2023 Page 6 of 6
At bottom, in the Court’s eyes, such an award of expenses here would be unjust.17
In the end, the discovery foul was relatively minor and not at all proportional to any
fee-shift, much less the almost $30,000 sought by Hartree.
CONCLUSION
For the foregoing reasons, Hartree’s Rule 37 request for fees is DENIED.
IT IS SO ORDERED.
_______________________ Paul R. Wallace, Judge cc: All Counsel via File and Serve
17 See Wollner v. PearPop Inc., 2022 WL 2205359, at *7 (Del. Ch. June 21, 2022) (observing that when employing Court of Chancery Rule 37’s justness standard “the court [is asked] to look at the broader context when granting relief”).