Smartmatic USA Corp. v. Newsmax Media, Inc.

• Court: Superior Court of Delaware
• Decided: June 25, 2024
• Docket: N21C-11-028 EMD
• Status: Published

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

SMARTMATIC USA CORP., ) SMARTMATIC INTERNATIONAL ) HOLDING B.V., and SGO ) CORPORATION LIMITED, ) C.A. No.: N21C-11-028 EMD ) Plaintiffs, ) v. ) ) NEWSMAX MEDIA, INC., , ) ) Defendant. )

ORDER DENYING DEFENDANT’S CORRECTED MOTION TO COMPEL DISCOVERY OF SMARTMATIC’S SETTLEMENT WITH OANN

UPON CONSIDERATION of Defendant’s Corrected Motion to Compel Discovery of

Smartmatic’s Settlement with OANN (the “Motion”) filed by Defendant Newsmax Media Inc.

(“Newsmax”) on May 30, 2024; Plaintiffs’ Opposition to Defendant’s Motion to Compel

Discovery of Smartmatic’s Settlement with OANN (the “Opposition”) filed by Plaintiffs

Smartmatic USA Corp., Smartmatic International Holding B.V., and SGO Corporation Limited

(collectively, “Smartmatic”) on June 4, 2024; the arguments made in the Motion and the

Opposition; the case law cited in the Motion and the Opposition; the Court having determined

that no hearing is necessary on the Motion or the Opposition; the Court finds as follows:

1. The Motion seeks to compel production of all agreement(s) and other documents

“sufficient to show all terms” of the settlement (the “OANN Settlement”) between Smartmatic

and One America News Network (“OANN”) that resolved Smartmatic’s defamation claims

against OANN. Newsmax contends it has a “fundamental” right to discover the terms of the

OANN Settlement. In addition, Newsmax maintains that the OANN Settlement is “critical” to Newsmax’s ability to fully defend against Smartmatic’s claims in this case. Finally, Newsmax

claims that the OANN Settlement is “highly” relevant to offset issues.

2. In the Opposition, Smartmatic makes two basic arguments against production.

Smartmatic argues that any disclosure of the confidential OANN Settlement Agreement and

related documents would go against the public interest in encouraging settlement. Smartmatic

also argues that the Motion is premature.

3. Rule 28 of the Superior Court Rules of Civil Procedure provides that parties may

obtain discovery regarding any matter, not privileged which is relevant to the subject matter

involved in the pending action.1 A party may seek a motion to compel discovery, when, after

making a request for inspection under Rule 34 of the Superior Court Rules of Civil Procedure,

the opposing party fails to permit inspection as requested.2 The Court has discretion to order the

disclosure of information in the interests of justice based on the facts and circumstances of the

case.3

4. In CNH Industrial America LLC v. The Travelers Indemnity Co.,4 the Court

addressed and rejected arguments similar to those made in the Motion. In reaching that

decisions, the Court relied on S&R Associates, L.P. v. Shell Oil Co.5 In S&R Associates, this

Court held that confidential settlement agreements should be protected when possible.6 In S&R

Associates, the plaintiff sued a number of distributors and manufacturers after its plumbing

system failed.7 The plaintiff reached confidential settlement agreements with all defendants

1 Del. Super. Ct. Civ. R. 28(a)(1). 2 Del. Super. Ct. Civ. R. 37(a)(2). 3 Showell v. Mountaire Farms, Inc., 2002 WL 31818512, at *1 (Del. Super. Nov. 18, 2002) (citing Williams v. Hall, 176 A.2d 608, 617 (Del. Super. 1961)). 4 2015 WL 5157039, at *2 (Del. Super. Feb. 19, 2015). 5 1999 WL 744422 (Del. Super. July 28, 1999). 6 Id. at *1. 7 Id.

2 except Shell Oil.8 Shell Oil moved to compel production of settlement agreements, asserting that

they were relevant to the issues of compensation and contribution among tortfeasors.9 The Court

held that required disclosure of the settlement agreements was premature, and denied Shell Oil’s

motion without prejudice.10

5. The Court sees no reason to deviate from the well-settled law articulated CNH

and S&R Associates. Here, there are two major issues to be decided. First, whether Newsmax is

liable to Smartmatic. Only if Newsmax is liable, will it then become necessary to determine the

extent of the liability. These were the same issues addressed in CNH and S&R Associates.

While the OANN Settlement Agreement between Smartmatic and OANN may eventually

become relevant in computing the dollar amount of Newsmax’s liability, it is not relevant to

determining whether Newsmax is in fact liable to Smartmatic.

6. As noted above, the Court should, to the extent possible, protect the

confidentiality of settlement agreements. Newsmax’s arguments do not convince the Court that

the discovery of the terms of OANN Settlement Agreement at this time is necessary.

Accordingly, compelling discovery of the confidential OANN Settlement Agreement now would

be “premature.”

IT IS SO ORDERED.

Dated: June 25, 2024 Wilmington, Delaware /s/ Eric M. Davis Eric M. Davis, Judge

cc: File&ServeXpress

8 Id. 9 Id. 10 Id.