At a time when remote depositions are commonplace, litigators weigh any number of factors when deciding whether a deposition should be conducted in-person or remotely.
Does the case turn on the credibility of the witness, and does the litigator believe that credibility can be more accurately evaluated during an in-person deposition?
Does the trial court have a preference for remote depositions wherever possible?
Do cost and travel considerations call for this deposition to be taken remotely?
Does the litigator believe that exhibits or other case-related documents will be more effectively offered and used during an in-person as opposed to a remote deposition?
These are all proper considerations when deciding whether to notice a deposition to be either remote or in-person. What is improper, however, is insisting on an in-person deposition solely for the purpose of inconveniencing an opposing party.
That’s precisely what a Delaware court said happened in stockholder rights lawsuit decided last week. The case is Seidman v. Blue Foundry Bancorp., No. 2022-1155 (Del. Chancery Ct., July 10, 2023).
Delaware courts follow the so-called “American Rule.” Each party pays its own attorneys’ fees regardless of outcome – unless a statute explicitly shifts fees to the prevailing party.
However, trial courts in Delaware (and elsewhere) have the authority to shift fees for the purpose of deterring abusive litigation. In Delaware, courts follow the “glaring egregiousness” standard. Litigators that fail this test may saddle their clients with the obligation to pay for at least some of the opposing party’s attorneys’ fees.
In Pettry v. Gilead Sciences, Inc., No. 2020-0132 (Del. Chancery Ct., July 22, 2021), the court awarded attorneys’ fees after finding that the defendant “exemplified the trend of overly aggressive litigation strategies by blocking legitimate discovery, misrepresenting the record, and taking positions for no apparent purpose other than obstructing the exercise of Plaintiff’s statutory rights ….”
The Seidman v. Blue Foundry Bancorp. case is yet another example of needlessly aggressive litigation tactics.
Seidman’s attorney sent an email to Blue Foundry’s counsel informing him that “Mr. Seidman will be in Florida for the rest of the month [January]” and offering to make him available for a remote deposition on two dates in January. Blue Foundry insisted that Seidman’s deposition be held in person in Delaware; in fact, the next day, Blue Foundry noticed Seidman’s deposition for Delaware in January.
Seidman filed a motion for a protective order, which the trial court granted. The court remarked that there was “no real reason” why the deposition needed to occur in Delaware.
Taking up Seidman’s subsequent motion for attorneys’ fees, the court ruled that Blue Foundry’s overly aggressive approach to discovery – along with a host of other unnecessarily oppressive trial tactics – met the Gilead Science court’s “glaringly egregious” standard.
“Despite knowing that Plaintiff was in Florida, Blue Foundry refused to proceed by video deposition and insisted that Plaintiff appear in person for a half-day deposition in Delaware, forcing Plaintiff to obtain a protective order,” the court remarked.
Blue Foundry’s insistence on an in-person deposition was bad faith conduct that needlessly “increased the litigation’s cost,” the court said.
The court expressed dissatisfaction with what it considered to be misleading representations from Blue Foundry’s counsel while contesting the attorneys’ fee matter. Blue Foundry’s assertion that it did not know Seidman was in Florida when it noticed his deposition for Delaware was “demonstrably false” in light of counsel’s prior email informing them of this very fact, the court found.
The lesson here is a simple one: Not every reason for insisting on an in-person deposition is an acceptable one, and some of them can be very expensive.